Authors : Mohammad Anamul Huq; Zhang Peng; Tonda Otukana Oda; Lovemore Mbombo; Ghulam Farid; Modise Makwati
Volume/Issue : Volume 8 - 2023, Issue 10 - October
Google Scholar : https://tinyurl.com/mw22d7zd
Scribd : https://tinyurl.com/mwajnxuj
DOI : https://doi.org/10.5281/zenodo.10046879
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.