The money will come as technical assistance to diversify and boost the new export sectors, reducing dependence on the main export earner readymade garments (RMG), which will lose its privileges in the US market after 2004.

A memorandum of understanding (MoU) to this effect was signed between Bangladesh and the United States here yesterday. Bangladesh will provide about Tk 7.8 crore (1.3 million dollars) for the five-year programme that also focuses on ICT sector development and human capacity development programmes, economic relations division (ERD) sources said.

"The programme is expected to help Bangladesh diversify its export earnings and reduce dependence on the RMG sector as the principal export earner," an official of the USAID said. He said the assistance would focus on helping Bangladeshi private enterprises to expand their businesses within sub-sectors having export growth potentials.

The sectors include light engineering, auto parts, electronics and electrical items, footwear and leather goods, handmade papers, computer software and IT enabled services.

ERD Secretary Mirza Tassaduq Hossain Beg and Mission Chief of the US Agency for International Development (USAID) Gene V. Jeorge signed the agreement at the NEC Bhaban here this afternoon. USAID Project Development Officer Caryle Cammisa and senior officials of the government were present in the agreement signing ceremony.

The USAID official said the ministry of commerce would identify and address the legal, policy and regulatory barriers hindering exports from potential sub sectors in the country.

It will also take initiative to make the selected sectors capable to compete in global and domestic market places using the grant money.