Attracting Investment in Bangladesh―Sectoral Analyses: A Diagnostic Trade Integration Study (Directions in Development)

This is volume 3 of a three-volume publication on Bangladesh's trade prospects. Bangladesh's ambition is to build on its very solid growth and poverty reduction achievements, and accelerate growth to become a middle income country by 2021, and share prosperity more widely amongst its citizens. This includes one of its greatest development challenges: to provide gainful employment to the over 2 million people that will join the labor force each year over the next decade. Moreover, only 54.1 million of its 94 million working age people are employed. Bangladesh needs to use its labor endowment even more intensively to increase growth and, in turn, to absorb the incoming labor. The Diagnostic Trade Integration Study identifies the following actions centered around four pillars to sustain and accelerate export growth: (1) breaking into new markets through a) better trade logistics to reduce delivery lags; as world markets become more competitive and newer products demand shorter lead times, to generate new sources of competitiveness and thereby enable market diversification; and b) better exploitation of regional trading opportunities in nearby growing and dynamic markets, especially East and South Asia; (2) breaking into new products through a) more neutral and rational trade policy and taxation and bonded warehouse schemes; b) concerted efforts to spur domestic investment and attract foreign direct investment, to contribute to export promotion and diversification, including by easing the energy and land constraints; and c) strategic development and promotion of services trade; (3) improving worker and consumer welfare by a) improving skills and literacy; b) implementing labor and work safety guidelines; and c) making safety nets more effective in dealing with trade shocks; and (4) building a supportive environment, including a) sustaining sound macroeconomic fundamentals; and b) strengthening the institutional capacity for strategic policy making aimed at the objective of international competitiveness to help bring focus and coherence to the government's reform efforts. This third volume provides in-depth analysis of eight different manufacturing and services sectors of the Bangladeshi economy, which help to illustrate the thematic analysis of volume 2 and ground it in sector experiences. Besides pointing to cross-cutting themes, the analysis also highlights some specific issues and actions that could help relieve constraints to faster export growth in these sectors. This is volume 3 of a three-volume publication on Bangladesh's trade prospects. Bangladesh's ambition is to build on its very solid growth and poverty reduction achievements, and accelerate growth to become a middle income country by 2021, and share prosperity more widely amongst its citizens. This includes one of its greatest development challenges: to provide gainful employment to the over 2 million people that will join the labor force each year over the next decade. Moreover, only 54.1 million of its 94 million working age people are employed. Bangladesh needs to use its labor endowment even more intensively to increase growth and, in turn, to absorb the incoming labor. The Diagnostic Trade Integration Study identifies the following actions centered around four pillars to sustain and accelerate export growth: (1) breaking into new markets through a) better trade logistics to reduce delivery lags ; as world markets become more competitive and newer products demand shorter lead times, to generate new sources of competitiveness and thereby enable market diversification; and b) better exploitation of regional trading opportunities in nearby growing and dynamic markets, especially East and South Asia; (2) breaking into new products through a) more neutral and rational trade policy and taxation and bonded warehouse schemes; b) concerted efforts to spur domestic investment and attract foreign direct investment, to contribute to export promotion and diversification, including by easing the energy and land constraints; and c) strategic development and promotion of services trade; (3) improving worker and consumer welfare by a) improving skills and literacy; b) implementing labor and work safety guidelines; and c) making safety nets more effective in dealing with trade shocks; and (4) building a supportive environment, including a) sustaining sound macroeconomic fundamentals; and b) strengthening the institutional capacity for strategic policy making aimed at the objective of international competitiveness to help bring focus and coherence to the government's reform efforts. This third volume provides in-depth analysis of eight different manufacturing and services sectors of the Bangladeshi economy, which help to illustrate the thematic analysis of volume 2 and ground it in sector experiences. Besides pointing to cross-cutting themes, the analysis also highlights some specific issues and actions that could help relieve constraints to faster export growth in these sectors.--Résumé de l'éditeur Front Cover -- Contents -- Foreword -- Acknowledgments -- About the Authors -- Abbreviations -- Chapter 1 Assessment of the Shipbuilding Sector in Bangladesh: Capabilities and Future Potential -- Introduction -- Sector Profile -- Market Perspective -- Capabilities and Competitiveness of the Shipbuilding Industry in Bangladesh -- Key Success Factors -- Future Development Potential and Challenges -- Conclusions -- Notes -- References -- Chapter 2 Light Engineering: Bicycles -- Introduction -- Sector Profile: Bicycles and Bicycle Parts -- The Bicycle Industry in Bangladesh -- Value Chain Analyses: Bicycles and Bicycle Parts -- Key Market Drivers and Options for Growth -- Improving Competitiveness: Policy Options -- Notes -- References -- Chapter 3 Light Manufacturing: Diversified Jute Products -- Introduction -- Sector Profile: Production, Consumption, and Exports -- New Market Drivers and Opportunities for Growth and Diversification -- Institutional and Regulatory Environment, Market Structure, and Supply Chain -- Sector Policy -- Integrated Value Chain Analysis for Diversified Jute Products -- Conclusions and Recommendations -- Annex 3A: Potential Jute Sector Classifications -- Annex 3B: Potential Diversified Jute Product Classifications -- Annex 3C: Comparative Profile of the Jute Sector in Bangladesh and India, Annual Data, 2007-10 -- Annex 3D: Support Institutions and Their Activities -- Notes -- References -- Chapter 4 Light Manufacturing: Non-Leather Footwear -- Introduction -- Sector Profile -- Key Market Drivers and Options for Growth -- Institutional and Regulatory Environment, Market Structure, and Supply Chain -- Integrated Value Chain Analysis for Non-Leather Footwear -- Policy Recommendations -- Annex 4A: Footwear Classifications -- Annex 4B: Bangladesh Footwear, All Categories, FY2012 -- Notes -- References Identifies a four-pillar strategy for Bangladesh to sustain and accelerate export growth: breaking into new markets, breaking into new products, improving worker and consumer welfare, and building a supportive environment.