TBT DESK: Speakers at a conference organised by the Centre for Policy Dialogue (CPD) emphasised that Bangladesh must not overlook its domestic market when striving for export diversification.
Prof Rehman Sobhan, chairman of CPD, highlighted that successful industrialisation in countries like China was initially driven by their vast internal markets. "If you look at China, it primarily began its industrialisation because of its billion-dollar domestic market. The major attraction for foreign direct investment (FDI) in China was access to this market," he stated.
Speaking as a special guest at the conference, held on Monday at BRAC Centre Inn in Dhaka's Mohakhali, Prof Sobhan stressed the importance of leveraging Bangladesh's growing internal market.
The two-day conference's first session was chaired by Dr K A S Murshid, chairman of the Task Force on Economic Restructuring. Commerce Advisor Sheikh Bashir Uddin attended as the chief guest, while Task Force members Selim Raihan and Dr Mohammad A Razzaque presented the keynote paper.
Prof Sobhan pointed out that global automobile manufacturers entered China, transforming it into the world's largest producer of automobiles, surpassing the United States. "China's domestic market was the primary attraction," he said. He further noted that China has also emerged as a leading exporter of electric vehicles.
Highlighting Bangladesh's potential, he remarked, "With a population of 175 million and an annual growth rate of 6%, our domestic market is indeed attractive. Many foreign investors in Bangladesh have been drawn by this market. It is crucial to assess whether we are adequately capitalising on this opportunity and how we can enhance its quality." He suggested that once industries mature within the domestic market, they could then transition to exports, citing bicycles and electronic products as examples.
Reflecting on past challenges, the CPD chairman noted that despite identifying alternatives for export diversification over the past three decades, many issues remain unresolved. "Unless we diagnose these challenges correctly, we cannot offer genuine policy reforms for the future. This remains a significant unresolved issue, necessitating both academic research and government policy interventions."
He cited persistent problems in sectors such as leather, ready-made garment (RMG) diversification, and backward linkages in supply chains. "These issues have not just been discussed in general; a dedicated task force has been working intensively on them," he said.
Prof Sobhan further stressed the importance of focusing on the domestic market alongside exports.
"At one time, we had only a single government-owned steel plant-Chittagong Steel Mills-which produced a mere 100,000 tonnes of basic steel. Today, major manufacturers like BSRM produce over a million tonnes and offer a more diversified and sophisticated range of products."
He expressed satisfaction that the task force's report includes recommendations on how micro, small, and medium enterprises (MSMEs) can improve product quality, integrate into export sectors, and enhance productivity through backward linkages.
"We have long spoken about attracting FDI, but we have not truly succeeded in doing so. It is imperative to engage in meaningful conversations with existing FDI investors in Bangladesh, understand their challenges, and actively work towards resolving them," he concluded.