Bangladesh needs to improve its transport and logistics performance and systems to increase its competitiveness and meet the needs of its growing economy as well as to boost export growth, says a new World Bank report launched on Wednesday.
The report titled ‘Moving Forward: Connectivity and Logistics to Sustain Bangladesh’s Success,’ noted that congestion on roads and in seaports, high logistics costs, inadequate infrastructure, distorted logistics service markets, and fragmented governance hamper manufacturing and freight, further eroding Bangladesh’s competitive edge and putting its robust growth path at risk.
Prime minister’s economic affairs adviser Mashiur Rahman, Guangzhe Chen, global director for the transport practice in the World Bank’s infrastructure practice group, World Bank country director for Bangladesh and Bhutan Mercy Tembon and senior economist at the World Bank and author of the book Matias Herrera Dappe were present at the report launching in the city.
In his presentation, Dappe showed that eliminating congestion could lower logistics costs by 7 per cent to 35 per cent while inefficiencies comprise about 25 per cent of transportation costs.
The report said that logistics costs in Bangladesh were high in most sectors, ranging from 4.5 per cent of sales (for leather footwear) to 47.9 per cent of sales (for horticulture).
The social costs of annual carbon dioxide emissions from inter-district road freight transport in Bangladesh is equivalent to 1.2 per cent of GDP, with almost 60 per cent of the emissions caused by congestion.
For Bangladesh, improving its logistics performance provides an opportunity to increase its world market share in garments and textiles, which account for 84 per cent of its total exports, expand into new markets, and diversify its manufacturing and agriculture into high-value products.
Mashiur said the solution to the transportation and logistics problem should be made in a longer-time perspective and the policy should be for equitable distribution of development.
Later, in the question and answer session, Mashiur said that India was now negotiating with Bangladesh for carrying goods from some places in India to either Chattogram Port or Mongla Port, but that was in the very early stages of negotiation.
Mercy said that Bangladesh’s congested transportation and often unsophisticated logistics systems imposed high costs to the economy.
‘By making its logistics more efficient, Bangladesh can significantly optimise its connectivity, business environment, and competitiveness, putting the country on the right path to become a dynamic upper middle-income country,’ she added.
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