Impact of withdrawal of cash incentive as export subsidy on export earning

What is it about?

Impact of withdrawal of cash incentives to the export subsidies, as Bangladesh is set graduate from LDCs.

Featured Image

Photo by PortCalls Asia on Unsplash

Photo by PortCalls Asia on Unsplash

Why is it important?

Bangladesh is poised to graduate into a developing economy later in 2026 according to the UN declaration as all criteria were met. However, the new economic environment will bring up new challenges, especially for export-oriented industries. Our critical economic catalyst export will encounter facility loss, business loss and tariff hike above all local fiscal benefits which solidified our export business like cash incentive and lowered tax rate and benefits. This study aimed to analyse whether major export friendly factor incentives can reduce and cut export earnings or now with negative impacts. Above all, how graduating and developing economies coped and offset export loss while they graduated. Based on primary survey data the relevance of cash incentive could not be quantitatively proved in the two variables regression test. It indicates that there is virtually no significant relationship between cash incentives and export earnings of Bangladesh. Alongside, this study also found on qualitative and quantitative assessment based on Likert scale result that Developing a business environment and reducing doing business cost are the most important alternative to cash incentive loss for sustaining export market competitiveness.

Perspectives