[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Governance failure stalls financial sector progress: BB governor

The governor speaks at Mastercard Excellence Awards 2025

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Governance failure stalls financial sector progress: BB governor
The governor speaks at Mastercard Excellence Awards 2025

Bangladesh's financial sector has fallen short of expectations due to prolonged governance failure, weak regulatory enforcement and delayed reforms, despite commendable growth in the broader economy, Bangladesh Bank Governor Ahsan H Mansur said today.

He also described the sector's overall performance as "disappointingly behind", blaming structural weaknesses that remain largely unaddressed.

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The governor made the comments at the Mastercard Excellence Awards 2025 ceremony at the Radisson Blu Water Garden Hotel, Dhaka,

Eighteen institutions received a total of 33 awards under 19 categories in recognition of contributions to innovation, financial inclusion and digital transformation in the 2024-25 fiscal year.

The governor said that although the sector appears institutionally regulated, irregularities persist "underneath", owing to lax enforcement.

Referring to the local saying, which translates to 'hard on the outside, soft inside', he pointed to a disconnect between regulatory norms and operational practice.

"Regulations are stringent, but compliance mechanisms allow many irregularities to pass through. Without structural correction, the financial sector will continue to lag even as the economy expands," he said.

Mansur said that while Bangladesh's economy is now comparable in size to Singapore's, the financial sector remains "considerably narrow".

"The economy cannot fully reap the benefits of its size due to corruption, misallocation of assets and regulatory failures," he added.

He stressed that meaningful reform, rather than procedural adjustments, is essential to strengthen financial governance and reduce systemic inefficiencies.

The governor acknowledged recent steps by the central bank, including the removal of tax return submission and TIN requirements in card issuance, as well as the resolution of complications around purchasing international airline tickets via credit card.

"Customers can now buy tickets online as per their credit limit without it being counted in their annual foreign exchange quota. These are positive developments, but more substantive reforms are needed," he said.

Gautam Agarwal, president of Mastercard South Asia, said Bangladesh's financial transformation is underway despite the barriers.

According to him, the country has nearly 15 crore active mobile financial service accounts, internet usage stands at 70-74 percent, and annual remittance inflow totals $2.5-2.6 billion.

However, around 80 percent of transactions still rely on cash, which he termed a major obstacle to digitalisation.

"India underwent a similar journey. A little over a decade ago, only 2-5 percent of transactions there were digital; today it stands at 30-35 percent. Bangladesh is now positioned for similar transformation," he said.

Agarwal added that Mastercard has consistently invested in Bangladesh over the past 13 years, with a focus on financial inclusion alongside card services.

At today's awards ceremony, Mutual Trust Bank and Eastern Bank secured the highest number of recognitions, winning in four categories each.

City Bank, Islami Bank Bangladesh, United Commercial Bank and BRAC Bank received awards in three categories each, while Dhaka Bank won in two.

Single-category awards went to: Mercantile Bank, SSL Commerz, Al-Arafah Islami Bank, Prime Bank, AB Bank, Dutch-Bangla Bank, Southeast Bank, Pubali Bank, Pathao Pay, ACI Logistics (Shwapno) and bKash.

The seventh edition of the awards, held under the theme "Inspired by Future", also marked Mastercard's 13th year of operations in Bangladesh.

In his welcome address, Syed Mohammad Kamal, country manager for Mastercard Bangladesh, said the company has launched 30 new products in the past 12 months and is currently operated entirely by local professionals.

He noted that Mastercard operates in 222 countries and that four out of every five global fintech firms choose it as their strategic partner.

"Our security solutions prevented over $5 million in cyber threats in Bangladesh alone in recent months," he said.

The event was attended by Bangladesh Bank Deputy Governor Md Zakir Hossain Chowdhury, Mastercard Bangladesh Directors Zakia Sultana and Sohel Alim, senior officials of leading banks, fintech organisations, representatives from the diplomatic community and corporate executives.​

 

[Saif]

Govt sees early signs of economic recovery

The government has painted a relatively stable picture of the economy in a report to the United Nations, saying early signs of recovery appeared in the middle of this year.

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Govt sees early signs of economic recovery

Report to UN claims stabilisation and improving indicators, but economists highlight inflation, unemployment, weak investment and mounting debt concerns.

The government has painted a relatively stable picture of the economy in a report to the United Nations, saying early signs of recovery appeared in the middle of this year.

Some economists, however, remain critical of key macro indicators and say that the outlook is far from assured.

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"The complacent views shown in the report are not consistent with the facts," said Zahid Hussain, former lead economist of the World Bank Dhaka office.

He said that of the three major macroeconomic factors, foreign exchange, inflation and financial distress, only foreign exchange shows improvement. Inflation and financial distress continue to pose serious concerns.

Submitted early this month to the United Nations Committee for Development Policy (UN-CDP), the annual report itself acknowledged several challenges highlighted by economists.

Even so, it argued that the macroeconomic performance of Bangladesh is "unique" compared to countries where regime change occurred through violent overthrow or mass uprising.

Drawing comparisons with Sri Lanka and Indonesia, the finance ministry report claimed that several economic indicators in those countries failed to recover after government changeovers, unlike the development trajectory of Bangladesh.

It said those economies saw sharp declines in output and foreign direct investment, along with rising inflation, while Bangladesh maintained positive output and FDI growth and reported declining inflation.

"As a result, Bangladesh could avoid any significant development setbacks," said the report, continuing the narrative of the past four years ahead of the country's scheduled graduation from the least developed country club next year.

Indonesia saw its poverty rate jump from around 15 percent to 33 percent within a year after the changeover, while around 26 percent of the population in Sri Lanka lived in poverty in 2023, a year after the violent fall of the regime, according to the report.

In support of the claim of "early signs of recovery" by mid-2025, the report cited higher GDP growth, easing inflation, a stabilised exchange rate and improvements in foreign exchange reserves and the balance of payments.

The government attributed these gains to measures such as the introduction of a pegged exchange rate system, market-based interest rates, reduced subsidies and rationalised public expenditure. A temporary freeze on non-essential spending also created fiscal space for priority sectors, including health, agriculture and social protection.

The report highlighted a 12.5 percent rise in the Dhaka Stock Exchange Broad Index (DSEX) in July as evidence of growing investor confidence. It ranked third among major global market performers that month. The index gained 605 points to close at 5,443, the highest level in nine and a half months.

However, Hussain dismissed the stock market surge as short-lived.

"The rising trend of stock market indicators was temporary, and the surge in the DSEX index did not last long," said the economist. "So, it cannot be said that investor confidence is restored only with this indicator. The daily trading at the Dhaka Stock Exchange is also showing a downward trend."

Growth figures also challenge the somewhat upbeat narrative of the report.

Real GDP growth has declined since FY22, dropping from 7.1 percent to a provisional 3.97 percent in FY25.

After a strong rebound in FY21 to FY22 driven by manufacturing and exports, growth slowed due to rising inflation, foreign exchange shortages and weaker private investment, the report mentioned.

It said the sharper decline reflects continued macroeconomic pressures, subdued demand and slower external trade, indicating a period of adjustment after years of expansion.

According to the report, quarterly data showed modest gains. In the first quarter of FY25, agricultural output grew by only 0.76 percent, while industry and services expanded by 2.44 percent and 2.41 percent.

Bangladesh is still struggling to manage the high inflationary pressure following the outbreak of the Russia-Ukraine war.

Although the general rate eased from 9.05 percent in May 2025 to 8.48 percent in June this year, it hovered around 8 percent in subsequent months.

"Although the inflation is not in double digits now, it is still high in Bangladesh," said Hussain.

Meanwhile, employment also offers little comfort.

Unemployment rose to 3.66 percent in 2024 from 3.35 percent in 2023. Youth unemployment increased to 8.07 percent and the share of NEET (Not in Education, Employment, or Training) youth climbed to 20.3 percent. Educated joblessness also increased to 13.5 percent from 13.1 percent.

Hussain said poverty is growing due to stagnant employment and declining welfare conditions.

The report said that the International Monetary Fund (IMF) in 2023 categorised Bangladesh as a "low risk" country in terms of debt distress, but a recent staff mission indicated the risk may be elevated to "medium" due to evolving domestic conditions.

Moreover, the report said energy shortages continue to hamper the industry. The government is also struggling to revive the banking sector, weighed down by a massive volume of non-performing loans (NPLs).

Hussain said the central bank has not published updated NPL data since March this year, and the level remains high. Private sector credit growth is weakening due to monetary tightening.

Selim Raihan, an economics professor at Dhaka University, said inflation has fallen sharply in many countries but remains elevated in Bangladesh.

He also said investor confidence has not improved, pointing to one of the lowest private sector credit growth rates in the region.

