Hailed as a garment-exporting juggernaut, Bangladesh is diversifying into the fast-growing services sector to secure new jobs and inoculate itself from future shocks.
The country's textiles industry has been booming - accounting for over 80 percent of the country's $3.2 billion exports last December - but Bangladesh has seen other LDCs caught off guard by slumping prices for key exports. It approached UNCTAD to help unlock the bottlenecks to growth in its services sector.
"Bangladesh has rightly taken the view that growth in a single sector is not enough, if that sector could be vulnerable to sudden shocks," said Joakim Reiter, UNCTAD's Deputy Secretary-General. "Branching out into new sectors helps to boost resilience," he said, ahead of the Global Services Forum scheduled for 21 July in Nairobi.
Bangladesh identified some services sectors that could potentially compete at the global level. As the fifth most populous Asian country, it has a large domestic market and a swelling workforce, much of it highly educated and qualified.
Between 2000 and 2014, for example, exports of commercial services from Bangladesh surged from $300 million to $1.6 billion per year. Services, including digital services, now account for half of GDP and two-fifths of employment.
At the request of the Bangladeshi government, UNCTAD organized two workshops in Dhaka in 2014 and provided research and analysis that culminated in a Services Policy Review. The review was the 10th in an UNCTAD series to help developing countries tackle policy and regulatory challenges.
The review also recommends actions to boost ICT capacity and expand services in the areas of health, tourism, accounting, engineering, and to increase coordination across government ministries. For example, UNCTAD recommended that foreign professors or exchange programs can help universities to overcome the shortage of local experts in the medical field.
UNCTAD supports Bangladesh's pivot towards services in other ways too. UNCTAD experts advised Bangladeshi negotiators to utilize preferences granted by WTO members to certain markets for services. WTO members had promised this preferential access in 2011 but significant challenges remain.
Part of UNCTAD14, the Global Services Forum will bring together government officials, corporate leaders, and civil society representatives to forge partnerships and exchange ideas and insights for growth in the services sector.