Source: http://en.wikipedia.org/wiki/Economy_of_Bangladesh

Constraints To Economic Development

Why it is

Necessary? •Making Urban Agglomeration Competitive

•Connecting Regions and Markets

•Widen Distribution Network

Current

Problems

•Power Outage

•Weak Transportation Infrastructure

•Paved Roads

•Airport Density

Solution •Forge Partnership between Domestic and

Private Investor

•Increase Public Spending on Infrastructure

Development

Why it is

Necessary? Industrialization Depends on

•Large Scale Development of Land

•Utilization of Land

Current

Problems •Land is Severely Limited

•Property Registration takes up to 245 Days!

Solution •Ensure Formal Property Rights

•Introducing Economic Zones Act

•Computerizing Land Registries

•Time-limit on Land Related Procedures

Why it is

Necessary? To Become Urban, Industrialization,

Knowledge-based Economy

Current

Problems Acute Skill Shortage

Solution

•TVET System

•Co-ordination Between Academia and Industries

•Trainee and Employer Targeted Financing

•In-Depth Skills Gap Survey

TVET: Technical and Vocational Education and Training

Why it is

Necessary? Essential for Climate Resilient Private

Enterprise

Recommendation

•Strengthen the Judiciary

•Improve Custom Procedure

•Strengthen Credit Information System

•Conduct Investment Climate Assessment

Exploring

Foreign Markets

In Fiscal 2011,

Consumption = above 80% of GDP

Investment = 24.7% of GDP

Net Export = -8.5% of GDP

Desired Economic Growth of 7 to 8% will

Require the Investment to be at least 33% of GDP, if Focused Domestically.

Solution?

An Export-Oriented Growth Strategy!

In Last Two Decades Much of the Growth

and Poverty reduction was associated with:

•Readymade Garments(RMG)

•Migration of People

So, the Focus should be on ‘Export’ and ‘Migration’.

The Biggest Competitive

Advantage is

Labor Force! Over the Last Decade

Exports has grown

48.2%!

Yet, Diversification of Export is Recommended. Such Areas Can be:

•Pharmaceuticals •Electronics

•Shipbuilding •Jute

•Leather •ITES-BPO

ITES-BPO: Information Technology Enabled Service, Business Process Outsourcing

Key Issues:

• Bangladesh has a Labor-Surplus Economy

• Domestic Market can not Absorb the

Expanding Labor Force

• In 2011, Contribution of Remittances to

GDP was 10.5%

However, in the long-run, Jobs should be created to absorb surplus labor domestically.

YES!

GDP Needs to Grow at 7-8% to Achieve this

*http://data.worldbank.org/income-level/LMC

This will require:

GNI per Capita to grow from $784 to

$1,764*

Constraints in Achieving Target Growth:

Reversal in Trade Policy

Lack of Use of PPP

Financial and Operational Inefficiency

*PPP: Public Private Partnership

Given the Constraints to Its Growth,

Bangladesh Must:

• Invest in Infrastructure

• Solve the Severe Energy Crisis

• Improve Investment Climate

• Improve Regulatory Environment

• Introduce a Simple, Coherent TAX policy