Bangladesh's manufacturing SMEs face severe institutional barriers, notably exclusionary bonded warehouse policies, which severely limit their global export competitiveness despite contributing significantly to the national economy, experts said at an event on Saturday.
Considering this, they called for comprehensive structural reforms, targeted financial support, and the development of shared infrastructure to unlock latent SME export potential ahead of the upcoming LDC graduation.
They made the observations at a national conference titled "Small and medium enterprises (SME) competitiveness and export growth in Bangladesh" held at the CIRDAP auditorium in the city's Topkhana Road area.
Business Initiative Leading Development (BUILD), in partnership with the Department of Foreign Trade Affairs and Trade (DFAT), Australia hosted the event.
Secretary to Economic Relations Division (ERD) Shahriar Kader Siddiky was present as the chief guest at the event presided over by Abul Kasem Khan, Chairperson of BUILD.
In his speech, Mr Kader Siddiky said the government is set to receive a project from the ADB, aimed at enhancing economic facilities and streamlining the approval process.
He said that Bangladesh is moving towards a fully digitalised economy, which would facilitate the implementation of the proposed reforms.
Addressing a concern raised in the BUILD presentation, he acknowledged that many SMEs remain unaware of available policies and support mechanisms.
Distinguished Fellow of Centre for Policy Dialogue (CPD) Dr. Mustafizur Rahman said extending facilities enjoyed by the RMG sector to other industries such as home textiles, light engineering, and agro-processed foods could substantially enhance their performance.
Citing examples from India, he also recommended exploring partial exporter support mechanisms.
He laid emphasis on the need for reforms in skills development, infrastructure, technology adoption, and awareness-building to help Bangladeshi SMEs to compete effectively at global markets.
Speaking on the occasion, Abul Kasem Khan said SMEs contribute significantly to the economy, as about 90 per cent of industrial establishments, a quarter of GDP, and about 8 million jobs are created by SMEs.
However, the contribution of SMEs to the export is not significant because of the absence of required support they need. They have to pay high cost for imported raw materials as they do not have bonded warehouse facilities and required utility and infrastructural support.
In the keynote presentation, Dr. Wasel Bin Shadat, Research Director at BUILD and Assistant Professor at IBA, University of Dhaka said the bonded warehouse regime, originally designed for the RMG sector, has become a structural filter that excludes non-RMG manufacturing SMEs.
He said that administrative complexity, limited finance, and high raw material tariffs dominate the obstacles, with exporters reporting significantly higher regulatory burdens than non-exporters.
Nawshad Mustafa, Director, SMESPD, Bangladesh Bank said that a segregated fund of BDT 50 billion, at an interest rate of 9.0 per cent, would be introduced to support SMEs.
He further highlighted the need to reform existing securities and stock exchange regulations to make capital markets more accessible to small enterprises, enabling them to raise funds and expand through stock market listings.
Director General-2 of the Prime Minister's Office Dr. Ahmed Ullah FCMA, BUILD CEO Ferdaus Ara Begum, Deputy Managing Director at the SME Foundation Nazeem Hassan Sattar, and First Secretary of NBR Naziur Rahman Miah spoke on the occasion, among others.
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