Bangladesh's Economy Stagnates Despite Growth: Reform Urged
Bangladesh's economy faces challenges despite its growth. The private sector, employing 90% of the workforce, sees declining credit flow, indicating a stagnant business environment. Reliance on apparel exports and a model based on cheap labor and preferential trade access have led to rising inequality and unemployment.
The country's economic growth model has resulted in low productivity and elite control over resources. Small and medium-sized enterprises (SMEs), engaging nearly 80-90% of the workforce directly or indirectly, struggle due to weak governance, policy inconsistency, and rent-seeking. To address these issues, Bangladesh needs a comprehensive reform agenda focused on job creation, investor confidence, transparency, accountability, and competitiveness.
To foster long-term sustainability and tackle climate vulnerabilities, a shift towards a green, knowledge-based, and circular economy is crucial. This transition should include strengthening micro, cottage, and small industries, particularly those led by women and youth. The German government's proposal for a 'Digital Pact for Further Training,' digital agency for skilled immigration, increased minimum wage, flexible working hours, improved occupational health and safety, and AI regulation can serve as inspiration for such reforms.
Bangladesh's economic growth must be inclusive and sustainable. This requires addressing income inequality, where the top 10% control most of the wealth, and the bottom 50% hold a very small share. By implementing comprehensive reforms, Bangladesh can create jobs, attract skilled workers, and ensure long-term economic development for all.
