The need for better planning and investment in logistics and infrastructure 
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
MONDAY, MAY 16, 2022
MONDAY, MAY 16, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The need for better planning and investment in logistics and infrastructure 

Panorama

Abul Kasem Khan 
25 January, 2021, 11:40 am
Last modified: 25 January, 2021, 11:51 am

Related News

  • PM Hasina urges US businessmen to boost investment in Bangladesh
  • Bangladesh seeks diversified investment from US
  • Swiss Ambassador Chuard sees 'massive potential' to boost trade, investment with Bangladesh
  • Foreign Minister Momen calls for investment from CICA member states
  • Japanese investors can now take advantage of investing in Bangladesh capital market: BSEC chairman

The need for better planning and investment in logistics and infrastructure 

Mega infrastructure projects such as the Padma Bridge, the Matarbari Hub, and the deep sea-port will open up new opportunities and accelerate our GDP growth. To keep up the momentum, Bangladesh needs to be mindful of the shifting landscape of logistics development and mark the emerging trends.

Abul Kasem Khan 
25 January, 2021, 11:40 am
Last modified: 25 January, 2021, 11:51 am
Abul Kasem Khan. Sketch: TBS
Abul Kasem Khan. Sketch: TBS

On December 29, 2020, a 120-meter long cargo ship from Indonesia crossed the Matarbari channel to reach Bangladesh, auguring progress in developing the eponymous deep sea port project worth BDT 177 billion, and a giant step ahead in improving Bangladesh's logistics and infrastructure development. 

As a country nestled between South and Southeast Asia, Bangladesh has chances of leveraging its geo-economic potential, which requires rapid upgradation of its logistical infrastructure. 

Bangladesh's economy now stands at a crossroads. It's in the middle of its journey towards becoming a developed nation by 2041 and achieving the Sustainable Development Goals (SDGs). Bangladesh's share of manufacturing in its total exports is impressive and surpasses other LDCs by a good margin. However, the current Trade to GDP ratio for Bangladesh is at 35% (120th WEF Report), which is extremely low in comparison to a competitor like Vietnam (200%). 

The COVID-19 has dealt a debilitating blow to economic dynamism everywhere, with export demand facing harsh downward trends. Bangladesh's graduation from LDC by 2024 will lead to loss of many LDC advantages. The country ranked 105th out of 141 countries in the 2019 Global Competitiveness Index of the World Economic Forum. It is now even paramount to overhaul the country's competitiveness by upgrading logistics and infrastructure for trade and investment.  

There are many challenges in Bangladesh's logistics and infrastructure performance, ranging from inefficient port clearances to slow connectivity. The costs of not having a modern logistical system are steep. Our low logistics performance due to unreliable supply chains and inefficient infrastructure is damaging our industrial and business competitiveness, driving up transaction costs. Logistics costs account for as much as 4.5% to 48% of the total sales, depending on the sector in Bangladesh.

Development of modern infrastructure has been a core component of the economic transformation of Asian tigers, including China, in the last few decades. Taiwan and South Korea heavily invested in infrastructure, amounting to around 9.5% of GDP during their period of rapid industrialisation, while for China it was around 8% to GDP until 2003. 

While Bangladesh is at the doorsteps of accelerated growth, we are still far behind India, Vietnam, Indonesia and Thailand in terms of logistics and infrastructure quality. In Bangladesh, investment in physical transport infrastructure investment is around 2% to 3.6% of GDP, which is much lower than the required levels. 

While noting the shortcomings, we cannot however be oblivious to the impressive advancement that has been made in recent years. Under the leadership of our Honourable Prime Minister, Bangladesh increased infrastructure spending almost three times from 2011-12 investment levels. The mega infrastructure projects such as Padma Bridge, the Matarbari Hub, and the deep seaport will be game changers, opening up new opportunities and will accelerate our GDP growth. 

To keep up the momentum and build upon the gains, Bangladesh needs to be mindful of the shifting landscape of logistics development and mark the emerging trends. Today, business competitiveness demands improved productivity, channel expansion, shorter lead time, faster market access, efficient ports, adequate storage and warehousing facilities, etc for an efficient logistics eco-system that could accelerate trade opportunities. 

Digital transformation and e-commerce are taking bigger roles in the supply chain and logistics landscape. We need to have greater automation of ports services, including customs clearances, payments, as well as introducing data-driven processes for decision-making. 

Mega projects such as the Matarbari Hub will open up new opportunities. Photo: UNB
Mega projects such as the Matarbari Hub will open up new opportunities. Photo: UNB

Stronger public-private collaboration and policy coordination would be required to ensure efficient and innovative systems, from warehouse management to plant logistics, including shipping and distribution logistics.

As Bangladesh aspires to reach higher growth projections of double-digit GDP growth, infrastructure investment needs to be further increased to 6-7% of GDP. In the longer-term, UNESCAF projected that Bangladesh, like other Countries of Special needs (CSN) requires investing 10.2% of GDP in sustainable infrastructure to create economic prosperity. 

It is roughly estimated that Bangladesh on average needs around USD 18 to 20 billion per annum, a total amounting around USD 320 billion, in cumulative infrastructure investment. Connecting communities, markets and supply chains nationally, regionally and globally through an efficient logistics system will help create opportunities for jobs, businesses and help distribute wealth across Bangladesh, and help attain many of the SDG priorities as set by the UN.

The planning and policy framework need to be aligned with the priority of mobilising a greater share of investment in a strategic manner. The Perspective Plan 2021-2041 – the government's long-term planning instrument – has designed five strategies to establish a multimodal transportation system to turn logistics infrastructure into a competitive advantage. 

