The Center for Policy Dialogue (CPD), a research think tank, has identified three major economic risks that Bangladesh may face over the next two years: inflation, economic recession, and rising poverty and inequality.
Alongside these economic risks, three social risks—unemployment, energy shortages, and a deteriorating health sector marked by increasing cases of heart disease, cancer, and diabetes—were also highlighted.
These insights were shared by Dr Khondaker Golam Moazzem, CPD's Research Director, during the presentation of a paper titled "Business Environment Reform in Bangladesh: The Agenda of the Interim Government" at the BRAC Center in Dhaka on Sunday.
Business environment: 17 major challenges
The CPD identified 17 barriers disrupting the business environment in Bangladesh, including: Corruption, bureaucratic inefficiency, foreign exchange instability, inflation, financial constraints, inadequate infrastructure, policy instability, weak labour force, high tax rates, insufficient innovation capacity, political instability, risky public health, and labour policy limitations.
According to Dr Moazzem, corruption remains the most pressing challenge. While infrastructure issues have somewhat improved, bureaucratic inefficiency and foreign exchange instability have emerged as significant hurdles in recent years.
Inflation continues to be a critical concern, and policy instability has surfaced as a medium-level challenge," said Dr Moazzem.
Competitiveness and economic challenges
The CPD report highlights that Bangladesh lags behind Sri Lanka and India in terms of business competitiveness, reflecting a gap between the economy's growth and its competitive positioning.
The think tank also pointed to critical challenges in the banking sector, discrepancies in growth data, and political uncertainty, all of which are exacerbating production-sector vulnerabilities.
Recommendations for reforms
To address these issues, the CPD made several key recommendations:
1. Modernise NBR operations: Automation of VAT and tax management for greater transparency.
2. Enhance primary education: Extend primary education to Grade 8 and incorporate vocational training.
3. Review special economic zones: Assess their performance and optimize management.
4. Strengthen the financial sector: Introduce an ombudsman to address inefficiencies and disputes.
The Chief Adviser’s Special Envoy for International Affairs Professor Lutfe Siddiqui, CPD Executive Director Fahmida Khatun, BIDA Executive Chairman Chowdhury Ashiq Mahmud Bin Harun, and leaders from FBCCI, FICCI, BKMEA, DCCI, and BTMA also attended the event.
Participants emphasised the urgency of addressing systemic inefficiencies to create a robust, competitive, and equitable economic environment.