TRANSPORTATION costs, the largest direct logistic costs in Bangladesh, would be up to 35 percent lower if there were no congestion on roads, said a World Bank report. Bangladesh needs to improve its transport and logistics systems to meet the needs of its growing economy and to boost export growth, said the report titled “Moving Forward: Connectivity and Logistics to Sustain Bangladesh’s Success”.
Communications infrastructures are vital to a nation–it is the blood vessels through which the economy moves. So it’s no secret that congestion on roads and at Seaports, high logistics costs, inadequate infrastructure, one-sided logistics service markets, and fragmented governance hamper manufacturing and freight thus eroding Bangladesh’s competitive edge and putting its robust growth path at risk.
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 garment and textile, which accounts for 84 percent of its total exports. It would allow the country to expand into new markets and diversify its manufacturing and agriculture products.
The country could significantly boost export growth, maintain its position as a leading garment and textile manufacturer, and create more jobs by making logistics more efficient. By making its logistics more efficient, Bangladesh can significantly optimise its connectivity, business environment and competitiveness, and put the country on the right path to become a dynamic upper middle-income country.
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. So we should improve and increase our infrastructural capacity— build more and better quality roads and improve the congestion in our main ports by improving their capacity to ship and off-load more containers. At the same time we should also improve our administrative capacity so that firms face less hassle in the form of corruption which is closely tied to red tape in our country. A combination of both is crucial towards catapulting our country into a more developed one.
