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Bangladesh is poised for significant economic expansion driven by a growing population, which will boost domestic demand and present ample opportunities for private sector investment, according to a new report by the World Bank Group.
The findings were revealed during a session at the ongoing Bangladesh Investment Summit in Dhaka on Tuesday.
The report, titled Bangladesh: Country Private Sector Diagnostic (CPSD), highlights that Bangladesh’s population growth over the next two decades will outpace most other middle-income countries, creating significant demand across multiple sectors, including manufacturing, housing, consumer goods, and services. This surge in demand offers substantial opportunities for private sector investment, particularly as the country positions itself for more inclusive and sustainable growth.
The CPSD, a collaborative effort by the World Bank, IFC, and MIGA, outlines specific steps Bangladesh can take to foster a more competitive business environment and accelerate private sector growth. Key to this growth is tapping into four major sectors: green-ready made garments (RMG), middle-income housing, paint and dyes, and digital financial services.
According to the report, implementing targeted policy reforms in these sectors could generate millions of jobs annually. For instance, reforms in the construction industry could create 2.37 million jobs annually by supporting the development of new housing units. The paint and dye industry, through expanded domestic production, could generate over 664,000 formal jobs, while digital financial services reforms could create between 96,000 to 460,000 new jobs.
The World Bank Group report calls for a series of policy actions to unlock these opportunities, including:
Green RMG Sector: Upgrading production to comply with EU requirements, focusing on sustainability and labor standards, ensuring Bangladesh remains competitive post-graduation from Least Developed Country (LDC) status.
Housing for Middle-Income Families: Strengthening regulatory frameworks for property registration and improving access to mortgages by ensuring accurate property valuations.
Paint and Dyes Sector: Digitizing customs classifications to expedite clearance and streamline business operations.
Digital Financial Services: Establishing protocols that allow mobile financial services to handle higher transaction limits, facilitating wholesale transactions and improving accessibility for businesses.
Support for Policy Reforms and Job Creation
“The World Bank Group’s report provides essential guidance for shaping policies that will promote private sector-led growth and help establish the institutional frameworks necessary for long-term economic progress in Bangladesh,” said Chowdhury Ashik Mahmud Bin Harun, Executive Chairman of the Bangladesh Investment Development Authority (BIDA). “The interim government remains committed to creating a conducive business environment and expanding emerging industries to generate job opportunities and spur growth.”
Gayle Martin, World Bank Interim Country Director for Bangladesh, emphasized the urgency of transformative policy reforms. “Bangladesh needs urgent and comprehensive policy reforms to help firms expand domestically, compete globally, and create millions of jobs for its youth entering the labor market every year,” she said. “This report provides a roadmap for overcoming barriers to private sector growth, ensuring a stronger and more inclusive economy.”
Martin Holtmann, IFC Country Manager for Bangladesh, Bhutan, and Nepal, echoed these sentiments, highlighting IFC’s commitment to supporting Bangladesh in strengthening its private sector and accelerating sustainable development. “Through collaboration, we can create more jobs, improve livelihoods, and drive sustainable economic growth for the people of Bangladesh.”
The Way Forward: Strengthening Bangladesh’s Investment Climate
Following the launch of the report, a panel discussion at the Bangladesh Investment Summit, featuring leaders from both the public and private sectors, explored the key findings of the CPSD. The discussion included insights from Lutfey Siddiqi, Bangladesh Government’s Envoy for International Affairs, and private sector leaders such as Arun Mitra, Head of Operations at Nippon Paint, and Kamal Quadir, CEO of bKash, along with other key industry figures.
The report concludes by stressing that, while Bangladesh faces challenges, the country’s strong fundamentals and potential for growth offer exciting opportunities for both domestic and foreign investors. By addressing key barriers to investment and fostering the right policy environment, Bangladesh can harness its demographic dividend and secure a prosperous future.
