Trade
Like many places around the globe, Bangladesh has made great strides in liberalizing trade over recent decades. Twenty-five years ago, the protection rate, which takes into account tariffs and other trade barriers, was 74 percent. Today, that rate is just 27 percent.
Slashing high tariffs and opening up the economy has produced great benefits for the country, because consumers can buy products where they can be produced the cheapest. But costs from some aspects of trade policies that remain inefficient and cumbersome continue to hold back additional gains.
Proposed Strategies
| Strategy | Takas of benefits per taka spent |
|---|---|
| Trade liberalization | 10 |
| Trade facilitation | 2 |
| Bond market | 3 |
Benefit Cost Analysis of Trade Liberalization and Trade Facilitation Interventions in Bangladesh
Research by Selim Raihan, economics professor at the University of Dhaka and executive director of the South Asian Network on Economic Modeling (SANEM), and Farazi Binti Ferdous, research fellow at SANEM, highlights trade policy reforms that can benefit Bangladesh.
There still exist significant barriers, which impact adversely on Bangladesh’s export competitiveness."
- Selim Raihan & Farazi Binti Ferdou
Cost Benefit Analysis of Establishing a Secondary Bond Market in Bangladesh
Research by M.G. Mortaza, an economist at the Asian Development Bank, and Wasel Bin Shadat, a lecturer in econometrics at the University Of Manchester, examines a related proposal to boost investment and drive economic growth: creation of a secondary bond market. The lack of a well-developed bond market and, by extension, the absence of an advanced financial sector, impedes economic growth.
Bangladesh has a primary bond market but a weak secondary one. Like other developing countries, Bangladesh desperately needs financing for its infrastructure projects and industrial expansion."
- M G Mortaza & Wasel Bin Shadat
Liberal trade policies to boost the best
In a series of op-eds published in The Daily Star and Prothom Alo, Bjorn Lomborg outlined the key findings of the path-breaking research produced by the Bangladesh Priorities project.
Bangladesh's export sector has boomed, particularly in apparel. But costs from some aspects of trade policies that remain inefficient and cumbersome continue to hold back additional gains that could be achieved."
- Bjorn Lomborg
What's the smartest solution for Bangladesh?
Trade facilitation and reforming trade policies would bring substantial benefits to the economy. If you were in charge, how would you choose to spend resources aimed at doing the most good for the country? After reviewing 1,000s of pages of peer-reviewed research an Eminent Panel ranked 72 solutions from the best to the worst in terms of delivering the most social, economic and environmental value for money. Find out what they ranked the highest here.poll.