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THE government’s failure overshadows its achievements efforts for export diversification. It has put in efforts for two decades, yet apparel as a single sector continues to dominate export earnings. Whilst apparel accounted for about 85 per cent of the overall export earnings of $50 billion in the 2024 calendar year, suggesting a heavy reliance on a single export item that has continued for years, the export potential of sectors such as leather and leather goods, pharmaceutical products and light engineering products has remained almost untapped. Such a failure is viewed as a deterrent, especially when the country is set to graduate out of the bloc of least developed countries to become a developing country in November 2026, which is, in fact, a deferred deadline on Bangladesh’s appeal. The government has implemented three projects, with direct and indirect links to the expansion of the export basket, on loans from multilateral lenders for about two decades, in addition to the government’s initiative for ‘one district, one product.’

The government implemented a World Bank-funded project involving $48 million in 1999–2024 on apparel export diversification. The project could almost double knitwear export value in the period having reached $2 billion by 2003–2004, accounting for 38 per cent of the apparel export compared with 25 per cent when the project began. The government has been implementing the another World Bank-funded project involving about $119.12 million since 2017 to step up competitiveness in leather, footwear, light engineering and plastic goods and to generate about 90,000 jobs. The project was, however, revised on September 17 for the third time, with the deadline having been extended until June 2026. The government is implementing an Asian Development Bank-funded project, involving a loan of $300 million, focused on skills and employment, indirectly linked to export diversification by improving the light engineering sector. Yet, a heavy reliance on a single export product continues. Experts believe that projects alone are not enough for export diversification. As this is a multidimensional issue, the focus should also be on the lack of technology, skilled human resources, inefficient logistics, the absence of market intelligence and poor foreign direct investments. Whilst it is imperative to expand the export basket into higher-value products, within the apparel sector and outside, the factors that experts believe that the government should focus on also include a favourable investment climate, drawing in foreign direct investment, still below 1.5 per cent of the gross domestic product, that is closely linked to export diversification.

Foreign direct investment also facilitates technology transfer and helps to diversify both the export market and the range of export products. The government should, therefore, attend to all the issues, including the ease of doing business, port efficiencies, transport logistics and skilled human resources to effectively diversify export and cash in on graduation to a developing country.