A senior World Bank official said the cost of transporting goods from factories to consumers in Bangladesh consumes 16% of GDP, much more than the global average of 10% which weakens trade competitiveness and discourages investment in Bangladesh.
Nahid Babi, Senior Transport Specialist at the World Bank’s Dhaka office, made the remarks at the Logistics Landscape challenges, Way Forward event held in Dhaka. He also said that inefficient transportation systems account for 35-54% of logistics costs, while fragile infrastructure is so vulnerable that even moderate rainfall can cause delays on highways and terminals.
According to him, he has identified more than 62 regulatory barriers, many of which can be addressed through improvements to offset the financial costs. He also spoke about important issues such as digitalization, multimodal connectivity, timely project implementation, and development of logistics skills. He also suggested the creation of a national logistics council to ensure all agencies work together.
Meanwhile, senior Secretary of the Ministry of shipping Mohammed Yousuf said that the Bangladesh government wants to complete a national logistics policy within a month to improve port and transport infrastructure, attract more foreign direct investment (FDI) and remove export barriers. Meanwhile, an action plan model has been developed by incorporating the draft strategy into a corporate sector controlled by the ministry, and 62 coordination issues have been identified and outlined through various organizations.
Here Mohammed Yousuf shows that Bangladesh received only US$3 billion in FDI in 2023, which is much less than Vietnam’s US$ 18 billion and India’s US$250 billion. Bangladesh Network Manufacturers and Export Association President Muhammad Hatem expressed concern that Bangladesh may not achieve its $100 billion export target due to weak management practices, medium-term damage and illegal payments. He also advised the Ministry of shipping to lead the implementation of the lifting of restrictions on foreign ownership of logistics.
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