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Effective connectivity with Chittagong Port through bypass roads and land ports may increase Padma Bridge’s contribution to GDP to 3 per cent instead of projected 1.7 per cent gradually, Zahid Hussain, former lead economist of the World Bank, Dhaka, told The Business Post’s Ibrahim Hossain Ovi in an exclusive interview
How will the Padma Bridge opening immediately impact Bangladesh’s economy?
Whatever the research statistics show about the economic outcome of Padma Bridge, regardless of figure, it will contribute a lot to economy as well as bring changes in the lives of people and businesses mostly in south and southeastern regions.
The contribution of the mega projects will continue years after years but it will not happen overnight. It will happen gradually.
It will create immediate impacts on trade and commerce in south and southeastern regions as the connectivity will reduce time and cost of transportation making business cost effective.
The opening of the bridge will reduce time of transportation for a truck by 10 hours. It will bring benefits in two ways by cutting cost and saving time.
Now, producers of goods will not have to depend on local markets rather they can reach capital and other parts of the country shortly.
Farmers who produce vegetables and fish will be mostly beneficiary as they can be able to deliver products within a short span of time.
On the other hand, manufacturers of Dhaka and Narayanganj will be able to grab the markets of south and southeastern regions very easily due to the connectivity.
Thus, the two-way trades will increase business volume and value which will eventually contribute to country’s GDP growth.
Existing production capacity will be used to grab more market as the connectivity will cut time and cost. On the other hand, businesses will be relocated in the southern part of the country with the land price going up.
How much will the Padma Bridge contribute to GDP?
There is criticism that Padma Bridge will not be able to reap the benefits as projected unless the other trade-related bottlenecks are resolved.
These critics are skeptical and I think their perception is wrong.
We can expect 1.2 per cent to 1.7 per cent GDP growth because of the Padma Bridge. This contribution to GDP will continue till the bridge remains functional.
If the government can resolve the existing barriers such as connecting Chittagong avoiding Dhaka through bypass roads and other land ports the projected 1.7 per cent contribution to GDP could easily be 3 per cent.
Which sector to see immediate boost in business?
The country’s tourism sector will have a great boost immediately just after the opening of Padma Bridge.
To be entertained people like to travel and choose places where there is comfort and which is less time consuming and offers hassles free transportation.
In ferry-based communication tourists suffer a lot due to time-consuming river crossing and river-based transportation to visit Bagerhat, Kuakata and Sundarbans. Tourists feel bored as it takes at least four hours to cross the river and for which people do not prefer those areas.
As the bridge cuts time, people will visit those areas more, while the people living in the southern part will travel to Coxs’s Bazara, Rangamati and hill tracts areas.
In addition, there will be more tourist spots centering around the Padma River. We have already learnt that a good number of investors are building hotels, motels and resorts.
Investment opportunities
In case of new investment, investors will consider the regions for investment as land price is comparatively low and available. This is because of connectivity created by the bridge, which offers low cost and easy transportation.
For factory relocation investors will consider the southern region as the lead time will come down at least by 10 hours.
So, why will people buy land at a higher cost in Dhaka or its adjacent areas to build their factories?
Infrastructural difficulties are big obstacle in the way of investment. Tax system, business registration process and regulatory issues are also there.
So, there will not be immediate impact on investment but in long terms there will be huge investment opportunities centering the Padma Bridge connectivity.
However, the existing business potentials in the southeast region can fully be utilized. We cannot predict how much investment will be there or when it will be done but it is pretty sure that investment will be there and will continue.
The Padma Bridge will remove infrastructural deficit which is smart enough to trigger investment.
I think we should remove other regulatory barriers in attracting investment.
What kind of impacts will the bridge have on regional connectivity and business?
Impacts of the much-talked-about bridge on regional trades and connectivity will depend on the border management. The bridge has created potentials and we have to cash in on it by modernizing customs, harmonizing tax systems and other issues. If it is done, Bangladesh will enjoy a multipronged effect on trades and connectivity.
Do you see any possible threat to reaping the benefits?
Extortion is a great problem in transportation sector. If there is extortion taking the advantage of volume of vehicles plying over the Padma Bridge, business people will be discouraged to make investment, while it may create congestion on both sides.
I think the government should be careful about it. On the other hand, load bearing management, and overall management of the bridge to avoid congestion at toll plaza is very crucial for reaping the benefit. Any kind of corruption in maintaining the bridge could be a great threat, which needs aggressive attention from the very beginning.
