This is the sixth and last in a series of posts about the recent report, Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth. The previous post looked at what sort of policies it will take to achieve the goal of middle income status by 2021.
Bangladesh, one of Asia’s youngest countries, is poised to exploit the long-awaited “demographic dividend” with a higher share of working-age population. Labor is Bangladesh’s strongest source of comparative advantage, and Bangladesh’s abundant and growing labor force is currently underutilized. Absorbing the growing labor force and utilizing better the existing stock of underemployed people requires expansion of labor-intensive activities. And that means expanding exports, as domestic consumption offers limited opportunities for specializing in labor-intensive production.
What are the potentials for expanding exports? Bangladesh’s competitors are becoming expensive places in which to do business. In the next three to four years, China’s exports of labor-intensive manufactured goods are projected to decline. It will no longer have one-third of the world market in garments, textiles, shoes, furniture, toys, electrical goods, car parts, plastic, and kitchen wares. Capturing just 1% of China’s manufacturing export markets would almost double Bangladesh’s manufactured exports.