Applying the Growth Identification & Facilitation Framework for Bangladesh

Authors : Mohammad Anamul Huq; Zhang Peng; Tonda Otukana Oda; Lovemore Mbombo; Ghulam Farid; Modise Makwati

Volume/Issue : Volume 8 - 2023, Issue 10 - October

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The growth identification and facilitation framework is a comprehensive approach that aims to identify and promote sectors with high growth potential in developing countries. In the case of Bangladesh, an integral aspect of this framework is the evaluation of the impact of currency devaluation on export performance. This paper aims to explore the potential benefits and challenges associated with currency devaluation as a strategy to enhance export performance within the context of Bangladesh. Currency devaluation can lead to increased competitiveness, as a depreciated domestic currency makes exports relatively cheaper for international buyers. This can result in a boost to export volumes and increased foreign exchange earnings for the country. An improvement in export performance due to currency devaluation can have a positive impact on the overall economic growth of the country. It can spur industrial development, create employment opportunities, and attract foreign direct investment. Currency devaluation can lead to increased import costs, as imported goods become more expensive in domestic markets. This can result in inflationary pressures, potentially impacting the purchasing power of the population and eroding the gains from export-led growth. Bangladesh relies on imported raw materials and intermediate goods for many export-oriented industries. A devalued currency may increase the cost of these inputs, potentially reducing profit margins and hindering export competitiveness. Currency devaluation alone may not be sufficient to address underlying structural challenges such as inadequate infrastructure, a lack of skilled labor, and bureaucratic hurdles. These bottlenecks could limit the potential benefits of devaluation on export performance. Focusing on product diversification and exploring new markets can help mitigate the risks associated with currency devaluation. By broadening the range of export goods and customer bases, Bangladesh can reduce its dependence on a few key industries or markets. Alongside currency devaluation, policymakers should prioritize promoting export-oriented industries by providing targeted incentives, improving infrastructure, and streamlining bureaucratic processes. This approach will strengthen the overall competitiveness of these industries and enhance their capacity to capitalize on a devalued currency. Small and medium-sized enterprises (SMEs) play a crucial role in export growth. Governments should focus on providing tailored support to SMEs, including access to finance, business development services, and technology upgrades. This will help them adapt to changes in the currency value more effectively and enhance their export competitiveness. The growth identification and facilitation framework provides a comprehensive approach for Bangladesh to enhance its export performance. While currency devaluation can be a valuable tool, policymakers must carefully consider its potential impact on inflation, import costs, and structural bottlenecks. By implementing strategic policies and supporting the diversification and growth of export-oriented industries, Bangladesh can utilize currency devaluation effectively to drive sustainable economic growth and development.

Keywords : Bangladesh; China; Human Resource Development; Readymade Garments; ICT, Finance.


Paper Submission Last Date
31 - December - 2023

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