Changing global supply system may bring blessing for Bangladesh

Al Amin :
The world trade situation is changing rapidly due to the USA-China trade war and Covid-19 pandemic. Specially, the western countries no longer want to be solely dependent on China after the pandemic.
Japan, Korea, USA and other western countries are now trying to expanding their import sources by reducing dependency on China. The changing global supply system may bring blessing for the countries like Bangladesh and India, businesses said.
A survey report published on the occasion of the annual conference of the World Economic Forum (WEF) has also mentioned this potential of Bangladesh.
But the country must bring reforms in policies and rules to get the opportunity fully from the changing situation.
FBCCI President Md Jasim Uddin told The New Nation on Tuesday, “The ongoing war between Russia and Ukraine has created a new polarization in the world. Many western countries want to shift their business from China to other places.”
“Bangladesh can take the opportunity from it. But, we have to create FDI-friendly environment to bring the foreign companies,” he said.
“We need to change our education policy to face the fourth industrial market and LDC graduation in 2026,” he added.
Japanese apparel manufacturer Matsuoka Corporation, a contract manufacturer for Uniqlo, plans on decreasing the production in China from 50 per cent to 29 per cent and plans to increase the production in Bangladesh to 34 per cent from 28 per cent and in Vietnam to 28 per cent from 16 per cent by 2025.
Like Matsuoka, many companies are now looking to shift to other countries due to the increase in labour costs because of the rapid economic rise in the Chinese economy, the onset of the zero-COVID policy, which mandates an initial suppression phase and so on.
The net inflow of foreign direct investment (FDI) in Bangladesh has crossed the $3.0 billion level, after two years, in the last fiscal year (2021-22).
According to the Bangladesh Bank data, the net FDI stood at around $3.44 billion in last fiscal year registering 37.20 per cent growth in comparison to the previous fiscal year (FY21), when the amount was $2.50 billion.
Barrister Md Sameer Sattar, President of the Dhaka Chamber of Commerce & Industry (DCCI), underscored the need of a time-bound national roadmap for attracting FDI in Bangladesh with a view to elevating the FDI to GDP ratio to 5 per cent which is currently 0.80 per cent.
“Attracting FDI, a study should be undertaken to see if the one stop service (OSS) is operating in a functional and effective manner conducive to the investors,” he added.
Besides, timely institutional and legal reforms especially setting up a separate commercial court to deal with contract enforcement cases, reform of Arbitration Act and to modernize the insolvency laws in line with other developed jurisdiction are required, he said.
“If done so promptly, it will further ease the foreign investment climate in Bangladesh,” he added.