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DCCI Reaction on National Logistics Policy
Bangladesh has achieved what many call a development miracle, evolving into a burgeoning economy while consistently recording over 6% growth per annum over the past decade. Despite this progress, the country has traditionally been ranked low in terms of the cost of doing business. As Bangladesh transitions from Least Developed Country (LDC) status, it aims to diversify and strengthen its trade and economic connectivity by 2026, becoming more multidimensional and aiming to be a developed economy by 2041. In this connection, International think-tank’s estimated the need of $608 billion infrastructure investment by 2041. However, infrastructure and logistics challenges remain a significant concern. An integrated, seamless, and reliable logistics system can address these issues, attract foreign investment, and foster greater global interest in Bangladesh. In this regard, the logistics policy recently endorsed by the government of Bangladesh is a key step forward and has been widely praised by the private sector.
It's worth mentioning that this is one of the first private sector demand policies in Bangladesh as of now, formulated with significant involvement and participation from the private sector. From this perspective, the policy is distinctly oriented towards the private sector, being among the few in Bangladesh primarily steered by private sector interests, efforts and research insights throughout its development process. If this logistics policy is implemented, Dhaka Chamber expects it will significantly reduce the cost of doing business in Bangladesh also encouraging substantial infrastructure investment in the country. Investing in the logistics infrastructure sector is believed to yield significant returns, with each Dollar invested potentially generating significant multiples.
Thus, in order to achieve the significant infrastructure investments needed for Bangladesh to become a developed country by 2041, this policy stands as a crucial and timely initiative. Dhaka Chamber believes for the policy to have a meaningful impact on the economy, a clear financing strategy is necessary. This would enable the private sector and investors to understand how infrastructure investments will contribute to the overall health of the economy. Consequently, Dhaka Chamber underscores the importance of incorporating a clear roadmap for investment and infrastructure development financing within the policy framework.
Dhaka Chamber feels PPP budget process needs to be in line with the annual objective of Logistics policy. The process should include annual targets for priority logistics projects, to be originated through the involvement of concerned line ministries and the private sector. In addition, financing of logistics, specifically infrastructure, requires access to long-term debt as well as equity financing. Public sector entities can be funded either from budgetary resources or through payment assurances of different forms.
In considering the national interests, these issues in the proposed policy before it is finalized or effective. Historically, Bangladesh's infrastructure and logistics financing have relied heavily on external sources. Considering the current economic challenges, incorporating clear and sustainable infrastructure financing mechanisms in the new policy will significantly benefit all stakeholders, especially the private sector and provide a substantial boost the overall economy. A comprehensive policy with a focus to local and diversified financing will not only enhance the resilience of the infrastructure sector but also make a strong basis for our economic development in future.
Published on: 2024-05-27