We need an overall national logistic development policy supported by higher investments in infrastructure to reduce costs substantially and increase the country's competitiveness in various areas. To develop the logistics sector through a targeted, coordinated and time-bound manner, a Logistics Master Plan is needed, which should be implemented with close supervision from the highest level.

As it will become difficult for the public sector to maintain the above-mentioned investment level to keep pace with economic growth, a significant share of infrastructure investment needs to come from the private sector under various modalities. 

For ensuring public-private collaboration on logistics and infrastructure development, Business Initiative Leading Development (BUILD), the country's leading private-public dialogue platform, seeks to play a catalytic role. BUILD has already formed a high-powered committee named Logistics & Infrastructure Development Working Committee (LIDWC) under the Prime Minister's Office (PMO) that aims to address the short to long term policy challenges, the required reforms, and various opportunities for the sector.

We feel that deeper engagement of both policy planners and the private sector will enable collaboration towards building a better logistics sector. The working committee already held its first meeting under the chairmanship of Mr Md Tofazzel Hossain Miah, Secretary, PMO on December 23, 2020. 

The following is a five-point charter of recommendations for rapid enhancement of logistics and infrastructure sector in Bangladesh: 

Include logistics as a priority sector for the upcoming Industrial Policy 2021, as suggested by BUILD in the recent Logistics & Infrastructure Development Working Committee (LIDWC) meeting. 

Explore developing alternate financing for infrastructure projects and engaging the private sector in a greater capacity. 

PPP model should be increasingly adopted for infrastructure development.

National Logistics Infrastructure Master Plan (NLIMP) needs to be formulated as a clear roadmap.

Theme-based working groups on logistic sub sectors like warehouse, port, temperature-controlled logistics could be formed inviting experts and stakeholders. 


Abul Kasem Khan is the Chairperson of Business Initiative Leading Development (BUILD), a research and public-private dialogue think tank

Features / Top News

Planning / infrastructure / investment

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • CPD for monthly Tk1,000 allowance for unemployed youths 
    CPD for monthly Tk1,000 allowance for unemployed youths 
  • File photo of Prime Minister Sheikh Hasina/Courtesy
    Make best use of funds in effective implementation of SDGs: PM Hasina
  • Commerce Minister Tipu Munshi. Photo: Collected
    Govt plans to import wheat from 5 countries: Tipu Munshi

MOST VIEWED

  • Shubhash and others like him found employment at a matka factory, located in Mymensingh district’s Haluaghat upazila. Photo: Mumit M
    How matkas were saved from extinction thanks to the dried fish industry
  • Musk has used his Twitter bid to secure more attention for all of the things he doesn’t like about it. Photo: Reuters
    Elon Musk shows some buyer’s remorse with Twitter
  • For Bangladesh, its economic vulnerability is exacerbated further by a lack of economic diversification and export product concentration. Photo: Mohammad Minhaj Uddin
    Bangladesh and the Graduating Commonwealth LDCs
  • Akleh was wearing her flak jacket marked with “PRESS” - which is meant to protect journalists covering war zones from violence and injury. But in this case, it did not. Photo: Reuters
    Died or killed? When language hides the reality of the Palestinian plight  
  • After Suborna and Jhorna, filed their respective RTI applications, the authorities built a concrete installation to ensure regular waste collection (pictured left) and a small road to accommodate an open drain (pictured right) in the Goran area.
Photos: Noor-A-Alam
    Meet the women using RTI to change the face of their neighbourhoods
  • The inconvenient truth that could prevent global famine
    The inconvenient truth that could prevent global famine

Related News

  • PM Hasina urges US businessmen to boost investment in Bangladesh
  • Bangladesh seeks diversified investment from US
  • Swiss Ambassador Chuard sees 'massive potential' to boost trade, investment with Bangladesh
  • Foreign Minister Momen calls for investment from CICA member states
  • Japanese investors can now take advantage of investing in Bangladesh capital market: BSEC chairman

Features

Karst Stone Paper Journal: Write on indestructible stone paper

Karst Stone Paper Journal: Write on indestructible stone paper

51m | Brands
Pesky bugs do not stand a chance against this automatic indoor insect trap

Pesky bugs do not stand a chance against this automatic indoor insect trap

56m | Brands
Wazeenah: Turning furniture into a canvas

Wazeenah: Turning furniture into a canvas

1h | Brands
Shubhash and others like him found employment at a matka factory, located in Mymensingh district’s Haluaghat upazila. Photo: Mumit M

How matkas were saved from extinction thanks to the dried fish industry

2h | Panorama

More Videos from TBS

How can you become proficient as a new team leader?

3h | Videos
Future of newborn baby genome sequencing: Good or Bad?

Future of newborn baby genome sequencing: Good or Bad?

3h | Videos
What Europe-based Fair Wear says about fair price of Bangladeshi cloth

What Europe-based Fair Wear says about fair price of Bangladeshi cloth

17h | Videos
Microplastics found in 5 local sugar brands

Microplastics found in 5 local sugar brands

17h | Videos

Most Read

1
The hostile welcome to Bangladesh
Bangladesh

The hostile welcome to Bangladesh

2
Representative Photo: Pixabay.
Bangladesh

Microplastics found in 5 local sugar brands

3
Mushfiq Mobarak. Photo: Noor-A-Alam
Panorama

Meet the Yale professor who anchors his research in Bangladesh and scales up interventions globally

4
Union Capital asked to return Tk100cr FDR to BATBC 
Banking

Union Capital asked to return Tk100cr FDR to BATBC 

5
Bangladesh gas fields burnt $3m worth of gas in the air in 2021
Energy

Bangladesh gas fields burnt $3m worth of gas in the air in 2021

6
Impact of falling taka against US dollar
Banking

Taka losing more value as global currency market volatility persists

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab