Experts and businesses on Tuesday urged the government to adopt a national logistics policy to increase the country’s competitiveness in global trade and business saying 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 said that improvement in the Logistics Performance Index was crucial in increasing exports and a lower position in the logistics index might hurt the country’s competitiveness.
Former DCCI president Abul Kasem Khan said that the government should formulate a comprehensive logistics policy under a single authority or ministry to supervise.
Requesting the government to declare logistics as a thrust sector, he said that logistics was a vast issue and there was no single authority to look after it.
Citing an example of Vietnam, Kasem recommended that the common bonded warehousing system should be included in the logistic policy.
South Asian Network on Economic Modeling executive director Selim Raiha said that 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,’ he added.
Besides, to increase export, improvement in the LPI is crucial, he said.
Selim suggested that the challenges of tariff and para-tariff issues, including customs modernisation, should be addressed and urged for full automation of port formalities, payment processes and harmonisation of HS code and customs formalities.
He also 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 that the customs administration should play the role of a trade facilitator rather than that of a tax collector.
‘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,’ he said.
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.
‘We need to have an internal index of competitiveness which needs to be monitored regularly. We need to ensure the best utilisation of the full capacity of ports,’ said Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq.
She said that in terms of improvement in the logistics performance, inward foreign direct investment and intra-regional trade were also important.
Regarding better coordination in the logistic sector, Rubana urged for the private sector’s participation as all efforts were for the wellbeing of the country.
She also suggested that the ASEAN Plus One policy is adopted to connect Bangladesh with the trade of this region.
DCCI president Shams Mahmud said that despite remarkable economic progress, Bangladesh lagged behind competing countries in terms of logistics infrastructure competitiveness.
He said logistics costs in Bangladesh were high in most sectors while road transport costs here were higher than many developing and developed countries.
The DCCI president also suggested for a long-term multimodal logistics sector roadmap along with the logistics sector policy and a regulation to allow common bonded warehousing.
He recommended automation of the customs clearance process and an integrated port infrastructure with larger storage facility, handling facility and terminal.
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