Bangladesh's trade policy still very restrictive: WB
FE Report | Tuesday, 15 July 2008
Bangladesh's trade restrictiveness is one of the highest in the South Asian region, a World Bank report said Monday.
"While high-income countries still have the world's lowest tariff barriers, many developing countries are converging rapidly. Bangladesh still maintains a very restrictive trade policy," the bank's report titled "World Trade Indicators (WTI) 2008" said.
"Bangladesh has the potential to become a middle income country by its own dynamic performance. For that to happen Bangladesh must deal more seriously with its restrictive policy, poor infrastructure and red tapism" said World bank Country Director in Bangladesh Xian Zhu while launching the report.
He said: "Bangladesh can thrive in the global economy by lowering trade barriers and improving logistic services."
Trade programme leader of the World Bank Institute Mr. Gianni Zanini presented the key findings of the WTI 2008 report at the local office of the Bank in Dhaka.
According to the WTI report, Bangladesh has ranked 113th and 107th in terms of trade policy and institutional environment respectively out of 125 countries in the world.
However, the country ranked slightly better for external environment where its position is 59th out of 125 countries.
The WTI 2008 report said: "Despite South Asian region has had the largest reduction in tariffs since late 1990s, it has still the most restrictive tariff policies followed by the Sub-Saharan Africa."
"South Asian countries that have opened up with the rest of the world remain closed to each other. Intraregional trade in South Asia is less than 2.0 per cent of the GDP, compared to more than 20 per cent for East Asia," the report quoted.
The WTI report expressed concern over the trade restriction on food grains and said: "With the global food price increase, a strong restriction on food trade has been hurting the low income countries including Bangladesh most."
"Although overall trade restrictiveness has declined since 1990s, agricultural sector is still subject to high trade restrictiveness in both the developed and developing countries," the report said.
Some economists who took part in the discussion on the WTI report at the World Bank office in the city were critical about the external trade policies of the developed countries.
"Most of the developed countries have lower tariff rates on average calculation, but they apply higher tariffs on products exported by the least developed and poor countries like Bangladesh," said Mustafizur Rahman, executive director of Centre for Policy Dialogue, a local think tank.
"For example, the US shows its average tariff rate at 4.0 per cent and the European Union (EU) 5.0 per cent. But the USA and the EU are imposing 15 per cent and 12.5 per cent duty respectively on the ready-made garments imported from Bangladesh," Mr. Rahman said.
Highlighting some weakness of the WTI report, Mr. Rahman said not only the trade policies but also other issues, including trade facilitation should be considered while preparing the report.
He urged the developed countries to extend their "aid for trade" support to the least developed countries (LDCs) so that those could overcome their losses caused by the trade liberalisation.
In its Bangladesh chapter the WTI report said: "Bangladesh's Doing Business rank is 107th (out of 178), registering property and enforcing contracts being the most problematic areas. The country's governance indicators are generally poor, and performance was poorest in the control of corruption category."
"Surpassing its comparators on most aspects of the 2006 Logistics Performance Index, it is ranked 87th out of 150 countries. Here, its weakest categories are efficiency of customs and other border procedures, while its strongest logistics indicator is timeliness of shipment," it said.
The WTI has ranked Bangladesh's market access TTRI (including preferences) at 59 out of total 125 countries as it faces a relatively more liberal market access than the average South Asian or low-income country.
"A Generalised System of Preferences (GSP) beneficiary with a number of industrialised countries, Bangladesh's export enjoys additional trade preferences under the European Union's "Everything But Arms" initiative for LDCs."
Its utilisation rate of EU and US preferences was about 69 percent and the value of such preferences is high at 5.4 percent of bilateral exports, the report said.
"While high-income countries still have the world's lowest tariff barriers, many developing countries are converging rapidly. Bangladesh still maintains a very restrictive trade policy," the bank's report titled "World Trade Indicators (WTI) 2008" said.
"Bangladesh has the potential to become a middle income country by its own dynamic performance. For that to happen Bangladesh must deal more seriously with its restrictive policy, poor infrastructure and red tapism" said World bank Country Director in Bangladesh Xian Zhu while launching the report.
He said: "Bangladesh can thrive in the global economy by lowering trade barriers and improving logistic services."
Trade programme leader of the World Bank Institute Mr. Gianni Zanini presented the key findings of the WTI 2008 report at the local office of the Bank in Dhaka.
According to the WTI report, Bangladesh has ranked 113th and 107th in terms of trade policy and institutional environment respectively out of 125 countries in the world.
However, the country ranked slightly better for external environment where its position is 59th out of 125 countries.
The WTI 2008 report said: "Despite South Asian region has had the largest reduction in tariffs since late 1990s, it has still the most restrictive tariff policies followed by the Sub-Saharan Africa."
"South Asian countries that have opened up with the rest of the world remain closed to each other. Intraregional trade in South Asia is less than 2.0 per cent of the GDP, compared to more than 20 per cent for East Asia," the report quoted.
The WTI report expressed concern over the trade restriction on food grains and said: "With the global food price increase, a strong restriction on food trade has been hurting the low income countries including Bangladesh most."
"Although overall trade restrictiveness has declined since 1990s, agricultural sector is still subject to high trade restrictiveness in both the developed and developing countries," the report said.
Some economists who took part in the discussion on the WTI report at the World Bank office in the city were critical about the external trade policies of the developed countries.
"Most of the developed countries have lower tariff rates on average calculation, but they apply higher tariffs on products exported by the least developed and poor countries like Bangladesh," said Mustafizur Rahman, executive director of Centre for Policy Dialogue, a local think tank.
"For example, the US shows its average tariff rate at 4.0 per cent and the European Union (EU) 5.0 per cent. But the USA and the EU are imposing 15 per cent and 12.5 per cent duty respectively on the ready-made garments imported from Bangladesh," Mr. Rahman said.
Highlighting some weakness of the WTI report, Mr. Rahman said not only the trade policies but also other issues, including trade facilitation should be considered while preparing the report.
He urged the developed countries to extend their "aid for trade" support to the least developed countries (LDCs) so that those could overcome their losses caused by the trade liberalisation.
In its Bangladesh chapter the WTI report said: "Bangladesh's Doing Business rank is 107th (out of 178), registering property and enforcing contracts being the most problematic areas. The country's governance indicators are generally poor, and performance was poorest in the control of corruption category."
"Surpassing its comparators on most aspects of the 2006 Logistics Performance Index, it is ranked 87th out of 150 countries. Here, its weakest categories are efficiency of customs and other border procedures, while its strongest logistics indicator is timeliness of shipment," it said.
The WTI has ranked Bangladesh's market access TTRI (including preferences) at 59 out of total 125 countries as it faces a relatively more liberal market access than the average South Asian or low-income country.
"A Generalised System of Preferences (GSP) beneficiary with a number of industrialised countries, Bangladesh's export enjoys additional trade preferences under the European Union's "Everything But Arms" initiative for LDCs."
Its utilisation rate of EU and US preferences was about 69 percent and the value of such preferences is high at 5.4 percent of bilateral exports, the report said.