Assignment Name: Trade-Related Study on Opening Up of Different Service Sectors—An Impact Analysis and Policy Recommendations

Country: Bangladesh

Client Name: Ministry of Commerce (MoC), Government of the People’s Republic of Bangladesh

The Government of Bangladesh, through the Ministry of Commerce under the Bangladesh Regional Connectivity Project I (BRCP-I) with financing from the International Development Association (IDA, World Bank), has commissioned DM WATCH LIMITED to conduct a study on “Opening Up of Different Service Sectors—An Impact Analysis and Policy Recommendations.”

The service sector accounts for nearly 50% of Bangladesh’s GDP and plays a central role in growth, employment generation, and structural transformation. With Bangladesh preparing to graduate from Least Developed Country (LDC) status, service sector competitiveness and strategic liberalization are crucial for ensuring sustainable development and global integration. The study aims to assess the economic, social, and regulatory impacts of liberalizing key service sectors, particularly in the context of preference erosion, WTO General Agreement on Trade in Services (GATS) commitments, Free Trade Agreements (FTAs), and Economic Partnership Agreements (EPAs).

Key objectives include:

• Mapping Bangladesh’s service sectors and benchmarking them against comparable economies.
• Identifying high-potential service sectors (e.g., IT, financial services, education, healthcare, skilled labor mobility) for phased liberalization and FDI attraction.
• Analyzing trade-in-services chapters of FTAs/EPAs in potential partner countries to derive lessons for Bangladesh.
• Conducting impact analysis by GATS modes of supply (Mode 1–cross-border, Mode 2–consumption abroad, Mode 3–commercial presence, Mode 4–movement of natural persons).
• Assessing risks and safeguards for domestic SMEs and employment.
• Developing a roadmap for phased liberalization with clear timelines, regulatory adjustments, and safeguards.

The study will provide actionable policy recommendations and a strategic roadmap to guide Bangladesh in service sector liberalization, ensuring alignment with national economic priorities, social equity considerations, and LDC graduation strategies.

DM WATCH LIMITED will implement the assignment through a structured research process combining quantitative and qualitative approaches. The services will include:

• Inception and Desk Review: Review of existing studies, policies, WTO/GATS provisions, and FTA/EPA chapters of potential partner countries. Submission of an inception report with methodology and work plan.
• Sectoral and Benchmark Analysis: Profiling major service sectors in Bangladesh, including contribution to GDP, growth, FDI inflows, and regulatory frameworks. Comparative benchmarking with peer economies.
• Stakeholder Engagement: Conducting at least 20 Key Informant Interviews (KIIs) with government, industry, trade bodies, and investors; 2 Focus Group Discussions (FGDs); and 1 public consultation workshop.
• Case Studies and Best Practices: Analysis of liberalization experiences in comparable countries and relevant LDCs to extract lessons.
• Econometric and Impact Analysis: Use of econometric modeling to assess impacts of liberalization on GDP growth, employment, service quality, FDI, and technology transfer.
• Risk Assessment: Identifying risks to SMEs, employment, and equity; developing safeguard measures and phased approaches.

Reporting and Dissemination: Preparation of draft and final reports with policy recommendations and a liberalization roadmap; delivery of presentations, policy briefs, and validation workshops.