Business Environment · Capacity Building · Economy of Bangladesh · Industrial Development · Industrialization · Infrastructure Development

Industrial infrastructure development for sustainable economic growth

Industrial infrastructure development for sustainable economic growth

Md. Joynal Abdin

Published by the Independent on April 25, 2018

Infrastructure refers to the basic facility required to run the daily life of the citizen of a country or city like roads, bridges, tunnels, water supplies, sewers, electricity, gas, telecommunication system, cellular network, internet connectivity and broadband speed etc. Infrastructures are primarily classified into two brad heads namely, hard infrastructures like transportation networks like roads, airports, sea ports or river ports, railroads etc. and soft infrastructures like education system, healthcare system, law and order situation, financial system, form of government, financial service and government responses to the civil emergency etc. of a country. Bangladesh has primarily graduated from the LDC list this year and hopping to be sustainably graduating into developing countries list by 2024. To fulfill that mission we have to fight few socioeconomic inconveniences like providing employment to the existing unemployed as well as new comers in this category, improve infrastructure (hard and soft) facilities, transform the economy from agricultural based into industrialised one.

Transformation of Bangladesh economy from agricultural to an industrialised one has  started naturally during last couple of decades. For example contribution of Agriculture, Industry and Service Sector to Bangladesh GDP in 1972 (soon after the independence) was 59.60 6.06 percent and 34.32 per cent respectively. In the year 1980 contribution of the same sectors to Bangladesh GDP was 31.55 percent (Agriculture), 20.63 percent (Industry) and 47.81 percent (Service). Current contribution (2016) of Agriculture reduced into 14.77, Industry and Service Sectors increased into 28.76 percent and 56.45 percent respectively. From the above statistics it is clear that, Bangladesh economy is transforming from agricultural economy into industrial economy, but the transformation speed is too slow. Questions may be asked that, why this transformation is necessary. This transformation is necessary because per acre agricultural land a highest threshold of production. After that particular threshold further growth in agriculture is not possible. On the other hand productivity of the same size of industries is much higher than that of agriculture.

Secondly, there are above 3 million unemployed (workable) populations in Bangladesh, another 2 million newcomers are adding with this number as fresh job seekers. But Bangladesh is experiencing a job less growth during last couple of years. As a result burden of unemployment in mounting up day by day. Government alone is unable to create employment opportunities for such a huge number of citizens. Therefore; industrialisation is the most suitable options for employment generation, increasing GDP growth, enlarging export basket and finally sustainably graduating into a middle income developing country. To speed up industrialisation movement government initiated some initiatives like the honorable Prime Minister herself seat in a forum called National Council for Industrial Development (NCID), Ministry of Industries is providing secretarial support to this council. Among others Bangladesh Small and Cottage Industries Corporation (BSCIC) and SME Foundation are working to facilitate entrepreneurship development and industrialization in the country. But due to lack of industrial infrastructure facilities Bangladeshi industrialisation movement is not getting momentum. Now come to the points what is industrial infrastructure? And why these are important to increase industrialisation movement of Bangladesh?

Industrial Infrastructure is a set of physical facilities essential for healthy operations and further growth of the industrial operations in a country or city. Industrial infrastructure is also known as commercial infrastructure. Industrial Infrastructures of Bangladesh could be described as follows:

  1. Aviation Facilities: There are three international and seven domestic Airports in Bangladesh. These are Hazrat Shahjalal International Airport, Shah Amanat International Airport, Osmani International Airport (International), Cox’s Bazar Airport, Jessore Airport, Shah Makhdum Airport, Barisal Airport, Ishurdi Airport, Saidpur Airport, and Comilla Airport (Domestic). This number of only 10 airports is self descriptive that most of the districts of Bangladesh are out of air network. Airport facilities, security systems, cargo handling etc. capacity are very limited to offer a full sewing aviation service for tomorrows Bangladesh. About nine airlines operators are operating local and international flights in Bangladesh but the national carrier Biman is a losing concern. Bangladesh has a very small network of destinations connected by direct flight and cargo transport facility. This network has to be broadened and air cargo service destinations have to be enlarged to fulfill increasing demand of tomorrow’s industrialisation.

