In March 2026, the World Bank released a significant report titled “Industrial Policy for Development: Approaches in the 21st Century,” in which authors Ana Margarida Fernandes and Tristan Reed expressed gratitude to the WB’s Chief Economist Indermit Gill for allowing them the independence to draw their own conclusions. Industrial policy has historically been a contentious topic for the World Bank. Gill noted in the report’s foreword that the World Bank had previously labeled industrial policy as largely unsuccessful, except for a few instances in East Asia.
The report in March 2026 presented a fresh perspective, asserting that while industrial policy is challenging and risky, it is more feasible to replicate than previously believed and should not be limited to East Asian success stories. This reassessment coincides with a global trade shift away from the established norms of liberalism and open markets. Notably, the G20 economies have increasingly adopted trade restrictions, with the value of such measures soaring from $115 billion in 2010 to $4 trillion by November 2025.
Developing nations have also embraced trade and industrial policies. The World Bank report highlighted that low-income countries tend to have higher average tariffs, while upper-middle-income nations heavily utilize business subsidies. This resurgence of industrial policy is driven by a changing global landscape influenced by factors like China’s economic ascendance, which has challenged previous assumptions about trade competitiveness and industrial strategies.
The evolving dynamics of international trade have underscored the importance of resilience, security, and domestic capabilities over mere efficiency. The COVID-19 pandemic exposed the vulnerabilities of Western economies heavily reliant on a limited number of suppliers, prompting a reevaluation of global sourcing strategies. While protectionist policies have their merits in nurturing domestic industries, there is a fine line between fostering competitiveness and creating dependency on protection.
For Bangladesh, the historical reliance on protectionist measures has raised questions about the effectiveness of such policies in fostering export competitiveness. While the country’s garment sector has thrived in the export market, other industries have struggled to meet international standards and demands. The need for a shift towards stronger standards, reduced anti-export bias, and enhanced export readiness is crucial for Bangladesh’s economic growth and competitiveness.
In light of these challenges, Bangladesh faces a dilemma between maintaining protectionist policies and embracing trade reforms to enhance global competitiveness. The impending graduation from Least Developed Country status further underscores the urgency for policy reforms to facilitate market access and export diversification. Moving forward, a balanced approach that combines targeted industrial support with comprehensive reforms in trade policies and standards enforcement will be essential for Bangladesh’s economic development and global integration.