"There are many uncertainties in the economy, such as politics, employment and economics. The government could have become more critical in portraying the country's economy in the annual report to show the real picture. But it opted for a rosy picture," he commented.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, said it is true that the economy was in a crisis situation and that some indicators, such as foreign exchange reserves, are now improving.

"However, it is still a far cry to say the economy is doing well, even if some bounce back has taken place. Employment has decreased, the poverty rate is rising, private sector credit growth is falling, debt obligations are increasing, and energy imports are growing to meet demand."

"We are not in a comfort zone now," said Reaz.​

 

[Saif]

Economy trapped in vicious cycle of high interest rates, weak growth: Dr Zaidi Sattar

Bangladesh’s economy has slipped into a vicious circle of high interest rates, persistent inflation, weak investment and slowing GDP growth, making it increasingly difficult to break out of the cycle, said Dr Zaidi Sattar, Chairman of the Policy Research Institute of Bangladesh (PRI). Speaki

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Economy trapped in vicious cycle of high interest rates, weak growth: Dr Zaidi Sattar

FE ONLINE REPORT
Published :
Nov 27, 2025 17:35
Updated :
Nov 27, 2025 17:35

Bangladesh’s economy has slipped into a vicious circle of high interest rates, persistent inflation, weak investment and slowing GDP growth, making it increasingly difficult to break out of the cycle, said Dr Zaidi Sattar, Chairman of the Policy Research Institute of Bangladesh (PRI).

Speaking on Thursday, he said Bangladesh should examine how other countries responded to the 1997 Asian financial crisis and the 2008–09 global financial crisis to identify practical policy options for addressing the current macroeconomic stress.

The eminent economist made the remarks while speaking at an event at the PRI office in Dhaka to launch the October issue of Monthly Macroeconomic Insights (MMI), published under the Centre for Macroeconomic Analysis (CMEA) of PRI.

Anwar-ul-Alam Chowdhury, President of the Bangladesh Chamber of Industries (BCI), attended the programme as chief guest, while Dr Ashikur Rahman, Principal Economist at PRI, presented the keynote.

Dr Ashikur Rahman said the economy continues to face elevated inflation alongside deep-seated problems in the banking sector. The policy response—raising the policy rate and aggressively tightening liquidity—has helped bring inflation down to a 39-month low, he noted.

Even so, he warned that inflation could pick up again in the coming months as public expenditure rises, consumer spending strengthens and possible supply-chain disruptions emerge.

He said that deposit growth has returned to an upward trajectory, with deposits rising over the past two months and averaging around 10 per cent, and added that depositors confidence rebuild following incremental reforms in the banking sector by the interim government.

However, private-sector credit growth has slipped to a multi-year low as political uncertainty, financial-sector vulnerabilities and global instability have kept investors on the sidelines, he said.

“This restraint is visible in capital-machinery imports,” he said, pointing out that imports fell by 10.92 per cent in the July–September period of the current fiscal year, after dropping 20 per cent in the previous year.

Anwar-ul-Alam Chowdhury said the economy is “bleeding,” adding that the current government “basically does not care about the business community,” a situation he described as “very unfortunate.”

He said industries, particularly in the manufacturing sector, are under severe strain due to high inflation, rising interest rates and an energy crisis, with power generation dropping by 42–45 per cent.

“We must address the employment challenge, make industry more competitive and diversify our industrial base if we are to create sustainable jobs,” he said.​

 

[Saif]

Why Bangladesh fails to diversify its exports

It is never wise to put all eggs in one basket where a single misstep can cause them all to break. A nation's "basket" is its export profile and over-reliance on a single sector makes it vulnerable to volatile global demand. Yet despite decades of discussion and repeated calls for diversification,

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Why Bangladesh fails to diversify its exports

SYED MUHAMMED SHOWAIB
Published :
Nov 28, 2025 23:23
Updated :
Nov 28, 2025 23:23

It is never wise to put all eggs in one basket where a single misstep can cause them all to break. A nation's "basket" is its export profile and over-reliance on a single sector makes it vulnerable to volatile global demand. Yet despite decades of discussion and repeated calls for diversification, Bangladesh's export structure has shifted very little since it first entered global markets. The decline of jute and jute goods from their once-dominant position did not trigger any meaningful broadening of the export base either. Instead, export concentration simply shifted to a narrow set of new products. Today, a handful of goods make up most of the export basket and a limited number of markets continue to absorb the bulk of what Bangladesh sends abroad.

Over the past few decades, readymade garments came to define Bangladesh's export identity and it still influences where Bangladeshi products can reach. While some nations have moved away from apparel manufacturing and now import from Bangladesh, many others still produce their own garments and have limited demand for our supplies. But because the garment sector already guarantees a dependable global market, they draw most of the focus, leaving other exportable products without the push they need to grow. Until new products establish themselves, the expansion of destinations will continue to be limited. It is in this context that the recent gains in a few non-traditional sectors should be judged. Rather than signalling a sudden transformation, these trends highlight how long Bangladesh has waited for industries beyond apparel to gain a solid foothold. The toy industry and the wider plastics sector provide examples of what might have emerged much earlier and on a much bigger scale had there been sustained investment and consistent policy commitment.

Recent figures show that toy exports could grow more than eightfold within the next five years, a pace that would have seemed unthinkable not long ago. In 2022-2023, toys from Bangladesh reached 88 countries and earned more than US$75 million. Projections now suggest that by 2030 this amount could climb to nearly $470 million. If Bangladesh stays on this path, it could even break into the ranks of the world's top 30 toy exporters soon. At home, plastics now serve a massive domestic market worth Tk 400 billion. The industry contributes about Tk 35 billion in annual revenue and supports nearly 5,000 factories, most of which are small and medium enterprises that form the backbone of our local economy. This goes to show that there are industries in Bangladesh with genuine potential, ready to grow if given the right support.

That said, the success of toys and plastic, impressive as it is, doesn't change the fact that they remain isolated examples within an export basket still heavily dominated by one sector. The clearest evidence of this is that readymade garments continue to account for more than 82 per cent of export earnings. Policymakers and business leaders have acknowledged the need for a broader product base and more diverse destinations but this shift has not taken place. Businesses have simply responded to the incentives and market conditions in front of them, and those conditions have kept garments at the centre of the export earnings.

This overconcentration doesn't stop with products but it extends to markets as well. Nearly two thirds still go to Europe and the United States for reasons understandable. According to the Export Promotion Bureau, 44 per cent of all exports go to the European Union alone because tariff-free and quota-free access is still available for least developed countries. Even as Bangladesh achieved a record $48 billion in exports last year, the share going to these two markets declined only slightly from 65 per cent to 62 per cent over three years. Taken together, these trends show how firmly set our reliance has become. A few emerging sectors, promising as they are, cannot change this underlying vulnerability. Without real diversification, Bangladesh will continue to depend on a small and fragile group of markets which keeps the economy exposed in ways that have persisted for years.

Thus far, the range of exportable goods remains critically narrow, which is why non-apparel products have struggled to gain significant traction in new markets. When the list of products is small, the list of markets naturally stays small too, no matter how often diversification is discussed. This basic issue also explains why cash incentives for non-traditional exports have yielded only modest results. Today, these incentives cover more than 40 products, with garment exporters receiving an additional two per cent for shipments beyond the main markets of Europe, North America and the UK. Yet analysts are far from unanimous on how effective these measures really are. Because garments dominate the export structure so heavily, most of the incentives inevitably end up in that single sector. Many experts argue that support should instead target specific products and specific destinations where progress can be clearly tracked, rather than being shaped by pressure from powerful industry groups.

Outside the garment sector, most industries face a different set of challenges. Many struggle to meet international quality and certification standards while weak domestic testing and accreditation systems slow down market entry and drive up costs. High logistics expenses, chronic congestion and inefficient transport networks further weaken competitiveness. On top of that, the absence of free trade agreements blocks access to lower tariff rates in potential new markets. These barriers must be removed.

The journey towards a more diverse export economy is challenging but it cannot be avoided. If Bangladesh wants lasting economic stability, the vision of diversification must move beyond rhetoric and translate into decisive action. The rise of the toy industry is a proof that steady effort can pay off. Applying the same commitment to other promising sectors is the surest way to build a balanced and resilient export future.​

 

[Saif]

Next frontier of Bangladesh's export diversification

There are always points in the economic development of countries where the roadmap for the future becomes distinctly visible once the driving engine, which for so long propelled success to dizzying heights, is no longer commensurate with ambitions born out of success. Bangladesh has finally reached

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Beyond readymade garments industry
Next frontier of Bangladesh's export diversification

Serajul I Bhuiyan
Published :
Nov 27, 2025 23:53
Updated :
Nov 27, 2025 23:57

There are always points in the economic development of countries where the roadmap for the future becomes distinctly visible once the driving engine, which for so long propelled success to dizzying heights, is no longer commensurate with ambitions born out of success. Bangladesh has finally reached that juncture in its economic development. For over four decades, its success story has remained its readymade garments (RMG) industry, which has emerged as a success saga for so long that it has made Bangladesh into the second-largest supplier to the global fashion stores. However, no country that has ambitions to reach trillion dollars can bank on its second-largest contributor to its export revenue to contribute above 80 per cent to its revenue streams.

