Moving beyond least developed country status: Challenges to diversifying Bangladesh’s seafood exports

Abstract

Bangladesh is due to graduate from Least Developed Country status, resulting in the loss of preferential market access for textiles and ready-made-garments in key import markets. The paper examines the opportunities and constraints for developing a stronger export market orientation in the Bangladesh fish and seafood sector. We discuss the role of public and private standards in food safety and quality, as well as empirical evidence for their effect on fish and seafood value chains. We assess the factors limiting diversification into fish and seafood exports and constraints to value chain enhancement. The experience of export-oriented shrimp value chains provides lessons for the aquaculture sector. High costs of compliance with public and private standards and inability to meet traceability requirements for food safety and quality present a significant challenge. In diversifying beyond domestic markets for fish and seafood, the policy challenge lies in striking an appropriate balance between intervention and guidance.

Keywords:

• Aquaculture
• diversification
• food safety
• seafood
• standards

Notes

1 Bangladesh is heavily reliant on ready-made garments (RMG) exports, which accounted for more than 84% of total exports by value in 2018–2019 (OEC, 2021).

2 Literature substantiates that countries can achieve sustainable growth through export diversification (Dunusinghe, 2009; Hausmann et al., 2007; Sarker, 2018; World Bank, 2009). Export concentration increases vulnerability and creates detrimental long-term effects, hence diversification is essential for economic growth (Sattar, 2015; Sumi & Reaz, 2020; World Bank, 2020). Export diversification can be achieved by either adding new products to the existing portfolio of exports or accessing new markets, or by a combination of the two.

3 Bangladesh had per capita income of US$1827 (against the threshold of US$1230 for a country to be classified as a developing country)and HAI of 75.4 (against the threshold of 66 or above). Bangladesh’s EVI score was 27.3 points; this must be below 32 points for an LDC.

4 Developed (high-income) countries offer “special and differential treatment” to developing (low- and middle-income) countries in the form of non-reciprocal trade preferences. Preferences schemes were established in the early 1970s and are founded on the idea of granting non-reciprocal and non-discriminatory preferential market access to developing countries, with the objective of increasing their export earnings, promoting their industrialization and accelerating their rates of economic growth.

5 With the exception of a 10% export subsidy for frozen shrimp (Banrie, 2013).

6 Comprises animal-based food products including seafood and fish (excluding leather and hides), processed or preserved food products, fruit and vegetables and animal/vegetable by-products.

7 Live, fresh/chilled, frozen or prepared fish and crustaceans.

8 “Fisheries” refers to both fish and seafood, including crustaceans. “Fish” refers to finned fish.

9 Roughly 12% of total fish production is of hilsa, Bangladesh’s national fish, which is also a registered geographic indication.

10 Bangladesh’s production of pangasius grew by 17% in 2020 (Fletcher, 2020).

11 There are 129 processing facilities for both domestic and international markets. Of these, 53 are approved for export to the EU (UNCTAD, 2017).

12 Offered by the Global Aquaculture Alliance, https://www.bapcertification.org/

Additional information

Funding

This work was supported by the Global Challenges Research Fund, UK Research and Innovation.