Competitive Advantage and Competition Policy in Developing Countries
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Competitive Advantage and Competition Policy in Developing Countries

Edited by Paul Cook, Raul Fabella and Cassey Lee

The book discusses competition from different theoretical perspectives and examines the implications these viewpoints have for policy. The contributors assess competitiveness in domestic markets and the impact of foreign competition. They also review the experiences of a range of countries in developing competition policy and examine both the strengths and weaknesses of these policies.
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Chapter 11: Competition Policy and Competitive Markets in Bangladesh

Selim Raihan


Selim Raihan INTRODUCTION Over the last two decades Bangladesh has been pursuing extensive macroeconomic and microeconomic reforms. The aim of these reforms has been to develop and expand the private-sector-oriented market economy in the country and to improve the competitiveness of Bangladesh industry in the domestic and international market. Questions have been raised, however, over the effectiveness of these measures in promoting competition in the domestic market, especially in the context of the manufacturing industries. This point is particularly relevant when one considers that there is no formal ‘competition policy’ in Bangladesh. A wide range of policies and programmes do affect the competitive environment in the economy, including trade policy, industrial policy, exchange rate policy, monetary policy, fiscal policy and privatization. To a large extent these policies have been implemented as a part of an overall economic reform programme, namely, the Structural Adjustment Programme (SAP), which was initiated in 1987, and lending from the World Bank and the IMF. Economic liberalization has been introduced in phases in Bangladesh. After Independence in 1971 the economy was highly restricted. Trade policy was characterized by high tariffs and non-tariff barriers and an overvalued exchange rate, which was supported by the import-substitution industrialization strategy of the government. This policy was pursued with the aim of improving the balance of payments and creating a protected domestic market for the manufacturing industries (Bhuyan and Rashid, 1993). The regime was also characterized by the dominance of the state sector over the private sector in...

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