Bangladesh’s potential as a manufacturing hub

The government in Bangladesh has established dedicated industrial zones and is offering incentives to attract investors. All these are being done to encourage the manufacturing sector. As the economy of the country is moving fast defying all odds, the thrust we believe should be given to the manufacturing sector.

According to a report published in this newspaper recently, Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) president Md Jashim Uddin on Thursday said that Bangladesh can be a manufacturing or production hub in South Asia owing to its geographical location and big consumer market.

He made the remarks while addressing a brief on Bangladesh Business Summit 2023 to be held on March 11-13 at Bangabandhu International Conference Center (BICC) in Dhaka.

The time is ripe to turn Bangladesh into a manufacturing hub.

The manufacturing sector “matured” in Europe and North America many decades ago. Now the cost of manpower has started increasing in China. It’s transitioning into hi-tech. It’s time for Bangladesh to pursue potential investors to invest in Bangladesh. The advantages that China has enjoyed in attracting manufacturing units, as explained by trade economists, may be relevant for Bangladesh in the coming days.

Bangladesh’s industrial policy must aim at boosting the manufacturing sector, providing a basis for the constant creation of jobs and quick absorption of skilled and semi-skilled workers.

We believe that the higher-ups should redesign the way things are done in Bangladesh. The economy is still structured in a way that our industries thrive as much, if not more, on policy concessions and subsidies as on competitive efficiency. This will have to change if the country wants to graduate from a quasi-agrarian, quasi-industrial economy to a genuine industrial economy. Industrial economies of today use inputs and raw materials from both agricultural and industrial sectors in the most efficient ways for producing finished consumer and industrial products.

If our industries learn to use inputs and raw materials more efficiently and modernise their production processes, there is no reason why the country cannot come up with internationally competitive brands of finished industrial goods.

Bangladesh needs a constant flow of Foreign Direct Investment (FDI) because the country offers well-developed infrastructure facilities, a cheap labour force, a lucrative tax policy etc., and yet FDI is not coming the way it is expected by the government.

The cost of setting up a business in terms of delays in getting permission from different government offices is a factor that needs to be looked into if we want to attract FDI. Often foreign investors express their frustration at bureaucratic obstacles they face in getting important documents like a land deed, trade licence, TIN, clearance from the department of environment, electricity connection, port clearance of capital machinery and raw materials, water and gas connection etc.

The business community of the country has been asking for a more enabling environment and business-friendly policy, which can be ensured through political and macro-economic stability; sound policy and regulatory framework supported by relevant institutions; enforcement of laws and regulations; and building of adequate infrastructure.

But, despite all these, things concerning private sector investment have not improved in the last five years. Bangladesh has a huge workforce and the cost of labour is still low. The only disadvantage is that the skill level of the workers is not quite up to the mark. We urge the government to take the necessary initiatives in this regard.