Bangladesh Defense
Saif
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Target eight sectors to repair macroeconomic fault lines
The country’s largest employer, agriculture, is stuck at low value-addition, presenting a litmus test for the nation’s diversification push for future growth ahead of its graduation from the least developed country club next year.
Target eight sectors to repair macroeconomic fault lines
Economic review urges long-term institution-building, not short-term numbers
The country's largest employer, agriculture, is stuck at low value-addition, presenting a litmus test for the nation's diversification push for future growth ahead of its graduation from the least developed country club next year.
In number, the farming sector in Bangladesh employs 44 percent of the workforce, while 75 percent of the produce remains unprocessed, according to an economic review.
It says on top of farming, the government should focus on seven other sectors, such as readymade garment, automotive industry, electronics, light engineering, IT-based freelancing, semiconductor industry, and human capital.
The authorities should adopt an approach emphasising fixing long-standing macroeconomic wounds and laying the groundwork for the future, according to the review by UCB Asset Management released yesterday.
According to the report, ready-made garment is the backbone of Bangladesh's economy, but it must move into man-made fibres and higher-value segments.
Besides, the country risks being trapped in low-value labour unless it climbs the ladder to semiconductor and IT freelancing.
The asset manager argues that the way forward lies not in chasing headline numbers, but in rebuilding institutions, restoring confidence and strategically diversifying the productive base of the economy.
Opportunities in automobiles, electronics assembly and light engineering are highlighted as realistic next steps, building on existing capabilities and domestic demand.
These sectors, if supported by targeted incentives, quality certification systems and skills development, could integrate Bangladesh more deeply into regional and global supply chains, the report said.
In the automotive industry, the government can consider strengthening backward linkages and developing supply chains for electric vehicles by adopting supporting incentives.
In powering an electronics assembly boom, the country can take lessons from Vietnam's long-term and predictable tax policy in supporting industry, research and development, and human capital development.
There is immense potential in the light engineering sector, but it needs industry-focused vocational training and improved backward linkages.
Apart from these, the report described remittances as the "oxygen" of the economy for its contribution to external stability. Expanding skill-linked overseas employment and offering more attractive, transparent investment options for expatriates are seen as ways to sustain and deepen this vital flow while strengthening foreign exchange buffers.
Underlying all these sectoral strategies is what the report calls a virtuous institutional cycle: building people to build institutions. Investing in education, healthcare and skills is presented not just as a social priority, but as the foundation for stronger governance, higher productivity and inclusive growth.
"Fifty-four years of independence, the country has come a long way and yet the real question remains -- have we, as a nation, done justice to the immense potential this country had to offer?" said S M Rashedul Hasan, managing director and CEO of the asset management company.
"The answer is mostly 'No'," he added.
Only by empowering citizens to demand and uphold accountable institutions, the report says, can Bangladesh escape extractive systems and realise its full potential.
Economic review urges long-term institution-building, not short-term numbers
The country's largest employer, agriculture, is stuck at low value-addition, presenting a litmus test for the nation's diversification push for future growth ahead of its graduation from the least developed country club next year.
In number, the farming sector in Bangladesh employs 44 percent of the workforce, while 75 percent of the produce remains unprocessed, according to an economic review.
It says on top of farming, the government should focus on seven other sectors, such as readymade garment, automotive industry, electronics, light engineering, IT-based freelancing, semiconductor industry, and human capital.
The authorities should adopt an approach emphasising fixing long-standing macroeconomic wounds and laying the groundwork for the future, according to the review by UCB Asset Management released yesterday.
According to the report, ready-made garment is the backbone of Bangladesh's economy, but it must move into man-made fibres and higher-value segments.
Besides, the country risks being trapped in low-value labour unless it climbs the ladder to semiconductor and IT freelancing.
The asset manager argues that the way forward lies not in chasing headline numbers, but in rebuilding institutions, restoring confidence and strategically diversifying the productive base of the economy.
Opportunities in automobiles, electronics assembly and light engineering are highlighted as realistic next steps, building on existing capabilities and domestic demand.
These sectors, if supported by targeted incentives, quality certification systems and skills development, could integrate Bangladesh more deeply into regional and global supply chains, the report said.
In the automotive industry, the government can consider strengthening backward linkages and developing supply chains for electric vehicles by adopting supporting incentives.
In powering an electronics assembly boom, the country can take lessons from Vietnam's long-term and predictable tax policy in supporting industry, research and development, and human capital development.
There is immense potential in the light engineering sector, but it needs industry-focused vocational training and improved backward linkages.
Apart from these, the report described remittances as the "oxygen" of the economy for its contribution to external stability. Expanding skill-linked overseas employment and offering more attractive, transparent investment options for expatriates are seen as ways to sustain and deepen this vital flow while strengthening foreign exchange buffers.
Underlying all these sectoral strategies is what the report calls a virtuous institutional cycle: building people to build institutions. Investing in education, healthcare and skills is presented not just as a social priority, but as the foundation for stronger governance, higher productivity and inclusive growth.
"Fifty-four years of independence, the country has come a long way and yet the real question remains -- have we, as a nation, done justice to the immense potential this country had to offer?" said S M Rashedul Hasan, managing director and CEO of the asset management company.
"The answer is mostly 'No'," he added.
Only by empowering citizens to demand and uphold accountable institutions, the report says, can Bangladesh escape extractive systems and realise its full potential.
