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Need national logistics policy to increase competitiveness in global trade

Experts and businesses on 22 September urged the government to adopt a national logistics policy to increase the country’s competitiveness in global trade and business. They mentioned that poor performance in the logistics index might impact exports negatively.

At a webinar organised by the Dhaka Chamber of Commerce and Industry on ‘Logistics – Issues and Challenges in Cross-Border Trade of Bangladesh’, speakers urged that.

Figure: Improvement in the Logistics Performance Index is crucial in increasing exports. Courtesy: Collected

Improvement in the Logistics Performance Index is crucial in increasing exports and a lower position in the logistics index might hurt the country’s competitiveness.

The government should formulate a comprehensive logistics policy under a single authority or ministry to supervise, said Former DCCI President Abul Kasem Khan.

Efficient logistics management has a stronger effect on trade promotion than tariff cuts. Despite remarkable economic progress, Bangladesh has lagged behind competing countries in terms of logistics infrastructure competitiveness, said the trade leader.

Requesting the government to declare logistics as a thrust sector, though logistics was a vast issue and there was no single authority to look after it, he added.

Citing an example of Vietnam, Kasem recommended that the common bonded warehousing system should be included in the logistic policy.

Bangladesh’s progress in the Logistic Performance Index between 2007 and 2018 was not up to the expected level whereas China, Vietnam and Thailand had gained tremendous growth.

“A lower position in the LPI may hurt our competitiveness. Besides, to increase export, improvement in the LPI is crucial,” said South Asian Network on Economic Modeling Executive Director Selim Raiha.

The challenges of tariff and para-tariff issues, including customs modernization, should be addressed and urged for full automation of port formalities, payment processes and harmonization of HS code and customs formalities, experts suggested.

Selim Raiha said that faster implementation of large infrastructure projects and upgrading the railways, shipping and river connectivity could improve Bangladesh’s position in the LPI.

Policy Research Institute chairman Zaidi Sattar said, “If we can develop our port and custom infrastructures, our position in the LPI will improve, resulting in trade cost cuts. Through the improvement in the LPI score, the non-RMG sector will get its real benefits.”

Demanding incentives in export and domestic sales, Zaidi Sattar said that every year, 100 new products were added to the export basket but 80 per cent of them did not survive due to lack of incentives.

Demanding an internal index of competitiveness Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq said that “We need to ensure the best utilization of the full capacity of ports.”

M Masrur Reaz, Chairman, Policy Exchange said, “Bangladesh is now doing better in several trade facilitation services. But logistics and infrastructure are two very important areas that need to be improved a lot.”

Professional bonded warehousing facilities is important, especially in the SEZ regions, through allocation of adequate land, he added.

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