Further trade openness, industrial restructuring vital for regional growth
Sunday, 25 November 2012
FE Report
Speakers at a policy dialogue Saturday said non-cooperation by a big country and political mistrust among nations can dim the growth prospects through regional cooperation.
Apart from external factors, acute infrastructure shortage, unavailability of utilities and lower productivity of labour are the major domestic barriers to the country's sustainable development, they said.
Cooperation through border trade substituting value chain of the manufacturing process for each other can benefit all the countries in a region if these are driven by effective execution of trade and services, Food Minister Muhammad Abdur Razzaque, MP said.
"Operation of Saarc Food Bank and import of 0.5 million tonnes rice from India could not be made even though the standard operation procedure (SOP) for the food bank was finalized and Bangladesh agreed to all conditions set by India to in this respect, Abdur Razzaque, said.
He was speaking at a policy dialogue on "Value Chain for Inclusive Development: Lessons and Policies for South Asia", organized by the Centre for Policy Dialogue (CPD) held at the Brac Centre in the city.
Professor Rehman Sobhan, Chairman CPD chaired the opening session and Prof Wahiduddin Mahmud, former finance adviser to the caretaker government attended as special guest.
Dr. Debapriya Bhattacharya, Distinguished Fellow, CPD, Dr. Saman Kelegama, Executive Director, Institute for Policy Research of Sri Lanka (IPS), Dr. Dilliraj Khanal, Chairman, Institute for Policy Research and Development, Nepal spoke as distinguished panelists while Dr. Nagesh Kumar, Director UN-ESCAP Fellow SSWA Office, New Delhi presented the ESCAP report.
The food minister said large concentrations of poverty and hunger, rising inequality, poor levels of human development, wide infrastructure gaps, lack of a diversified base for high value added products and exports, widespread food and energy insecurity and high risk of disaster are the major impediments to the growth prospects in the region which have been rightly identified in the report.
"The South and South-West Asian economies must utilize huge human resource who are relatively young population and could grow into the world's largest middle class with an annual consumption of $30 trillion in purchasing power parity in a decade," Abdur Razzaque added.
Prof Wahiduddin Mahmud said Bangladesh has shown tremendous success in terms of innovating low cost disaster management and reduction of child mortality which are in line with the UN-ESCAP's new terminology of 'Frugal Innovation'.
About competitiveness, he said the country has achieved phenomenal growth in readymade garments, provided millions of job. But problem is that the growth would not be sustainable if the industry only depends on low-wage based competitiveness, not on productivity.
Prof Mahmud said the country does not see high level cotton and spinning processing as part of value chain though it shows brilliant performance in readymade garments. "Besides, we do not know much how prices are fixed and how buyers and sellers behave", he said adding that the question how many RMG workers have come out of poverty line has remained unanswered.
He suggested regional free trade agreement (FTA), both bilateral and multilateral, within the region and industrial restructuring in harnessing inclusive growth. Citing example of failure in regional trade, Mahmud said Safta could not be successful due to inclusion of special treatment for too many items.
Dr. Debapriya Bhattacharya said the country should re-discover the domestic demand as only export should not be the focus on growth prospects.
He emphasized the need for identifying the policy loopholes in regional cooperation as India recently imposed ban on cotton export and Turkey imposed additional duty on Bangladesh RMG export.
In his address, United Nations Director Dr. Nagesh kumar said, "cooperation can help spur more inclusive growth and drive the elimination of poverty in the sub-region. Greater regional integration not only increases intraregional trade, but also promotes investment in the sub-region's supply chain and production networks."
"This creates more and better jobs and builds productive capacity, particularly in the sub-region's least developed countries. Greater intraregional integration can also improve food and energy security, as well as help reduce disaster risk," he said adding "Collective regional responses and solutions are more effective in addressing these challenges than individual country approaches."
Muhammad Abdur Razzaque and Prof. Wahiduddin Mahmud also unveiled an ESCAP report prepared by its South and South-West Asia office setting out a policy agenda for harnessing cooperation among its ten member countries to promote inclusive, sustainable and resilient growth within the sub-region.
Nagesh Kumar pointed out the necessity of strengthening the value chain of manufacturing across the South and South-West Asian sub-region. He emphasized that political and policy interventions towards this goal would offer new opportunities and resources to overcome the development deficit.
