There is no question about Bangladesh’s investment potential. But currently, the most urgent need is to solve the energy problem. The government says it will take two years to fully resolve the energy crisis. The government needs to inform the public what measures will begin now, what the energy mix will look like in two years, and how industries will receive reliable fuel. What is most important in this difficult period is a clear strategic direction.
Energy security needs clearer messaging. Bangladesh has domestic gas and coal resources. US Geological Survey estimates have put the country’s gas reserves at 32 trillion cubic feet. There are also estimates of around 75 years of coal reserves. The question is how we intend to use these natural resources for our energy security and development. The government has to decide whether to generate electricity using domestic coal.
That decision has to be taken today or tomorrow. If domestic coal can meet a large share of electricity demand, pressure on gas will fall, and that gas can be directed to industry. This would increase production while reducing fiscal pressure on the government. Gas exploration must continue as well. We may have around 20 years of gas left. Exploration has to continue, and there is a possibility of finding new gas, according to various reports.
To create an investment-friendly climate, the government needs to present Bangladesh’s energy roadmap — primarily based on domestic gas and coal. Investors planning gas-dependent industries need to see that roadmap.
We need to improve our investment climate and country competitiveness. We are lagging in ease of doing business. Ease of doing business is a chain of various activities. We need to make the entire process efficient and effective. We can make one process efficient, but if other processes remain inefficient, the situation will not improve. This requires a coordinated government effort and an overall strategic roadmap.
Bangladesh’s outlook has improved somewhat. Changes to the bonded system, reforms to advance income tax (AIT), and engagement between the Prime Minister, the government and business organisations have sent positive signals. Finance Minister Amir Khosru Mahmud Chowdhury has recently formed a high-powered deregulation task force, which is another excellent initiative.
The task force’s decisions need to be executed in a timely and effective manner. Therefore, the need for a monitoring and execution body to implement the reforms is very critical.
A reform or execution cell could work continuously against deadlines and coordinate the work among ministries. Ministries are busy with their own routine responsibilities. Leaving reform implementation entirely to them will slow things down.
There needs to be a setup that continuously tracks where a task is pending or delayed. BUILD has been working on deregulation for many years. Often, reforms are delayed due to a lack of oversight and ownership. A platform is required to monitor the reform agenda.
Another major economic reality is the informal sector. There is insufficient data on its true size; there are no estimates of its size. We need to gradually bring the informal economy into the formal one.
But formalisation cannot be forced. It has to begin with incentives. Many businesses avoid trade licences, tax identification numbers or visibility because they fear regulatory trouble. They are operating businesses and creating employment but remain outside the formal system because of the risk of harassment. These businesses generate employment.
Bangladesh faces the central challenge of transforming its potential into effective economic capacity. To achieve this, an aggressive, well-defined strategy is imperative. Concrete, actionable plans are now essential.
Bangladesh’s economy shows resilience with steady growth, driven by garments and remittances. Prospects depend on diversification, infrastructure development and attracting foreign investment. Our youthful population and digital advancements offer significant potential for continued progress if the right strategies are undertaken.
Author is the Chairperson, Business Initiative Leading Development (BUILD). The views expressed in this article are solely based on the author.
