Bangladesh: Consolidating Export-led Growth - Country Diagnostic Study
This study argues that some of the policies that allowed Bangladesh to prosper in the last few years will become less effective, and the economy will need to “switch gears” to consolidate the growth momentum over the medium term.
Bangladesh has transformed its economy over the last 2 decades, graduating to middle-income status as average annual growth remained strong at 5%–6%. The country’s goal to become an upper-middle-income country by 2021 will require even stronger annual growth of 7.5%–8%.
The study finds that the most critical constraints to growth are (i) insufficient reliable energy supply, (ii) policies that indirectly stunt development of economic activities unrelated to ready-made garment exports, and (iii) insufficient security about property and land rights due in part to inadequate registry systems. If policies are designed to urgently tackle these constraints, Bangladesh will be free to harness its potential for inclusive and sustainable growth.
- Economic growth rate has been high, but quality investments are needed going forward.
- Lack of energy infrastructure, uncertainties in property ownership and lack of self-discovery in non-RMG sectors are significant barriers for private investment.
- Economic growth has been inclusive: poverty has declined; the provision of health, education, and basic infrastructure has improved; and financial inclusion has thrived.
- Measures to increase long-term energy supply and foster energy conservation are urgently needed.
- The success of the RMG sector has inadvertently come at the expense of poor growth and limited prospects for diversifying into other sectors.
- The anti-export bias faced by non-RMG sectors limits competition and product diversification.
- Boxes, Figures, and Tables
- Weights and Measures
- Bangladesh Fast Facts
- Growth and Investment in Perspective: An Analysis of Trends
- A Diagnosis of Critical Constraints to Growth
- Raising Living Standards for All: Maintaining and Propelling Inclusive Growth
- The Energy Challenge: A Critical Constraint to Growth
- Economic Diversification for Sustained Growth: Does Bangladesh Need to Switch Gears?
- Conclusions and Policy Recommendations