"Regional cooperation in South and South-West Asia can be an important strategy to address many of the challenges facing the sub-region. In the decade ahead, the 10 member states of the sub-region have the chance to cooperate amongst themselves to ensure not only the sub-region's growth dynamism, but also that the sub-region re-emerges as the important crossroads between the East and the West that it once was," noted Dr. Nagesh Kumar.
Enhanced sub-regional cooperation can reduce the wide development and infrastructure gaps in South and South-West Asia, stimulating growth that is more inclusive, sustainable and resilient to economic shocks and natural disasters, the ESCAP report noted.
According to the ESCAP, South and South-West Asia Development Report 2012-13, the first in a series of biennial reports produced by the South and South-West Asia Office, the sub-region's slower growth, together with the uncertainty in the advanced economies is "exposing the sub-region's structural challenges".
These include the need for more inclusive development, closing wide infrastructure gaps, strengthening food and energy security, diversifying and moving up the value chain in industrial and export structures, and reducing the risks and costs of disasters, particularly in the sub-region's least developed countries (LDCs) and landlocked developing countries (LLDCs).
"Low productive capacity, particularly in the sub-region's LDCs, limits the sub-region's ability to move up the value chain and structurally transform its economies. Fundamental infrastructure gaps also threaten energy security, food security, and disaster risk in the sub-region," notes the report.
"Greater regional integration not only increases intraregional trade, but also promotes efficiency seeking investment in the sub-region's supply chain and production networks."
The report offers guidelines for South and South-West Asia to work together and with international development partners to boost food and energy security and trade, create employment opportunities for its large youth population, and enhance connectivity across the sub-region and beyond, to emerge as a global economic powerhouse and model of inclusive and sustainable development.
Prepared by the South and South-West Office in collaboration with a team of experts and think tanks, the report argues that regional cooperation can help solve many of the sub-region's challenges and help secure a more sustainable future, also providing an opportunity for the sub-region to re-emerge as the hub of East-West trade that it once was.
As a development partner of South and South-West Asia, now with a new office dedicated to the sub-region, ESCAP, in its report, highlights elements of a regional policy agenda for harnessing the potential of cooperation in select areas.
Speakers at a policy dialogue Saturday said non-cooperation by a big country and political mistrust among nations can dim the growth prospects through regional cooperation.
Apart from external factors, acute infrastructure shortage, unavailability of utilities and lower productivity of labour are the major domestic barriers to the country's sustainable development, they said.
Cooperation through border trade substituting value chain of the manufacturing process for each other can benefit all the countries in a region if these are driven by effective execution of trade and services, Food Minister Muhammad Abdur Razzaque, MP said.
"Operation of Saarc Food Bank and import of 0.5 million tonnes rice from India could not be made even though the standard operation procedure (SOP) for the food bank was finalized and Bangladesh agreed to all conditions set by India to in this respect, Abdur Razzaque, said.
He was speaking at a policy dialogue on "Value Chain for Inclusive Development: Lessons and Policies for South Asia", organized by the Centre for Policy Dialogue (CPD) held at the Brac Centre in the city.
Professor Rehman Sobhan, Chairman CPD chaired the opening session and Prof Wahiduddin Mahmud, former finance adviser to the caretaker government attended as special guest.
Dr. Debapriya Bhattacharya, Distinguished Fellow, CPD, Dr. Saman Kelegama, Executive Director, Institute for Policy Research of Sri Lanka (IPS), Dr. Dilliraj Khanal, Chairman, Institute for Policy Research and Development, Nepal spoke as distinguished panelists while Dr. Nagesh Kumar, Director UN-ESCAP Fellow SSWA Office, New Delhi presented the ESCAP report.
The food minister said large concentrations of poverty and hunger, rising inequality, poor levels of human development, wide infrastructure gaps, lack of a diversified base for high value added products and exports, widespread food and energy insecurity and high risk of disaster are the major impediments to the growth prospects in the region which have been rightly identified in the report.
"The South and South-West Asian economies must utilize huge human resource who are relatively young population and could grow into the world's largest middle class with an annual consumption of $30 trillion in purchasing power parity in a decade," Abdur Razzaque added.