A NATION AT AN EXPORT CROSSROADS:

The success in Bangladesh's exports has long had its roots in its RMG industry. Units multiplied exponentially, global buyers poured in, and for countless numbers of countrywomen, doors to empowerment swung wide in welcome. However, it has also created a new kind of vulnerability for Bangladesh vulnerability to overdependence on its RMG industry. The problem with any industry that contributes so greatly to country exports is that any adverse shock whether global recession, supply-chain disruptions, or geopolitical tensions can impact the entire country.

Economists are warning that Bangladesh has now reached the point where single-sector approach growth is no longer possible. The future of the garments industry is undergoing tremendous change due to automation, nearshoring, government regulations on climate change, and sharp competition from other countries such as Vietnam, Turkey, and Ethiopia. It is no longer possible for Bangladesh to fashion its way to middle-class global status.

The opportunity exists. Today, Bangladesh has youth, technology, entrepreneurship, and geographic linkages between South Asia, Southeast Asia, and the Bay of Bengal on its side. Now, the challenge lies in ensuring that these factors are leveraged for Diversified Export on behalf of Bangladesh.

PHARMACEUTICAL SECTOR - THE BEHIND-THE-SCENES GIANT: This industry has remained largely overshadowed by the dominance of garments in public rhetoric but is perhaps second to none in terms of its promise for Bangladesh as a high-value industry since their independence. Currently, local pharmaceutical companies are meeting the entire country's demand, in addition to supplying more than 150 countries in Asia, Africa, and Latin America.

This experience in making generics, taking advantage of the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) exemption for Least Developed Countries (LDCs), has provided Bangladesh with a fantastic foundation. With Bangladesh poised to graduate and move out of its LDC status, pharmaceuticals' ability to develop advanced formulation, biologics, vaccine development research, or API manufacturing will provide assistance in upgrading pharmaceuticals to a multi-billion-dollar industry via its global markets.

As observed by industry analysts, with rising demand for cheaper drugs in the global arena, especially within the developing countries, Bangladesh has emerging opportunities for its competitive advantage, which is its ability to provide quality generic drugs at cheaper rates. However, to effectively exploit this opportunity, modifications in regulatory matters and emphasis on global acceptance for quality certification are essential.

The export councils are also of the view that "if a holistic approach can be adopted whereby tax incentives for API production, streamlined approval schedules for drugs, and brand-building campaigns for 'Made in Bangladesh Pharma' are provided, then this industry can emerge as one of its biggest earners of foreign exchange by 2035. This is a new frontier that Bangladesh cannot miss."

LEATHER & LIGHT ENGINEERING -- EXTENDING MANUFACTURING OUTSIDE THE CONVENTION: The leathers industry remains one of the most underrated sectors for exports for Bangladesh. For many years, it has struggled with issues of compliance, environment, and delays in relocation. However, the opportunity in this sector is enormous. One thing that international buyers always mention is that products such as leathers and footwear from Bangladesh are on par with international standards, but environmental certification creates hurdles for entry into higher markets.

Effective and full implementation of the Savar Tannery Industrial Estate could change the face of the industry overnight. With efficient treatment facilities for effluent, common certification, and environmental observance, it will not be difficult for the Bangladesh leather goods industry to rake in additional revenue to the tune of US$5 to $7 billion every year. It is important to ensure that they are confident about the entire observance structure.

Light engineering is also a bright spot. This industry does not get the attention that it deserves, but it has great prospects to emerge as the backbone of a diversified manufacturing economy. The Bangladeshi companies are already making parts for bicycles, automobiles, agricultural machinery, and home appliances. With proper policy assistance in terms of lower import duties on basic materials, special zones for precision engineering, and technical education in precision machining, this country can emerge as a Tier-2 supplier to global companies.

Vietnam, Thailand, and Malaysia exploit this approach to the fullest. Bangladesh has every opportunity to pursue this approach too by creating avenues for SMEs to innovate, grow, and gain access to international buyers.

INFORMATION TECHNOLOGY SERVICES -- THE DIGITAL FRONTIER THAT AWAITS TAKEOFF: One of the most underutilised national resources for Bangladesh is its ICT talent. With over 650,000 freelance ICT professionals, coupled with thousands of new ICT graduates annually, Bangladesh has emerged as one of the top providers of online talents in the global marketplace. This is only a fraction of its full potential.

Information technology services relating to software development, security, cloud services, AI services, and BPO services have emerged as new areas for global exports. Nations such as Vietnam and the Philippines are banking on their youth to generate billions in revenue in terms of information technology exports. Bangladesh has this opportunity too, but for that, right investments are required.

Three are always emphasised. First, the country needs to develop its national approach to skills acceleration to teach children the skills that are most needed by the global environment, including cloud technology, AI, mobile development, and data analytics.

Second, Bangladesh must develop top-class global technology infrastructure to include always-on broadband and qualified data centers that give global clients assurance and confidence in terms of security and reliability.

Third, Bangladesh must develop its global brand to enable it to emerge as a secure outsourcing location, which entails both publicity and improvement in standards.If this happens, IT services can emerge as one of the country's biggest earners of foreign exchange within a decade, making not only its economy but also its workforce diverse.

AGRO-PROCESSING -- WHERE RURAL PROSPERITY AND WORLD DEMAND MEET: Agricultural products are key to Bangladesh, but its agricultural export growth has remained well below its actual potential. Agro-processing acts as a 'connecting link' between local farmers and global supply chains. Various products including shrimp, ice-cubed fish, processed fruits, spices, juice, 'ready to eat' products, and 'halal products' also find substantial markets abroad.

However, inconsistencies in supply chains restrict its ability to participate effectively in niche markets. Cold storage facilities are insufficient, certification for food safety is distributed over various government agencies, and its inability to provide integrated logistics increases its reliance on costly exports. This makes Bangladesh sell their products raw or processed to only tap into a very limited portion of international value addition.

Agricultural economists recommend that for Bangladesh, it is essential to develop countrywide cold chains between farmers, processors, and exporters. This will itself decrease post-harvest losses to a substantial extent and enhance overall exports. Moreover, contract farming arrangements where input supplies and training are also provided to farmers can ensure quality.

The demand for halal, organic, and sustainably produced food products is escalating exponentially. Bangladesh, with its original fit in this domain, ought to be at the forefront in the global halal food market. It has tremendous potential to emerge as a multi-billion-dollar industry for agro-processing, concurrently lifting up agricultural livelihoods and countrywide food industries.

THE POLICY IMPERATIVE: No industry can grow in an environment where policies are not favorable. Economists repeatedly stress that Bangladesh needs to introduce a new type of incentive structure one that favors added-value, R&D, and adherence rather than added numbers.

The incentives for cash support need to focus on research, development skills, green manufacturing, and sophistication in exports. An enterprise into biologics (a broad category of medicines derived from living organisms that are used to treat a variety of diseases, including cancer, autoimmune disorders, and diabetes) or AI or engaged with global environmental standards in its leather manufacturing practices needs to be treated separately in terms of incentives rather than on par with other traders in low-value goods.

Infrastructural deficiencies are also important areas where Bangladesh needs to fill its gaps. The World Bank estimates that Bangladesh is losing between 7-8 per cent of its probable export value in terms of delays in ports, customs, and expensive logistics. It has become essential to opt for modernization. Automated customs and inland container depots, roads, and port management technology are essential areas where Bangladesh needs to focus on making these priorities for the country.

Finally, it is essential for Bangladesh to integrate into regional trade thoroughly. The BBIN Initiative, BIMSTEC, and BCIM corridors are massive opportunities for reducing costs and getting new markets. In addition to this, countries like South Korea, Singapore, and Indonesia are also interested in investments in sectors including energy and agriculture.

Picture this: Bangladeshi drugs are quickly distributed to Nepal, agro-processed products are delivered to India within hours, not days, and IT firms are able to work in perfect synergy with Bhutan and Sri Lanka. This is no fanciful notion but rather the reality that will soon greet our wake-up calls.

THE NEXT DECADE WILL DEFINE BANGLADESH'S ECONOMIC DESTINY: The era of single-engine growth is coming to an end. RMG will always remain a pivot for the country's exporting economy, but it must not continue to remain its only pivot. The global economy is undergoing transition, and so must Bangladesh. It is a moment in history for the country where its demography, technology, entrepreneurship, and cooperation in the region are aligning in favor of our growth trajectory.

