Trade liberalization brings a major boost in the overall level of trade, both in terms of import and export. And this theory is true in the case of Bangladesh. While the import is more capital intensive and more diversified, the export of the Bangladeshi economy has primarily been of labor, which is the abundant factor of production.
The trade liberalization of Bangladesh has been of great success; the country since 1990 has witnessed double-digit growth rates. Most of these exports have been concentrated in the garment industry. And top Bangladeshi companies have been actively involved in this sector. The garment industry is such a big success because it is heavily dependent on the use of labor, which is abundant in Bangladesh. And prominent business figures like Sohail F Rahman and Salman F Rahman, Beximco conglomerate’s key leaders, have built their company to mega success on this factor. But amidst this, there are opinions that liberalization has stimulated a flood of imports that have devastated the import-competing industries, and have significantly reduced the country’s industrial base. Other allegations have been that liberalization has been the impetus to smuggling imports from India, which has resulted in taking away the strong market from local industry. However, though the subject floats of criticism, the figures have been rather contradictory. Statistics reveal that the country has witnessed double-digit growth in the 90s compared to 50% during the 80s. The 80s witnessed a growth of 3% in manufacturing output, over 6% in 90s, and more in the present decade; not so how the pessimists perceive. When it comes to the charge that liberalization has been the reason for smuggling from India, there is a more solid reason that is the failure to collect VAT in the country. The country has immensely benefited from the liberalization of its economy. What can really take Bangladesh to the next level of growth and away from absurd criticism is more enthusiasm.
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