Prof Wahiduddin Mahmud said Bangladesh has shown tremendous success in terms of innovating low cost disaster management and reduction of child mortality which are in line with the UN-ESCAP's new terminology of 'Frugal Innovation'.
About competitiveness, he said the country has achieved phenomenal growth in readymade garments, provided millions of job. But problem is that the growth would not be sustainable if the industry only depends on low-wage based competitiveness, not on productivity.
Prof Mahmud said the country does not see high level cotton and spinning processing as part of value chain though it shows brilliant performance in readymade garments. "Besides, we do not know much how prices are fixed and how buyers and sellers behave", he said adding that the question how many RMG workers have come out of poverty line has remained unanswered.
He suggested regional free trade agreement (FTA), both bilateral and multilateral, within the region and industrial restructuring in harnessing inclusive growth. Citing example of failure in regional trade, Mahmud said Safta could not be successful due to inclusion of special treatment for too many items.
Dr. Debapriya Bhattacharya said the country should re-discover the domestic demand as only export should not be the focus on growth prospects.
He emphasized the need for identifying the policy loopholes in regional cooperation as India recently imposed ban on cotton export and Turkey imposed additional duty on Bangladesh RMG export.
In his address, United Nations Director Dr. Nagesh kumar said, "cooperation can help spur more inclusive growth and drive the elimination of poverty in the sub-region. Greater regional integration not only increases intraregional trade, but also promotes investment in the sub-region's supply chain and production networks."
"This creates more and better jobs and builds productive capacity, particularly in the sub-region's least developed countries. Greater intraregional integration can also improve food and energy security, as well as help reduce disaster risk," he said adding "Collective regional responses and solutions are more effective in addressing these challenges than individual country approaches."
Muhammad Abdur Razzaque and Prof. Wahiduddin Mahmud also unveiled an ESCAP report prepared by its South and South-West Asia office setting out a policy agenda for harnessing cooperation among its ten member countries to promote inclusive, sustainable and resilient growth within the sub-region.
Nagesh Kumar pointed out the necessity of strengthening the value chain of manufacturing across the South and South-West Asian sub-region. He emphasized that political and policy interventions towards this goal would offer new opportunities and resources to overcome the development deficit.
"Regional cooperation in South and South-West Asia can be an important strategy to address many of the challenges facing the sub-region. In the decade ahead, the 10 member states of the sub-region have the chance to cooperate amongst themselves to ensure not only the sub-region's growth dynamism, but also that the sub-region re-emerges as the important crossroads between the East and the West that it once was," noted Dr. Nagesh Kumar.
Enhanced sub-regional cooperation can reduce the wide development and infrastructure gaps in South and South-West Asia, stimulating growth that is more inclusive, sustainable and resilient to economic shocks and natural disasters, the ESCAP report noted.
According to the ESCAP, South and South-West Asia Development Report 2012-13, the first in a series of biennial reports produced by the South and South-West Asia Office, the sub-region's slower growth, together with the uncertainty in the advanced economies is "exposing the sub-region's structural challenges".
These include the need for more inclusive development, closing wide infrastructure gaps, strengthening food and energy security, diversifying and moving up the value chain in industrial and export structures, and reducing the risks and costs of disasters, particularly in the sub-region's least developed countries (LDCs) and landlocked developing countries (LLDCs).
"Low productive capacity, particularly in the sub-region's LDCs, limits the sub-region's ability to move up the value chain and structurally transform its economies. Fundamental infrastructure gaps also threaten energy security, food security, and disaster risk in the sub-region," notes the report.
"Greater regional integration not only increases intraregional trade, but also promotes efficiency seeking investment in the sub-region's supply chain and production networks."
The report offers guidelines for South and South-West Asia to work together and with international development partners to boost food and energy security and trade, create employment opportunities for its large youth population, and enhance connectivity across the sub-region and beyond, to emerge as a global economic powerhouse and model of inclusive and sustainable development.
Prepared by the South and South-West Office in collaboration with a team of experts and think tanks, the report argues that regional cooperation can help solve many of the sub-region's challenges and help secure a more sustainable future, also providing an opportunity for the sub-region to re-emerge as the hub of East-West trade that it once was.
As a development partner of South and South-West Asia, now with a new office dedicated to the sub-region, ESCAP, in its report, highlights elements of a regional policy agenda for harnessing the potential of cooperation in select areas.