If Bangladesh is to take advantage of this opportunity, it needs to act with boldness, with certainty, and with relentless efforts on reform. Export diversification is not just a policy or an approach it is a and a catalyst for sustained.

As Bangladesh seizes this opportunity, it has every chance to develop its own export environment, which is broader, smarter, greener, and more innovative than anything that has ever existed in this country or anywhere else in its history. The next installment in the Bangladesh growth saga must be written not by one industry but by many that are on the rise.

The day to emerge out from RMG is not in the far-off distance.It is now.

Dr Serajul I Bhuiyan is a professor of journalism and mass communications at Savannah State University, Savannah, Georgia, USA.​

 

[Saif]

Global trade moderation and Bangladesh

The calendar year 2025 is now set to enter its final month tomorrow. In other words, just a month from now, the world will see the start of another year. The annual stock-taking of global economic performance is already underway, although only relevant data for the first three quarters (January-Sep

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Global trade moderation and Bangladesh

Asjadul Kibria
Published :
Nov 29, 2025 23:12
Updated :
Nov 29, 2025 23:49

The calendar year 2025 is now set to enter its final month tomorrow. In other words, just a month from now, the world will see the start of another year. The annual stock-taking of global economic performance is already underway, although only relevant data for the first three quarters (January-September) is available. In this connection, the World Trade Organization (WTO) released the latest Goods Trade Barometer on Friday last. The barometer is a composite leading indicator for global trade that provides real-time information on the course of trade in goods relative to recent trends. Usually, the barometer predicts trade developments two to three months ahead. The latest barometer indicates a possible development of global trade in the last quarter of the current year.

The key message of the latest WTO Goods Trade Barometer is that global goods trade growth is set to moderate in the last quarter, leading to slower growth in the last half of the year. The surge in global trade in the first half was mainly driven by frontloading of imports ahead of expected tariff hikes and by rising demand for AI-related products, according to the barometer index analysis. The overall barometer index fell to 101.8 in September, down from 102.2 in June and below the quarterly trade volume index, which reflects actual merchandise trade developments.

There are six component indices of the barometer, and all are above their standard baseline value of 100 except for the agricultural raw materials index (98.0), which has been in contraction since the start of the year.

The indices for air freight (102.7) and container shipping (101.7) remain above trend. Nevertheless, these two indices have declined over the last three months, indicating a slowdown in global goods transportation. In other words, trade volume is likely to go through a downtrend in the coming days. The WTO last month predicted that merchandise trade, in terms of volume, may register 2.4 per cent growth in 2025 and 0.5 per cent in 2026. The slower growth projection is driven by higher tariffs and trade policy uncertainty in the second half of 2025 and in 2026.

The indices for automotive products (103.0) and electronic components (102.0) remained constant over the same period. It also indicates moderate growth prospects. Finally, the new export orders index (102.3) surpassed the baseline value of 100 in the second quarter, after some volatility at the end of 2024 and the start of 2025.

So, the overall reading of the indices suggests a moderation in global merchandise trade growth this year.

Earlier last month, the UN Trade and Development (UNCTAD) in its global trade update showed that the world trade expanded by about $500 billion in the first half of 2025, despite volatility, policy shifts and persistent geopolitical tensions. "Momentum remained strong into the third quarter, even as growth patterns varied across regions and sectors," it added.

UNCTAD also said that the trade growth continued in the third quarter, with goods expected to expand by about 2.5 per cent quarter over quarter and services accelerating sharply to around 4 per cent. As full data for the third quarter trade were not available at the time of releasing the UNCTAD update, the UN organisation issued a nowcast, a forecast of what is immediately expected, for the third quarter. It also said that barring major adverse shocks in the final months of 2025, global trade is projected to surpass its 2024 record levels. Last year, the value of global merchandise trade stood at US$24.5 trillion, posting modest growth of 2 per cent over 2023.

UNCTAD was of the view that despite turbulence from shifting US trade policy, global trade dynamics have so far shown limited disruption. However, uncertainty over future policy remains a key risk. "Geopolitical instability also continues to weigh on trade, with persistent conflicts that could further disrupt regional dynamics and heighten concerns over energy and food security," it added in its October update report.

The moderation of the global trade in goods will also impact countries like Bangladesh as their exports are dependent on the movement of the global market. Already, the country's trade in goods registered a modest 2 per cent growth in the first nine months of the current year over the previous year. Statistics available with Bangladesh Bank showed that total trade in the January-September period of 2025 stood at $82.79 billion, which was $81.14 billion in the same period of 2024.

The official statistics also showed that merchandise exports of the country increased by 4.74 per cent in the first nine months of the current year, whereas the imports remained almost the same, reflecting weak domestic demand.

As the country enters the election-centric political business cycle, weak domestic demand will persist for a couple of months before and after the election in February of the next year. While the import is correlated with domestic demand, the export is linked to the international market, which has already become somewhat volatile due to Trump's tariff policy.

The US President initially imposed a 35 per cent reciprocal tariff on Bangladesh, which later fell to 20 per cent after hectic negotiations with several commercial offers to the US. The new tariff rate comes into effect in August, and the primary impact will be visible by the end of the year.

As China is the leading trade partner, mainly because it is the largest source of imports in Bangladesh, despite a decline in domestic demand, total imports from China will post moderate growth by the end of the year.

Overall, Bangladesh is going to witness a year of sluggish trade in goods which will have some negative impact on the growth of country's gross domestic product (GDP).​

 

[Saif]

Beyond apparel: How Bangladesh can develop new exports

Bangladesh's economic diversification has remained a goal rather than an outcome for decades.

www.thedailystar.net

Beyond apparel: How Bangladesh can develop new exports

A key to diversifying Bangladesh's export basket lies in replicating the success of the apparel industry. FILE VISUAL: SHAIKH SULTANA JAHAN BADHON

Bangladesh urgently needs to diversify its economy. The country has a limited ability to produce and export sophisticated goods. It ranks low (128th out of 145 countries) on the Economic Complexity Index, which measures the diversity of a country's exports. Except for some petroleum-based economies, the country is one of the most narrowly concentrated economies in Asia. Exports remain largely focused on the apparel sector, which constitutes over 80 percent of exports. The apparel industry earns $40 billion in exports, while no other sector brings in more than $1 billion in an economy worth nearly half a trillion dollars.

Historically, Bangladesh has shown its ability to diversify its export base. In the late 1970s, goods made from jute fibre accounted for around 70 percent of total merchandise exports when the apparel industry's share was less than four percent. The share of the apparel industry increased to 75 percent in the early 2000s, a remarkable feat in transforming an agrarian economy towards a labour-intensive, export-oriented manufacturing country. This success led to export concentration in the apparel sector.

The rise of the apparel industry reduced the share of traditional exports like jute and leather, which have stagnated at around one billion dollars for decades. With over 85 percent of the labour force in informal jobs, Bangladesh needs job-centric and export-driven manufacturing growth to diversify its economy and create more formal employment.

A key to diversifying Bangladesh's export basket lies in replicating the success of the apparel industry. Partnerships were crucial to the apparel sector's stellar success. In the late 1970s, a Bangladeshi apparel manufacturing company, Desh Garments, created a joint venture with the Republic of Korea's Daewoo Corporation, combining local cheap and trainable labour with its foreign counterpart's technological expertise and market access. More than one hundred Bangladeshi technical staff were trained at Daewoo's factory for six months, enabling the transfer of essential technical expertise and contributing to the development of the apparel sector. Some of these workers later became entrepreneurs.

To be a major player in chip manufacturing, the Indian conglomerate Tata is sending hundreds of staff overseas to its technical partner for training in semiconductor fabrication. Training and technology transfer occur most efficiently and effectively when both parties in a partnership have a shared business interest. Partnerships—government-government, private-private, or public-private—are vital for sector development in developing economies.

For instance, Chile was historically known as a copper exporter. Its transformation into a global seafood exporter, thanks to the Japan-Chile Salmon Project, is an example of a successful partnership. This project transferred advanced aquaculture technologies and provided crucial market access, with public-private partnerships making the knowledge widely available.

To bring economic diversification to fruition, Bangladesh's government and development partners can focus on developing partnerships based on sound economics and honest intentions. This is a crucial element in the country's diversification efforts. Bangladesh's world-class non-governmental organisations can unite communities, disseminate technologies, and train the workforce. This is a unique advantage for Bangladesh which is not currently used in the economic diversification initiatives.

Governments and their development partners often work with many industries at once to address shared policy or regulatory challenges. While this broad approach has benefits, it can make it harder to scale up emerging industries. Focusing resources on a few key sectors, backed by a long-term plan with clear goals, is usually more effective.

