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Published:
2019-11-13 15:43:58 BdST

Better logistics can help Bangladesh boost exports: WB


FT ONLINE

Bangladesh needs to improve its transport and logistics systems to meet the needs of its growing economy and boost export growth, said a new World Bank report launched on Wednesday.

The report – Moving Forward: Connectivity and Logistics to Sustain Bangladesh's Success – was launched at a hotel in the capital.

It points out that by making logistics more efficient, Bangladesh can significantly boost export growth, maintain its position as a leading ready-made garment and textile production, and create more jobs.

The report notes that congestion on roads and seaports, high logistics cost, 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.

“Bangladesh’s congested transportation and often unsophisticated logistics systems impose high costs to the economy,” said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan.

“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.

The report argues that efficient logistics has become one of the main drivers for global trade competitiveness and export growth and diversification. For Bangladesh, improving its logistics performance provides an opportunity to increase its world market share in garments and textiles, which account for 84 percent of its total exports, expand into new markets, and diversify its manufacturing and agriculture into high-value products.

It notes that improving Bangladesh’s logistics requires a system-wide approach based on greater coordination among all public institutions involved in logistics and with the private sector, increasing the effective capacity of core infrastructure, and removing distortions in logistics service markets to reduce costs and improve quality.

At a regional level, harmonising its logistics systems and aligning its customs with that of its neighbours could turn Bangladesh into an important node for regional freight flows and further boost its trade.

“There's no doubt that reforms and investments for better transport and logistics will yield Bangladesh substantial economic benefits and strengthen its competitive advantage,” said Matias Herrera Dappe, Senior Economist at the World Bank and author of the report.

“But the solution to logistics is not just to invest more but to invest better, by focusing on the service gap, and creating the incentives for high quality and competitive logistics services," he said.

As the chief guest at the programme, Dr Mashiur Rahman, economic affairs adviser to the Prime Minister, said they are facing a problem since Dhaka is at the centre of all activities including administration and business.

Transportation cost is also rising, he noted.

He said India had proposed to use Chattogram and Mongla ports. “The proposal is at the initial stage,” he said.

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