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BD needs to promote export diversification: IMF

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Staff Reporter
The International Monetary Fund (IMF) has laid emphasis on continuing investment in infrastructure and hu-man capital, lower barriers to new businesses and reviewing the existing tariff structure faced by the non-RMG sector in Bangladesh to promote export diversification.
"With limited diversification, exports remain concentrated in the RMG sector," said the IMF, working to foster global monetary cooperation, in its recent report.
The IMF said new products and growing sectors, such as footwear, leather, and pharmaceuticals are showing potential for diversification, but the share of the low-skilled RMG sector in total exports remains high at around 80 percent.
It said boosting the low female labor force participation is the key to raising potential growth in Bangladesh.
The female labor force participation rate, according to the IMF, remains low in Bangladesh in comparison with comparator countries.
Bangladesh's growth model has substantially benefited from female labor force participation in the RMG, agri-culture and service sectors.
The authorities are working with development partners and have taken a number of initiatives to address con-straints such as lack of skills and education, and agreed that upgrading infrastructure will improve participation and promote inclusive growth.
Constraints range from large informality, marital status, mismatch of skills, access to finance, poor infrastruc-ture, and disparities in wages, it said.
Higher spending on education and vocational training is needed as it not only enhances job prospects and ad-dresses skill mismatch, but also addresses social causes, including a reduction in female child marriages, said the report.
The international lending agency said access to health services is critical as it helps reduce the time-consuming health care obligations in the family while quality maternal health care is vital for re-entering the labour force.
It said the substantial progress on financial inclusion should continue. "The steady progress in financial inclu-sion has been led by the diversification of service delivery channels, including digital financial services."
The IMF said financial literacy is improving through programs with agencies such as the Bangladesh Securities and Exchange Commission and companies like MasterCard.
"Confidence in the formal financial sector is still low. Strengthening the legal and regulatory framework and the prompt adoption of the new Secured Transactions Law should enhance access to credit," the report added.