Development finance institutions can assist. They have experience in developing partnerships by managing geopolitical challenges, ensuring equitable returns, supporting public-private cooperation, and above all, supporting economic benefits. They should focus on one sector at a time, providing comprehensive support across the value chain to mobilise investments and achieve measurable export goals.

The country needs to diversify into new sectors and simultaneously strengthen the apparel industry through innovative products and access to new markets. With approximately five percent of global export share, Bangladesh's apparel industry continues to present growth opportunities. The country can diversify its economy by replicating the apparel industry's successful model of international partnerships, technical training, and targeted long-term planning.

Bangladesh's economic diversification has remained a goal rather than an outcome for decades. A focused approach built on transparent partnerships and targeted industrial development can convert these long-discussed possibilities into real progress. International partnerships, targeted training, and long-term planning offer a practical path to developing new industries and expanding the country's economic base.

Bidyut Kumar Saha is lead investment officer at ADB Bangladesh Resident Mission.

Chandan Sapkota is public management economist at ADB Sectors Department.​

 

[Saif]

https://thefinancialexpress.com.bd/economy/bangladesh/remittances-cross-13-billion-in-first-5-months-of-fiscal

Remittances cross $13 billion in first 5 months of fiscal

Published :
Dec 01, 2025 21:00
Updated :
Dec 01, 2025 21:00

Bangladesh received its highest monthly remittance inflow of the current fiscal year FY 2025-26, crossing US $2.88 billion November.

This substantial inflow translates to an average daily remittance of approximately $96.3 million. In the five month of the current fiscal year Bangladeshi expatriates sent $13.03 billion remittance while it was $11.7 billion in the previous fiscal year, UNB reports.

According to updated data released by the Bangladesh Bank on Monday, the remittance flow in November saw a significant increase of 31.37 percent compared to the previous month of October.

The total remittance figure for November stands at $2.88. Of this amount, state-owned banks received $587.76 million as remittance, specialized banks handled $298.95 million, and the largest share, around $2.0 billion, came through private banks. Foreign banks accounted for the remaining $5.94 million.

The central bank also provided a weekly breakdown, showing consistent high flow throughout the month, with the largest weekly amount of $768.48 million arriving between November 9 and 15, and the smallest being $43.18 million on November 1st.

The November figure significantly surpasses the inflows of the preceding months of the current fiscal year: October saw $2.56 billion, September recorded $2.68 billion, while August and July inflows were $2.42 billion and $2.47 billion, respectively.

This robust performance follows the record-breaking remittance year of FY2024-25, where expatriates sent $30.32 billion, marking the highest annual inflow in the country's history so far.​

 

[Saif]

Striking a balance between growth and job creation

Over the past one and a half decades, the term Gross Domestic Product or GDP became synonymous with development and the state-owned statistical agency and other official documents would occasionally come up with various data showing how the economy was on an ever-rising growth trajectory. Obviously

thefinancialexpress.com.bd

Striking a balance between growth and job creation

Published :
Dec 02, 2025 22:19
Updated :
Dec 02, 2025 22:19

Over the past one and a half decades, the term Gross Domestic Product or GDP became synonymous with development and the state-owned statistical agency and other official documents would occasionally come up with various data showing how the economy was on an ever-rising growth trajectory. Obviously, those were projected as the measure of the nation's development. Even the international development partners were convinced of those growth narratives and would praise the then-government for its success story of economic growth. Against this backdrop, economists have of late been coming up with research data that are unravelling the mismatch between growth, for instance, in the manufacturing sector and the rising rate of unemployment. Presented at a recently held discussion event styled "Beyond Jobless Growth: Towards an Employment-Centred Policy Framework for Bangladesh Through a Post-Neoliberal Lens", some study findings showed that the manufacturing sector despite recording an impressive annual rate of growth at around 10 per cent between 2013 and 2023, had shed 1.4 million jobs during that period. How can one explain this glaring mismatch between growth and unemployment at the same time?

It was found that in the export-oriented garment industry, fewer workers produced more value in terms of export earnings than before. In 2013, for instance, the industry required 220 workers to produce goods worth US$1.0 million in terms of export earnings. However, a decade later in 2024, the same amount of goods and matching export earnings could be generated by 94 workers. That was definitely good news for the investors who achieved such success through adoption of modern technology that increased productivity of the industry manifold, but at a cost. While one cannot deny the industry's higher level of productivity and earnings that go with it, but at the same time it creates a fresh crisis for the policymakers resulting from the massive job cuts. How can these dichotomous developments in the macro-economy be reconciled? Growth is no doubt a priority before the investors in the manufacturing industries such as the export-driven ones, but the question that would also arise at the same time is, growth for whom? And this issue is especially problematic for a country where about 3.0 million people are entering the job market annually. So, creating jobs for the fresh millions joining the workforce every year should be the topmost priority before the government as well as the development thinkers.

Unsurprisingly, some experts at the said discussion event blamed the deepening employment crisis on what they termed disproportionate focus on a single industrial sector, namely, the Readymade Garment (RMG). This, no doubt, created an imbalance affecting the rest of the economy. For when the RMG-led manufacturing has been experiencing significant rise in terms of growth, the agriculture that absorbs the overwhelming proportion of the growing workforce went through a decline as its contribution to the GDP fell markedly from its previous level. This calls for incentivising more agro-based industries including the start-ups in the sector. That may help reduce the job loss on a massive scale like the manufacturing sector suffered over the last one decade.

Overall, it is time for a rethink on the part of both the government and the economic expert about getting the priorities for growth and employment right. While the economists are rightly blaming government policies and explaining the existing economic realities through different terminologies such as 'triangle of vicious cycles' and so on, the real challenge would be to come up with the correct guidelines for the policymakers and the businesses to follow. It goes without saying that the right model for the economic growth should be the one that creates more jobs and ensures growth at the same time.​

 

[Saif]

Has our ADP governance gone backwards?

In this context of heightened public expectation, it is important to recall how the ADP evolved under the previous government.

www.thedailystar.net

Has our ADP governance gone backwards?

VISUAL: ANWAR SOHEL

Fifteen months have passed since the interim government assumed office, bringing celebrated development thinkers and outspoken reformers into the cabinet. Their inclusion raised hopes among citizens and development activists that the long-standing weaknesses of the annual development programmes (ADPs), the central mechanism through which the nation's development agenda is operationalised, would finally be addressed or at least meaningfully initiated. The absence of party-driven pressures and the strong record of many advisers in advocating for efficient public spending further amplified these expectations. As the tenure of this interim administration draws to a close, a pressing question emerges. Have these vibrant reformers strengthened the ADPs in any meaningful way, or have they simply allowed long-standing failures to continue under a new banner?

In this context of heightened public expectation, it is important to recall how the ADP evolved under the previous government. During their sixteen years in office, the allocation expanded dramatically, rising from Tk 25,600 crore in fiscal year (FY) 2009 to ten times that size at Tk 2,63,000 crore in FY24, a scale that signalled the country's steady economic progress. Implementation performance was also notable, reaching a high of 94.66 percent in FY19 and falling to 80.18 percent in FY20, a year heavily affected by the Covid-19 disruption. This period contributed to broader gains in growth and development, and the World Bank recognised Bangladesh as one of the fastest-growing economies in the world. At the same time, the government also faced legitimate criticisms about faulty feasibility studies, last-minute spending surges and governance gaps that often undermined project quality.

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Given this trajectory, the interim government entered office with ample scope to strengthen the ADPs and address longstanding weaknesses in development management. It inherited the ADPs for FY25 and revised the fund to Tk 2,26,125 crore after an 18 percent cut, and it also designed a fresh ADP of Tk 2,30,000 crore for FY26. Yet, these opportunities did not translate into meaningful progress. ADP implementation fell to a historic low of 67.85 percent in FY25 and reached only eight percent in the first four months of FY25-26. In this backdrop, it becomes essential to review recent patterns of development spending and determine how far the interim government has delivered in the priority sectors of health, education and power and energy, given their central role in socio-economic development.

A closer look at the health sector presents one of the clearest illustrations of the interim government's shortcomings. In FY25, the sector's allocation was cut by 50 percent from the original budget despite being classified as a priority area, and by year's end, the Health Services Division delivered an implementation rate of only 21.74 percent, among the lowest of all ministries. Early FY26 indications show the situation deteriorating further. In the first quarter, the Medical Education and Family Welfare Division spent just 0.003 percent of its Tk 4,809 crore allocation, while the Health Services Division managed to spend only 1.13 percent of its Tk 7,484 crore allocation. These trends reveal a sector where financial cuts, administrative inertia and weak coordination came together to halt progress, leaving essential projects without direction and the broader health system without the capacity to respond to national needs.