  1. Roads and Highways: Bangladesh has 3.33 lac kilometers of road network. Maximum lengths of this network are Upzila, Union and Village level road. Condition of only 19.46 per cent is good, 37.47 per cent is fair and rests are poor and very poor. Among 3.33 lac kilometers of roads national highways are only 3.5 thousands kilometers. But Dhaka Chittagong Highways (215 kilometer) carries above 60 per cent of Bangladesh’s commercial traffic and 27 per cent passengers of the country. Therefore traffic jam is a regular phenomenon here in this highway. An alternative roads between Dhaka and Chittagong is the necessity of time to promote hassle free transportation of export oriented goods and imported raw materials to and from the busiest port i.e. Chittagong port. Economic importance of Dhaka – Chittagong port is more than all other roads and highways of the country. Government has a plan to make Dhaka-Chittagong Economic Corridor functional. It would help to uplift living standard of the linked cities like N.Gonj, M.Gonj, Comilla, Feni etc. SEZ going to be established besides Dhaka Chittagong Economic Corridor like AMEZ, API Industrial Parks, and Mireshwrai SEZ etc. would be pieces of diamond of this economic corridor.

  1. Railway: There are only 2.87 thousands kilometers of railroads in Bangladesh. Most of the cities are out of rail network and its service. It is one of the busiest modes of transport in Bangladesh but losing concern due to some hidden reason. Railway could be a safe and quickest mode of transport for passengers as well as goods in Bangladesh. New railroads have to be constructed and operated in commercial mode. Government can open up this sector for private investment like the cellular phone sector. Private Investment can develop this sector and make it profitable. Mode of private investment in this sector could be BOO (build, operate and own) or BOT (build, operate and transfer) under the PPP modality.

  1. Land Ports: There are 23 Land Ports in Bangladesh namely Benapole Land Port, Burimari Land Port, Akhaura Land Port, Bhomra Land Port, Tamabil Land Port, Darshana Land Port, Belonia Land Port, Gobrakura-Karaitali Land Port, Ramgarh Land Port, Sonahat Land Port, Tegamukh Land Port, Chilahati Land Port, Daulatganj Land Port, Dhanua Kamalpur Land Port, Sheola Land Port, Balla Land Port, Sonamosjid Land Port, Hili Land Port, Banglabandha Land Port, Teknaf Land Port, Bibirbazar Land Port, Birol Land Port and Nakugaon Land Port to carry its import and exports from the neighboring countries through road transports. Infrastructure facilities in most of the land port are measurable. Carrying goods to or from most these land port is till horrible experience for the businessmen. Storage facilities, Road condition, Customs stations and other important institutions in these land port has to be developed to make these functional and effective.

  1. Sea Ports: There are only three functional sea ports in Bangladesh i.e. Chittagong Port, Mongla Port and Paira Port. A large number of private or specific service oriented port facilities are there in different locations. About 92 per cent of maritime trade traffic of Bangladesh goes to a single port i.e. The Chittagong Port. Therefore traffic congestion in Chittagong Port is rising day by day. It is increasing hidden cost of doing international business through Chittagong port. A deep sea port is under process to ease maritime trade of Bangladesh. But delay in decision making related to deep sea port may increase threats to Bangladeshi maritime trade i.e. import or export in near future. Because we have a target to increase our export volume to USD 50 billion in 2021. Current export of USD 35 billion is making congestions in our major ports how they can handle additional USD 15 billion trade by existing capacity? Not only sea ports, government have to go for capacity building of all the existing river ports of the country to make trade goods transportation comfortable through river channels. River ports activation could ease traffic jam in roads and highways too.

  1. Electricity, gas, coal, oil and renewable energy: Currently Bangladesh is generating about 10 thousand megawatt of electricity per day. This generation is fighting to supply adequate amount of electricity to the existing industries. But when 100 SEZs will be commissioned with full range of factories then what would be the demand for electricity, gas, coal, oil and other forms of energies. This could be a major challenge to make our dream into reality. All the renewable energy sources could be unable to supply the demanded amount of energies. Therefore before making land boundaries of all the SEZs, Industrial Parks, Industrial Areas and Clusters we should work out how much different forms of energies could be demanded by all these industrial states, SEZs, and industrial clusters. Do we have enough preparation for that?

Finally we could state that, we are running towards a very lucrative goal but have to be prepared enough to achieve it and feed its demands too. Not only the above mentioned industrial infrastructures (hard) Bangladesh has to supply required soft infrastructures too to make 100 SEZs functional, to sustain as a developing nation after erosion of all the existing trade preferences from 2024 and  onwards.

Private sector investors could be engaged actively to develop all of the industrial infrastructures (hard & soft) under PPP or BOO or BOT etc. modalities.

Government should open up all of the industrial infrastructure development relevant sectors for private investors to contribute. Otherwise government alone may not be in a position to supply resources for all these and measurable pain of bounce back to the LDCs could be the end result.

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