Author/s:

Louis, R.
Islam, S.

Publisher:

Green Growth Knowledge Platform

Year of Publication:

2019

Abstract

Bangladesh is at a critical stage in its development, being now listed as a middle-income country, and looking to reach upper-middle income status by 2021. Key to this change is the expanded growth of GDP from its stable 5-6% current growth, to a 7.5 – 8% level which is seen as being integral to the country’s continued progress. To reach the next level, Bangladesh will need to overcome a number of constraints to continue on its export-led growth path.

These are,

  • insufficient supply of reliable energy,
  • policies that indirectly stunt the development of economic activities unrelated to readymade garment exports, and
  • insufficient security about property and land rights due in part to inadequate registry systems .

It is the first of these points that this paper is most interested in. The lack of a reliable electricity supply in Bangladesh has blighted economic development, and the impending shortage of natural gas compounds the difficulties in resolving this issue.

Up until this point, Bangladesh’s economic growth has been maintained by labour-intensive industries such as the garment industries. However, economic theory and history of international development shows us that a structural change in the economy is necessary to foster diversification and subsequent growth of high value-added industries. The country will continue to depend on its ‘traditional’ industries such as Readymade Garments (RMG) but the new industries are predicted to grow and eventually take them over, with the eventual emergence of higher value industries. To facilitate this change – due to the energy intensive rather than labour intensive nature – the energy consumption of the industrial sector is expected to rise rapidly and exponentially.

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