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Wednesday, 16 July 2008

WB database reveals

Staff Correspondent

Bangladesh has one of the highest trade barriers in South Asia, according to a new database and ranking tool launched by the World Bank.

The database, "World Trade Indicators 2008--Benchmarking Policy and Performance" showed that in 2007 most developing countries continued to improve trade policies supporting greater integration.
At a launching ceremony of the trade index report Monday at the Bank's Dhaka office, country director Xian Zhu said that despite significant progress in the last decade and a half, the South Asian region still had the most restrictive tariff policies.
"Within the region, Bangladesh's trade restrictiveness is among the highest," he added.
According to the report, South Asian countries that have opened up with the rest of the world have remained closed to each other. Intraregional trade in South Asia was less than 2 percent of GDP, compared to more than 20 percent for East Asia.
"I would, therefore, like to urge the policymakers of the countries in the region to think about lowering protective barriers against each other as well as the rest of the world," said Zhu.
The WB official also said that Bangladesh would have to deal more seriously with its restrictive policy, poor infrastructure and red- tape to become a middle-income country.
"Bangladesh can thrive in the global economy by lowering trade barriers and improving logistic services."
Although overall trade restrictiveness had declined since the 1990s, the agricultural sector was still subject to high trade restrictiveness in both the developed and developing countries, the report read.
On the global food crisis, Zhu said net food- importer countries including Bangladesh had been seriously affected due to the new form of protectionism, restriction of grain exports by food surplus countries in response to the recent crisis.
The report claimed that the Bangladesh economy was saddled with one of the least liberal trade policy regimes even after trade reforms in the early 90s that included significant reduction of tariffs, removal of quantitative restrictions, and moves from multiple to a unified exchange rate and from a fixed to a flexible exchange rate system.
It ranked Bangladesh 113th among 125 countries.
The index however ranked Bangladesh at 59 regarding market access saying that the country faced a relatively more liberal market access than the average South Asian or low-income country.
Identifying property registration and enforcing contracts as the most problematic areas in doing business, the WB report said that Bangladesh's governance indicators were generally poor, and performance was poorest in control of corruption.
Regarding logistics performance, the report said that Bangladesh's efficiency of customs and other border procedures was at the bottom rung while the strongest logistic indicator was timeliness of shipment.
On telecommunication and IT infrastructure, Bangladesh's per capita rates for telephones and mobile phones and Internet users were all below the regional and low-income group averages, said the WB trade indicator index.
The report, however said that the 'low' 46.4 percent secondary school enrollment in the early 2000s was comparable to the regional means.
Bangladesh's 47.5 percent trade share in GDP was considerably below the South Asian and low-income group average, according to the report. It also said that exports grew between 10-12 percent since the mid-90s, thanks to the robust growth of the country's share in global apparel and textile exports.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue and AKM Atiqur Rahman of North South University also shared their comments on the report.
Mustafizur criticised the report's finding on higher openness in tariff leading to increased development saying that Haiti was one of the most liberal countries regarding tariffs.
He also said the report did not note Bangladesh's falling terms of trade.
Professor Atiqur raised the feasibility of lowering duties and tariffs, as Bangladesh's revenue earning was 50 percent dependent on international trade.

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