Top Bangladeshi exporters have urged the government to continue support for the grant-based Export Readiness Fund (ERF).
They argue that the fund -- designed to enhance factory compliance and boost the competitiveness of specific local exporting industries -- requires additional investment to help businesses progress from mere manufacturing expertise to design ownership and full market ownership.
In this regard, President of the Leather-goods and Footwear Manufacturers and Exporters Association of Bangladesh Syed Nasim Manzur pointed to the success of the Export Development Fund as a model for the ERF.
"We have a great example of the Export Development Fund," he said at an event in Dhaka on Monday. "The Export Readiness Fund could be an extension of that since it deserves government support."
Mr Manzur said that the transition from original equipment manufacturer (OEM) to original design manufacturer (ODM) and eventually to independent brands requires huge investment.
While speaking as the special guest to the event on the readiness fund in Dhaka, he highlighted the urgency of supporting small and medium enterprises in the face of the current global economic slowdown, which he described as more severe than the Covid-19 pandemic.
Mr Manzur advocated for "speed to market" and "efficiency" for Bangladesh to remain competitive in the global market, particularly amid high inflation and a complex geopolitical situation.
The ERF, a $17.5 million World Bank initiative launched in January 2020 under the Export Competitiveness for Jobs (EC4J) project, aims to improve factory compliance and strengthen the competitiveness of specific export sectors in Bangladesh.
The targeted sectors for ERF support are leather and leather goods, footwear, plastics and light engineering products. Some 570 enterprises have received financial and technical assistance through the initiative.
Mr Manzur in his speech recommended increased government focus on innovation, productivity, product development, intellectual property acquisition, interagency coordination and long-term financing to ensure successful export diversification.
Speaking at the event as the chief guest, Tapan Kanti Ghosh, senior secretary of the commerce ministry, highlighted the success of the ERF.
Mr Ghosh underscored the need to address the critical challenge of diversifying exports beyond the readymade garment sector.
He commented that Bangladesh's duty-free market access to all developed nations, except the United States, makes diversification essential for sustained economic growth.
The senior secretary stressed that compliance with global environmental, social, and governance standards is essential for export diversification.
He also highlighted the need for increased foreign direct investment (FDI) to accelerate export diversification, urging development partners and the World Bank to support Bangladesh in attracting the desired FDI.
Souleymane Coulibaly, the lead country economist of the World Bank, acknowledged the role of the ERD in developing factory compliance and enhancing competitiveness in the targeted export sectors.
He reiterated the World Bank's commitment to enhancing the competitiveness of Bangladesh's small and medium enterprises for further economic growth.
Other discussants, including Project Director of EC4J Md Monsurul Alam, ERF Management Unit Team Leader Dave Runganaikaloo, and World Bank Group Private Sector Specialist Hosna Ferdous Sumi, along with CEO of Young Consultants Zakir Hossain, emphasised the collaborative efforts driving Bangladesh's export competitiveness and economic growth.
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