At its inception, Bangladesh faced a serious foreign and domestic resource imbalance. To overcome the foreign exchange cri sis and to promote rapid industrialization, the country opted to pursue a strategy that placed heavy emphasis on saving foreign exchange. Taxation of imports provided a convenient way of generating large revenues for the public exchequer on the one hand while protecting domestic industries on the other. Levies on imports, therefore, were used as the main instrument for mobilizing domestic resources to ease the fiscal deficit.
International Food Policy Research Institute (IFPRI)