Turning to education, the sector has consistently been allocated around 11-12 percent of the total ADP, well below the Unesco recommendation of 15-20 percent of total public expenditure. Yet, even with a steady share, utilisation has weakened over time, with spending declining from 102 percent in FY10 to 79 percent in FY24. Under the interim administration, the situation has worsened. In FY25, education began with 11.36 percent of the total ADP, but the revised allocation imposed a sharp 34 percent cut. For FY26, the education ADP stands at about 12.1 percent of the total, still below the global standard and insufficient for meaningful reforms. Implementation has been weak as well. In FY25, the Ministry of Primary and Mass Education spent only 58 percent of its development allocation, placing it among the five lowest-performing ministries. In the first quarter of FY26, spending reached only 4.25 percent for primary and mass education and only 6.52 percent for secondary and higher education. Taken together, these figures expose a sector where investment levels remain inadequate and administrative capacity remains limited, resulting in a widening gap between policy ambition and actual learning outcomes.

When the interim government took office, the power and energy sector already held a central place in the national development agenda, with ADP allocations supporting major gains, including universal household electrification. The sector has also demonstrated strong execution with the Power Division implementing 101 percent of its revised fund in FY24, an exceptional outcome in public investment. During the interim period, however, the sector has clearly lost momentum. Although allocations remain substantial, project delivery has slowed, and strategic reform has stalled. In FY25, the Energy and Mineral Resources Division recorded 85.95 percent implementation, a respectable figure but significantly lower than earlier performance. The spending pattern has also shifted. Allocation for power generation projects fell by six percent from the previous year's revised ADP, while transmission and distribution claimed larger shares. Analysts warn that this shift again prioritises visible infrastructure over deeper issues such as subsidy pressure, fuel cost volatility and persistent system losses. In effect, the interim government has maintained large budgets but failed to set a coherent reform plan, leaving the sector without measurable gains in efficiency, financial stability or service quality.

Across these sectors, the evidence shows that development governance has not only weakened under the interim government but has moved in reverse, falling far short of the public expectations it sought to embody. Instead of strengthening the foundations of the development system, it has overseen collapsing implementation, drifting priorities and a clear distance between stated intentions and actual outcomes. What began with the hope that experienced reformers would correct long-standing weaknesses has ended with a development machinery more fragile, uncertain, and less capable than the one they inherited, raising serious questions about the cost of this transitional period for the country's development trajectory.

Muhammad Muktadirul Islam Khan is country researcher and head of consultants at Sustainability Action Learning Lab.​

 

[Saif]

For Bangladesh, a weak WTO is not an option

Bangladesh owes much of its economic rise to the predictability and stability of global trade rules. For decades, the World Trade Organization (WTO) provided exactly that: a system where a young, export-driven country could trust that its garments, pharmaceuticals, and services would be traded on t

thefinancialexpress.com.bd

For Bangladesh, a weak WTO is not an option
M G Quibria

Published :
Dec 03, 2025 22:12
Updated :
Dec 03, 2025 22:27

The headquarters of WTO in Geneva, Switzerland— Reuters file photo

Bangladesh owes much of its economic rise to the predictability and stability of global trade rules. For decades, the World Trade Organization (WTO) provided exactly that: a system where a young, export-driven country could trust that its garments, pharmaceuticals, and services would be traded on terms no single power could unilaterally rewrite. That foundation is now cracking. And for countries like Bangladesh—whose future depends on a fair, open global marketplace—the consequences could be profound.

The WTO Is Drifting: The truth is uncomfortable: the WTO is drifting toward irrelevance. The institution built to govern global trade is increasingly unable to deliver on its most basic promises—not because the world no longer needs multilateralism, but because the WTO’s own structures have grown brittle.

Consensus Has Become a Cage. At the heart of the problem is the way the WTO makes decisions. Consensus, once a symbol of equality, now functions as a veto for any member willing to wield it. When General Agreement on Tariffs and Trade (GATT) had 23 members, unanimity was difficult. With 166, it is nearly impossible. A single dissent can halt the appointment of judges, block negotiations, or stall incremental reforms.

The result is paralysis. Countries frustrated by gridlock now gravitate toward regional trade blocs or informal groupings where deals can be struck more quickly. Efficiency has migrated outward, and the center has been left hollow.

For a country like Bangladesh, without the geopolitical heft to shape these exclusive clubs, that drift is worrisome.

Negotiations Are No Longer Negotiations. The collapse of the Doha Round marked a turning point. Since then, the WTO has not produced meaningful liberalisation. The ‘single undertaking’ principle—nothing agreed unless everything is agreed—proved incompatible with a diverse membership divided over agriculture, subsidies, and services.

The negotiating forum has evolved into a theater of speeches rather than a venue for compromise. The organisation that once expanded global trade now struggles simply to keep pace with it.

A Court Without Judges Cannot Uphold the Law. Perhaps the most visible symbol of the WTO’s decline is the breakdown of its dispute-settlement system. Because the United States blocked new appointments to the Appellate Body, the very mechanism responsible for enforcing trade rules has been suspended.

Members have resorted to improvised alternatives like the EU-led Multi-Party Interim Appeal Arbitration Arrangement (MPIA). But a patchwork is not a system. Without credible enforcement, compliance becomes voluntary—and in trade, voluntary rules are no rules at all.

Bangladesh’s exporters, who depend on stable dispute resolution, face a world where outcomes may hinge less on law and more on leverage.

A Rulebook Frozen in Time. The WTO’s legal framework still imagines a world of manufactured goods, tariffs, and quotas. But today’s global economy is defined by data flows, artificial intelligence, cross-border digital services, and climate-linked trade measures like carbon border adjustments. On these issues, the WTO is nearly silent.
This silence encourages unilateralism. Countries legislate individually, set their own standards, and negotiate regional agreements that often exclude or disadvantage developing nations. Without a modern rulebook, the global economy becomes a patchwork of incompatible regimes.

Bangladesh, entering middle-income status and aiming to expand beyond garments, needs rules—not vacuums.

A Crisis of Trust. The institutional stagnation is compounded by a legitimacy problem. In the global South, the WTO is often viewed as serving powerful nations. In advanced economies, it is blamed for inequality and job displacement. Both narratives feed nationalism and erode support for multilateralism.

Yet the alternative is worse: a world where trade norms are written by a handful of powerful actors and imposed on everyone else.

Reform Proposals — Paths Forward or New Divides: Many are offering ideas—some promising, some perilous.

Michael Froman’s ‘open plurilateralism’ would allow coalitions of willing countries to move forward on issues such as digital trade or supply-chain security. It is pragmatic, but risks leaving developing countries on the sidelines, unable to meet high regulatory standards and locked out of new rulemaking.

Emily Kilcrease and Geoffrey Gertz’s ‘concentric circles’ model would formalise a U.S.-anchored hierarchy: an inner circle of allies, a middle circle of neutral partners, and an outer circle of strategic competitors. The model moves away from the WTO principle of ‘Most Favored Nation (MFN) treatment, which requires countries to treat all trade partners equally. This approach may appeal to Washington, but it institutionalises exclusion. For countries outside the inner ring, including many in the South, it would reinforce the feeling of being perpetual outsiders to the global economy.

Lee Hsien Loong’s ‘World minus one’ approach offers a more constructive vision: don’t let one spoiler paralyse the system. If a major power refuses to join, let the rest press ahead. Mega-regional agreements like Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) already reflect this logic.

Anne Krueger goes further. If the WTO cannot reform itself, she suggests a coalition of reform-minded countries build a new organisation grounded in the WTO’s original Articles—essentially a controlled institutional reboot.

Meanwhile, within the WTO, members push disparate agendas that include the following: India defends policy space and digital sovereignty; South Africa seeks equitable TRIPS reforms; China demands clearer subsidy rules while protecting its state-led model; and the European Union wants (EU) climate-aligned trade and a double-majority voting system to replace the consensus rule.

Diverse as they are, these proposals share one theme: the system must balance efficiency with legitimacy. Fast decisions mean little if half the world sees them as exclusionary; inclusive processes mean little if they produce no outcomes.

What the WTO Must Do to Survive: A viable reform agenda rests on three pillars: First, rebuild dispute settlement with a depoliticised appellate mechanism. The WTO cannot function without neutral, credible enforcement. Second, modernise the rulebook. Digital trade, data governance, carbon border adjustments, and AI-driven commerce must move from the periphery to the core. Third, elevate developing-country capacity. Participation must be substantive, not ceremonial. Without support, the rules will reflect only the interests of the technologically advanced.

This is not idealism. It is the pragmatic foundation of a stable global trading order.
The Stakes for Bangladesh—and Beyond: For Bangladesh, WTO reform is not an abstract debate among diplomats. It is a question of economic destiny. As the country navigates Least Developed Country (LDC) graduation, diversifies its exports, and confronts new barriers—from carbon tariffs to digital standards—it needs a global system that is predictable, fair, and inclusive.

