In praise of liberalisation

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Bangladesh was a strongly inward looking economy until the early eighties when it adopted trade liberalisation policies as part of the structural adjustment programme. It was found that during the period of extensive trade liberalisation from 1992 to 1996, fiscal deficits declined, inflation rate fell, current account deficits declined, foreign currency reserves increased, real effective exchange rate depreciated and dependence on foreign aid significantly reduced. The trade liberalisation policies have continued since then and, it appears, those have added to the economy's gains.
The import of machinery and raw materials at cheaper prices as a consequence of trade liberalisation gave a boost to internal production of all sorts and gave a particular thrust and competitiveness to the export-oriented industries. Thus industrialisation and exports of Bangladesh have surged in recent years and these developments are certainly linked to making the economy more open under relaxed regulations.
Therefore, there are reasons to promote further liberalisation of the economy. Of course, the liberalisation steps should be taken carefully to cushion against any sudden distresses for domestic stakeholders who could be hard hit by the process. But there should not be any turning the clock back on liberalisation policies.
Sohail Imran
Manipuripara, Tejgaon, Dhaka