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Power, access to finance, corruption, informal sector and taxes are cited as top constraints to growth
Published : 08 Apr 2025, 09:28 PM
Power supply, access to finance, corruption, the informal sector, and tax rates are the five major obstacles to doing business in Bangladesh, according to a fresh report by the World Bank Group.
The report, released on Tuesday, highlights the constraints faced by promising small and medium enterprises (SMEs) and how these barriers are stifling growth.
It warns that these hurdles are enabling a few dominant business groups to control most sectors while emerging firms struggle to expand—and weaker ones eventually shut down.
The findings were presented on the second day of the Bangladesh Investment Development Authority’s (BIDA) investment summit, during a session jointly organised with the World Bank Group.
Martin Holtmann, IFC’s country manager for Bangladesh, Bhutan, and Nepal, unveiled the report titled Country Private Sector Diagnostic (CPSD).
The report suggests that if Bangladesh carries out urgent reforms in four targeted sectors, it could attract significant investment and generate hundreds of thousands of jobs.
Specifically, it said that with appropriate policy measures, the country could create 2.37 million jobs annually through housing construction, alongside 664,000 formal jobs in household paint and dye manufacturing.
In the digital financial services sector, reforms could yield between 96,000 and 460,000 new jobs, it said.
The report identified four sectors where targeted policy steps could unlock private investment potential: green garment manufacturing, housing for the middle class, paints and dyes, and digital financial services.
BIDA Executive Chairman Chowdhury Ashik Mahmud bin Harun said the findings would serve as guidance for formulating the necessary policy and strategic measures to promote private-sector-led growth and sustainable economic development in Bangladesh.
He added: “The interim government is committed to creating a conducive business environment and supporting emerging industries that will generate employment. This report will play a supportive role in achieving that.”
Holtmann said, “As part of the World Bank Group, IFC is committed to strengthening the private sector and driving economic growth in Bangladesh.”
Quoting directly from the CPSD, he said: “The report provides a vital roadmap for Bangladesh’s future growth. It identifies the strategic sectors and outlines the key reforms needed to enhance competitiveness and attract investment.”
“Working together, we can create jobs and opportunities that improve livelihoods and accelerate sustainable economic development in Bangladesh,” he added.