The WTO was built to offer precisely that. But unless it adapts, it will not be able to. And if the WTO fails, Bangladesh will not find refuge in exclusive trade clubs or geopolitical ‘circles.’ It will face a world where power, not rules, determines market access.

A young, aspiring nation needs a global trading system that gives it space to rise. The world needs that system too.

The question is whether governments and the WTO itself can summon the imagination to rebuild the multilateral order before countries like Bangladesh are left navigating a world without one.

Dr M.G. Quibria is an economist whose career bridges international development and academia. He is currently a Distinguished Fellow at the Policy Research Institute of Bangladesh (PRI) and has held senior leadership positions at both the Asian Development Bank and the Asian Development Bank​

 

[Saif]

Bangladesh's economic policy not dictated by IMF or WB: BB Governor

Bangladesh Bank Governor Dr Ahsan H Mansur on Thursday said the country's economic policy is independently formulated and not dictated by the International Monetary Fund (IMF) or the World Bank. "If we follow their prescriptions blindly, the exchange rate could surge to around Tk 170-180 per US do

thefinancialexpress.com.bd

Bangladesh's economic policy not dictated by IMF or WB: BB Governor

UNB
Published :
Dec 04, 2025 17:17
Updated :
Dec 04, 2025 17:17

Bangladesh Bank Governor Dr Ahsan H Mansur on Thursday said the country's economic policy is independently formulated and not dictated by the International Monetary Fund (IMF) or the World Bank.

"If we follow their prescriptions blindly, the exchange rate could surge to around Tk 170-180 per US dollar, as has happened in Pakistan and Sri Lanka," he said.

The governor made the remarks while speaking as the special guest at the 'Investment Dialogue with Local Partners' held at the multipurpose hall of the Bangladesh Investment Development Authority (BIDA) on Thursday.

Energy Adviser Muhammad Fouzul Kabir Khan was also present at the programme.

Dr Mansur said inflation is expected to fall to 5 per cent by the end of the current fiscal year, FY2025-26. Consequently, the policy rate would likely be reduced to 8-9 per cent, with lending rates settling between 10 and 11 per cent.

He cautioned that reducing interest rates without controlling inflation could destabilise the exchange rate and the money market, responding to businesses' demands for lower lending rates.

Citing examples from India and China, the governor noted that their low interest rates-3 per cent and zero per cent, respectively-reflect their economic conditions, which differ from Bangladesh's.

"We are not currently taking IMF loan instalments because some conditions cannot be fulfilled at this time for the sake of our economy. When needed, we will take IMF loans after fully meeting the global lender's conditions," he added.

About the financial sector, Dr. Mansur said it has now emerged from previous data manipulations that had posed serious risks to the country.

For instance, while official figures under the previous regime showed single-digit inflation, actual inflation was around 12-13 per cent, with lending rates in single digits, leaving depositors with negative returns. Similarly, defaulted loans were underreported, shown below double digits, though they stood at around 35 per cent in September 2025. Current accounts have now been corrected.

On the question of recovering defaulted loans through the sale of industry assets, the governor clarified that industries should not be penalised for individual mismanagement.

He cited the example of the SS power plant of S. Alam Group, which continues to operate with support from Bangladesh Bank for LC openings.

The project involves about US $2.5 billion in investment, 80 per cent of which is foreign-owned. Although the plant is running, S. Alam will not retain any profit, as all funds will be used to repay liabilities, he added.

Dr Mansur pointed out that the Bangladesh Bank has received 1,300 applications for loan restructuring, approving 250 of them. The remaining applications have been forwarded to respective banks for customer- and client-based restructuring.

He projected that defaulted loans will decrease by 5 per cent by March FY2025-26, but bringing overall non-performing loans to a reasonable level may take 8-10 years.

Lutfey Siddiqi, Special Envoy of the Chief Adviser on International Affairs, and Mohammad Abdur Rahman Khan, FCNA, Chairman of NBR, participated in the dialogue, held by Chowdhury Ashik Mahmud Bin Harun, Executive Chairman of BEZA and BIDA, in the chair.​

 

[Saif]

Remittance inflow exceeds $632 million in first six days of December

The upward trend in remittances sent by expatriate Bangladeshis has continued into December, with the country receiving approximately US $632 million in the first six days of the month. According to the latest update from Bangladesh Bank (BB), the $632 million remittance figure for December 1-6 is

thefinancialexpress.com.bd

Remittance inflow exceeds $632 million in first six days of December

UNB
Published :
Dec 07, 2025 23:04
Updated :
Dec 07, 2025 23:04

The upward trend in remittances sent by expatriate Bangladeshis has continued into December, with the country receiving approximately US $632 million in the first six days of the month.

According to the latest update from Bangladesh Bank (BB), the $632 million remittance figure for December 1-6 is an increase of approximately $38 million compared to the same period last year. In December of the previous year (2024), the country received around $594 million in the first six days.

The growth is attributed to several factors, including incentives offered for sending money through legal banking channels, increased encouragement for using the formal system, and the active role of exchange houses.

Remittance inflow has shown robust growth throughout the current fiscal year (FY 2025-26). From July 1 to December 6, 2025, the total remittance inflow reached $13.67 billion. This represents an increase of $1.939 billion compared to the same period in the previous fiscal year (FY 2024-25), when the total stood at $11.732 billion. The year-on-year growth rate for the fiscal year to date is 16.5 percent.​

 

[Saif]

The headwinds export sector faces

Bangladesh's export sector has of late been facing headwinds mainly from the dual impact of the fall in demand in the international market and the reciprocal tariff imposed by the USA. According to the Export Promotion Bureau (EPB), last November Bangladesh exported merchandise worth US$3.89

thefinancialexpress.com.bd

The headwinds export sector faces

SYED FATTAHUL ALIM
Published :
Dec 07, 2025 22:28
Updated :
Dec 07, 2025 22:33

Bangladesh's export sector has of late been facing headwinds mainly from the dual impact of the fall in demand in the international market and the reciprocal tariff imposed by the USA. According to the Export Promotion Bureau (EPB), last November Bangladesh exported merchandise worth US$3.89 billion. This is less than what the country exported in the same month last year by 5.54 per cent, the earning from exports was worth US$4.11 billion. Garments as usual is obviously the most exposed to any negative development in the world market. So, by earning about US$3.14 billion in November, the largest share of last month's fall in merchandise export was also borne by this sector (at 4.8 per cent) since in the same month last year, the apparel sector fetched US$3.30 billion.

However, a single month's poor performance may not be enough argument to say that the country's export is performing badly. But a similar trend of fall in exports compared to the previous year has been demonstrated during the past three months, too. Even making allowances for the disruptions in business activities caused in the wake of the July uprising of 2024, the development is still concerning. If Bangladesh's graduation takes place as scheduled in November next year (2026), the export sector is going to come up against the challenges of a highly competitive market as it would then be bereft of the preferential treatments it so far received from the major export destinations like the European markets. So, as the proverbial early bird catches the worm, so the preparations should be afoot to meet the upcoming post-graduation challenges for export. But to engage in future challenges, the issues that are urgent need to be addressed first. For the export figures presented in the foregoing do not merely reflect statistical fluctuations but a fundamental weakness in our export strategy. As is often discussed, the root cause of this weakness lies in the lack of export diversification. And the problem is that the ready-made garments (RMG) dominate the export basket taking an overwhelming share of 84.7 per cent of total exports. So, Bangladesh fell behind as it did not invest early enough in what the global market was clearly signalling-- man made fibre (MMF) and technical textiles over cotton basics, backward linkages in synthetics, quick turn design and product development and parallel bets on non textile value chains such as electronics and medical devices that peers cultivated a decade ago.

The result is a revenue ceiling, when fashion downgrades to value lines during global slowdowns. A country concentrated in basics absorbs the price hit, while diversified competitors cross subsidize with higher margin categories that buyers cannot easily bargain down. Leather and footwear should be first in line with modern effluent treatment across the Savar tannery estate, traceability systems and design support. Bangladesh can develop branded original equipment manufacturer (OEM) footwear and leather goods where per pair realizations exceed basic apparel. Incentives should reward environmental compliance, LWG certification and higher local value addition in accessories.

Agro processing is another natural winner. The country already exports processed foods to scores of markets, but Sanitary and Phytosanitary Standards (SPS) compliance, cold chain logistics and packaging finance are chronic bottlenecks. A ring fenced incentive for Hazard Analysis Critical Control Points /Brand Reputation Compliance Global Standards, formerly British Retail Consortium (HACCP/BRC) certification, zero interest loans for cold storage, and faster testing at accredited labs would unlock scale.

Pharmaceuticals have a strong domestic base and growing exports. What holds back the next step is regulatory recognition and approvals.

While neighboring countries invested in developing technological capabilities and high-value manufacturing, Bangladesh remained complacent with its garment-centric model. The absence of forward-looking industrial policies has left the country unprepared for shifting global demand patterns and vulnerable to sector-specific downturns. The government's export incentive structure further compounds this problem by reinforcing existing imbalances. Of the Tk 7,500 crore allocated for export incentives in FY2023-24, approximately 65 per cent went to the already-dominant garment sector. Meanwhile, emerging sectors with significant growth potential received disproportionately small allocations despite their need for support to achieve competitive scale.

This misallocation represents a missed opportunity to nurture promising sectors that could diversify our export base. The pharmaceutical industry, for instance, has demonstrated remarkable potential, growing at 15.6 per cent annually with exports reaching US$188 million in 2023. With appropriate incentives, industry experts project this figure could exceed US$1.0 billion by 2030. Similarly, the ICT sector, which currently contributes just US$1.3 billion in exports, has the capacity to reach US$ 5.0 billion within five years if given proper policy support.

Light engineering products represent another untapped opportunity. Countries like Taiwan and South Korea transformed their economies by focusing on this sector, yet Bangladesh's light engineering exports remain below US$500 million annually despite a skilled workforce and growing domestic capabilities. Redirecting even 20 per cent of current garment incentives towards these sectors could catalyse exponential growth and create a more resilient export economy.

Individual success stories demonstrate what becomes possible when innovation receives proper support. Kazi IT Center, starting as a small software development firm, now exports specialised healthcare management systems to seven countries, generating US$12 million annually. Similarly, Dhaka-based Bengal Plastic has successfully penetrated high-value European markets with specialised industrial components, commanding prices comparable to Chinese competitors.

These examples illustrate that Bangladesh can compete globally in diverse sectors when entrepreneurs receive adequate support and policy backing. The path forward requires a fundamental rethinking of our export strategy-one that balances continued support for established sectors while aggressively developing new export capabilities.

For Bangladesh to reverse its declining export revenue, policymakers must implement a balanced incentive structure that nurtures emerging sectors, invest in skills development beyond traditional manufacturing, and establish specialized export promotion agencies for high-potential industries. Without these changes, the country risks watching its hard-earned export gains continue to erode in an increasingly competitive global marketplace.

The choice before Bangladesh is clear: continue down the path of dangerous concentration or embrace the challenging but necessary work of diversification. Our economic future depends on making the right decision.​

 

[Saif]

Finding cure to jobless growth

Bangladesh has entered a phase of development marked by jobless growth. Is it a short-term phenomenon that will somehow disappear or a systematic outcome of following the wrong development thesis? According to a recent report, while Bangladesh's productive sector experienced an impressive average a

thefinancialexpress.com.bd

Finding cure to jobless growth

M Rokonuzzaman
Published :
Dec 09, 2025 00:43
Updated :
Dec 09, 2025 00:44

Bangladesh has entered a phase of development marked by jobless growth. Is it a short-term phenomenon that will somehow disappear or a systematic outcome of following the wrong development thesis? According to a recent report, while Bangladesh's productive sector experienced an impressive average annual growth rate of 10 per cent over the decade spanning 2013-2023, the manufacturing sector lost 1.4 million jobs during this period. Due to the adoption of increasingly advanced imported technologies, there has been a decrease in labour-based value-added production. For example, in contrast to the 220 workers needed to produce $1 million in exports in 2013, garment factories needed only 94 workers in 2024. Of course, it has increased labour productivity. But it has happened due to the import of technology. Hence, the benefit of productivity improvement migrated out of Bangladesh. More alarming is that this trend will continue, as technological advancements have been improving the quality and reducing the cost of whatever Bangladesh produces. Such a reality raises a vital question: has Bangladesh been following the wrong development thesis, and how can it exit from it?

There has been a call for striking a balance between growth and job creation. But if Bangladesh continues to follow incorrect economic theories, how can that balance be maintained? On the other hand, as media report indicates, some expert groups have been blaming government policies. Well, how does the government make policies, and who has been advising the government to take those policies? If a wrong thesis guides the policy advisors, should the government continue to seek policy advice from them to find a remedy for jobless growth?

At the core of development thinking, particularly for Bangladesh's industrial economy, there has been a labour-centric replication strategy. It's guided by a neoclassical production function linking economic output to labour, capital, and total factor productivity. There has also been a common belief that labour productivity improvement benefits labour suppliers. Hence, the focus has been on liberalising technology imports (capital) and offering training to factory workers to operate them. As a result, economic output has increased, along with improvements in labour productivity. Unfortunately, the benefit of labour productivity improvement did not benefit Bangladesh. Instead, the country has lost precious jobs.

There has also been an argument that an excessive focus on a single sector, primarily RMG, has left other industries underdeveloped. For this reason, such a reality of jobloss and growth has emerged. If Bangladesh continues to follow a technology-import-led replication economy, will the job reality change due to expansion in other sectors? Unfortunately, theory and data suggest that this is not the case. Regardless of the industry, technological advancements have a natural tendency to reduce labour in copying and using products. Unfortunately, it has not been factored into the development thesis prescribed for Bangladesh.

Experts appear to believe that a credible election, genuine political representation, the establishment of people-centred governance, and a renewed social contract between the state and citizens will help reverse the reality of job loss. Unfortunately, such a change will likely have very little implication on the underlying primary reason affecting the job market.

There could be an argument that a focus on agriculture may reverse the trend. Unfortunately, it will not likely happen. Further growth in the agricultural sector requires far less labour and more technology. For example, the use of precision dispensing of farming inputs, such as pesticides and fertilisers, involves replacing labour on the ground with flying intelligent spraying machines. If the policy is to import those machines, like in manufacturing, the farming sector will also experience the same jobless growth reality.

There has also been an issue of graduate unemployment. Invariably, all studies have indicated that Bangladesh has experienced exponential growth in the production of graduates. As a result, along with the shrinking salary difference between primary school dropouts and university graduates, there has been a rapid growth in graduate unemployment, reaching as high as fifty per cent.This is the unfortunate outcome of Bangladesh's policy of pursuing a technology-import-centric, labour-intensive replication economy, and the belief that there has been a positive correlation between human capital supply and total factor productivity as an exogenous factor.

To get further clarity about the wrong development thesis that is being implemented by borrowing billions, resulting in showing GDP numbers as a success indicator, asking for tax-to-GDP ratio growth, making a few people rich, killing existing jobs, and turning millions of graduates unemployed, we need to go back to the basics of wealth creation. Economic prosperity does not depend solely on the number of units we produce. Most importantly, it depends on how much value we add in each of those produced units. Unfortunately, this value-added aspect is missing from the prescription given to Bangladesh.

In every product, whether it is a shirt, a shoe, or furniture, the role of material and labour in total value has been declining. On the other hand, ideas or technologies in the form of product or process features have been increasing. Unfortunately, the focus on developing technology locally and integrating it into products and processes is missing. Unless this missing element is addressed, no type of change in the political or social sphere will reverse the trend of jobless growth. To make it happen, neoclassical economic theories are not sufficient. Even modern endogenous growth theories are insufficient, as they tend to promote a linear correlation between idea flow or R&D investment and economic growth. We need to have a clear understanding of the evolution of products and processes, and how to add value through innovative ideas to win the global race.

By the way, once we start discussing ideas and innovation, the subject of startups inevitably arises in policy circles. If we arrange an idea competition, offer cozy office space, address intellectual property issues, and allocate risk capital, startups will flourish as a new engine of economic growth. Over the last 25 years, numerous incentives have been introduced to foster this belief. But have we got any success stories? If not, why are we allocating more money behind this belief? Instead of believing that great ideas will inevitably lead to an economic powerhouse, we should focus on the underlying pattern of evolution of inventions and innovations through incremental progression and reinvention, resulting in the rise and fall of firms and the migration of prosperity. Besides, the current startup race appears to be driven by a toxic thesis of inflating valuations out of spreading hype and offering subsidies, as opposed to delivering economic value through innovation.

To sum up, Bangladesh's jobless growth is the outcome of following flawed development thesis based on neoclassical production function-based economic theory. Even endogenous growth theories are not sufficient to offer a prescription for remedy. Besides, rather than being a solution, the toxic thesis of startups has become a barrier to finding a cure. Hence, Bangladesh needs to focus on how to add value to products and production processes using local technological advancements to compete in the global market. Besides, Bangladesh needs to enter industries to pursue idea-based value addition, as opposed to relying on labour and imported capital.

Rokonuzzaman, Ph.D is Academic and Researcher on technology, innovation and policy.​