Govt must address exporters’ challenges after cutting incentives – Professor Mustafizur Rahman | CPD
Originally posted in The Business Standard on 30 January 2024
The government should address a wide range of export-related challenges that go beyond traditional subsidies.
We do not just support exporters through subsidies. There are several other areas. The government needs to pay special attention to reducing the hassles in those areas.
Customs clearance emerged as a key concern for most exporters. Rising costs of doing business due to various factors, including extortion, is another concern. The government should take decisive action in these areas.
For the upcoming LDC graduation in 2026, importance should be given to aligning policies with the rules and regulations of the World Trade Organization. There is a need for proactive coordination to facilitate a smooth transition.
As regards subsidies, there has been a history of providing product-specific and new market subsidies to boost exports but there needs to be policy coordination to prepare for the LDC graduation in 2026.
Even if export incentives were withdrawn, it might not pose a significant challenge.
To enhance the investment environment for exporters, there must be simplified export permissions, improved customs efficiency, and strengthened government institutions. Simultaneous intervention in all relevant areas is also necessary.
Good governance is the key to addressing the root causes of several issues faced by exporters.
The exchange rate is a matter of concern and there is a need for quicker coordination in achieving a market-based exchange rate.
With the government facing pressure from both the dollar and the Taka, a shift is needed in focus towards increasing the tax-to-GDP ratio. Increasing taxes is a critical task to overcome the ongoing crisis.
A zero-tolerance towards corruption and money laundering is crucial to resolve the country’s crises effectively.
Prof Mustafizur Rahman is a distinguished fellow at CPD.
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