Export diversification, more FDI must for sustainable BD growth: EU

The European Union (EU) has said Bangladesh must look at export diversification and attracting more foreign direct investment (FDI) seriously to make the country’s “very admirable and amazing” economic growth sustainable. 

It said Bangladesh has witnessed over 7 percent of GDP growth over the last couple of years.  

“It’s still a challenge and progress in these areas will depend on domestic reforms agenda,” EU Ambassador in Dhaka Rensje Teerink told UNB in an interview. 

She said Bangladesh really needs to look at how it can attract businesses and give this confidence to the investors that there will be ease of doing business. 

“Bangladesh isn’t performing well at all in terms of ease of doing business,” said the EU Ambassador. 

Bangladesh has gone one notch down in the World Bank's ranking of ease of doing business mainly due to the hurdle businesses face here at the start of their operations.

Bangladesh holds 177th position among 190 economies, according to the WB's Doing Business report 2018. 

Despite this huge impediment, Ambassador Teerink said, Bangladesh is growing so fast and mentioned that imagine how much Bangladesh economy could grow if Bangladesh could be a better host for those businesses. “Because this (growth) is happening despite challenges.” 

Asked about government’s 100 economic zones plan, the EU Ambassador referred to a female private sector speaker at Bangladesh Development Forum (BDF) saying why not one or five economic zones first and do that properly and take lessons learned. 

She said the government’s plan to have 100 economic zones sounds good at the same time it sounds very ambitious. 

Responding to a question, the EU envoy said, “In terms of democratic space, we hope all contenders will come on board and the whole exercise will be free and fair.”

Ambassador Teerink also said they hope to see opposition parties participating in the elections. 

She said democracy, governance and human rights – these are something they follow closely worldwide and laid emphasis on addressing concerns in these areas. 

“For me, it will be an exciting time (being here in election year),” she said adding that they have already discussed with the Election Commission over sending EU Election Observation Mission if they find situation favorable.

On irregular Bangladeshi migrants living in the Europe, the Ambassador said, “We have made very good progress. Migration has become a big concern in the Europe in the last couple of years.” 

The European Union (EU) and Bangladesh signed the Standard Operating Procedure (SOP) to bring back all irregular migrants from the Europe. A technical team will be coming to Dhaka soon to see the progress. 

The EU Ambassador laid emphasis on rebranding Bangladesh saying the whole image of Bangladesh is completely different now than it was 10-15 years ago.

She said they will continue to working with the private sector and garment sector leaders so that the whole readymade garment sector becomes ILO-compliant one. 

“There is still some works to be done. Bangladesh Labour Law needs to be ILO standard,” Ambassador Teerink said reiterating their joint commitment to the Sustainability Compact, including the respect of labour rights, in particular with regard to freedom of association. 

Talking about Bangladesh’s aspiration to become middle-income country, the EU envoy said it is a good goal and there is of course always danger middle income trap. “Bangladesh needs to look at it and export diversification remains the key issue.” 

Bangladesh will have to go for the GSP Plus status from the European Union when it graduates to the developing country bracket in 2021.

As a least-developed country Bangladesh has been enjoying zero-duty benefit to the EU under its Everything but Arms scheme since 1971. But once it becomes a developing country, Bangladesh will no longer be eligible for the privilege.

Strengthening workplace safety, improved labour rights, saving the environment and reduction of corruption are some of the major conditions for receiving the GSP Plus status from the EU, destination for 60 percent of Bangladesh's garment products.

Source: unb