Bangladesh is undergoing significant political changes and facing economic challenges. The interim government's actions and the upcoming elections will be crucial in shaping the nation's future trajectory.The socio-economic dimensions are being influenced by a complex interaction of political decisions, economic realities, and social issues. It would be pertinent to refer to the existing scenario in terms of different dimensions.
a) Poverty and inequality: Bangladesh has made considerable progress in reducing poverty, with significant reductions in the poverty rate in recent decades. However, poverty remains a challenge for a large segment of the population, particularly in rural areas.
Income inequality has been a growing concern, with the richest 10 per cent of the population holding a disproportionately large share of national wealth. The disparity between rural and urban areas is also stark, with urbanisation contributing to increased wealth concentration in cities like Dhaka.
b) Education and employment: Education has improved dramatically in Bangladesh, with a high literacy rate for women compared to that in the region. However, the quality of education remains uneven, and many students in rural areas still lack access to high-quality resources. The job market is increasingly competitive, with a focus on skilled labour. The youth population also faces challenges in securing well-paying jobs, as the economy moves towards automation and within this matrix, digital skills are becoming increasingly essential. Such a paradigm and the lack of adequate vocational training also hinder employment prospects for many.
c) Women's Rights and Gender Equality: Bangladesh has made significant strides in improving gender equality, particularly in education and health. The participation of women in the workforce has also grown. In this context, there is the need to mention that the previous government had sincerely tried to advance women's rights and had taken the initiative to introduce laws related to workplace harassment and providing maternal health care. However, gender-based violence, child marriage, and discrimination in the workplace remain issues. Women's representation in politics, though increasing, is still far from equal.
d) Health and Life Expectancy: Bangladesh has made reasonable improvements in public health, particularly in child health and life expectancy. The country has also drastically reduced child mortality rates and increased life expectancy due to better access to healthcare services and sanitation. However, there is a significant urban-rural divide in healthcare access, and the healthcare system is often overstretched. The COVID-19 pandemic highlighted the vulnerability of the healthcare system, especially in the rural regions.
e) Migration and Remittances: Remittances from Bangladeshis working abroad has become a key driver of the country's economy. Millions of Bangladeshis, particularly from rural areas, migrate to the Middle East, Southeast Asia, and beyond for better employment opportunities. Remittances have provided crucial financial support to many families. However, economic analysts have pointed out that the dependency on remittances can also contribute to economic vulnerabilities, especially in times of global economic downturns.
f) Climate Change and Environmental Issues: Bangladesh is one of the most climate-vulnerable countries, with flooding, cyclones, and river erosion threatening millions of people. The impacts of climate change, particularly on agriculture and coastal communities, are severe. The country has faced five cyclones during 2023-2024. Cost of calamities and disasters have inflicted US$ 3 billion loss on Bangladesh annually and according to 'German Watch' more than 6.3 million people were affected last year. Climate-induced displacement is already a reality, with large numbers of people moving from rural areas to cities in search of safety and better living conditions, which further strains urban resources.
g) Urbanisation and Infrastructure Development: The rapid growth of Dhaka and other urban areas has led to overcrowding, inadequate housing, and strained infrastructure. While there has been significant investment in infrastructure, such as roads and bridges, the pace of urbanisation appears to have outstripped the existing ability of relevant authorities to provide necessary public services, such as sanitation, water, and electricity. Rural areas are particularly facing challenges in terms of connectivity and infrastructure, although there are initiatives aimed at rural development.
h) Agriculture and Rural Development: Agriculture remains the backbone of Bangladesh's economy, employing a large proportion of the population, but this sector is facing challenges such as climate change, land fragmentation, and outdated farming techniques. The government is trying to promote sustainable agricultural practices, but smallholder farmers remain vulnerable to market fluctuations and natural disasters. Rural development initiatives, it needs to be understood, are key to addressing these issues, but infrastructure and financial support for farmers remain insufficient.
In the socio-economic realm, Bangladesh is both progressing and facing significant challenges. While poverty and inequality are reducing, large disparities still exist, particularly between urban and rural areas, as well as across gender lines. Employment and education reforms, along with addressing climate change, will be key to improving the overall quality of life for all citizens. The current political and economic changes also play a pivotal role in shaping the future trajectory of the country's socio-economic landscape.
i) Energy and Transportation Sectors: The energy and transportation sectors are undergoing significant transformations, driven by both domestic needs and external pressures. One needs to refer here to some current developments.
Bangladesh's growing industrialisation and urbanisation have significantly increased the demand for energy. Despite progress, the country still faces challenges in meeting this demand, particularly during peak hours. The relevant authorities appear to be working on expanding the power generation capacity through new plants and initiatives to reduce energy shortages. However, the country is still heavily reliant on natural gas for electricity generation, which poses challenges regarding supply and sustainability.
Bangladesh's natural gas reserves have been declining, and the country is facing a shortage of domestic gas supplies. This has resulted in a reliance on imported liquefied natural gas (LNG), which adds to the cost of energy production. It is true that in recent years, Bangladesh has made efforts to develop its LNG infrastructure, with terminals like the one in Moheshkhali to handle LNG imports, but the overall supply chain is still vulnerable to international market fluctuations.
The pertinent authorities have been focusing on renewable energy as part of its long-term strategy to diversify energy sources. Solar energy, in particular, has gained traction, with Bangladesh being one of the leading countries in off-grid solar installations. The country has set ambitious targets for expanding renewable energy sources, aiming for 10 per cent of its electricity to come from renewables by 2025. Wind and biomass energy are also areas of interest. However, movement forward within this dimension through large-scale renewable energy projects is facing challenges relating to financing, technology, and infrastructure. The power sector has undergone reforms to improve efficiency and distribution, including initiatives to reduce transmission and distribution losses. However, the sector still faces financial challenges, as electricity tariffs have been a politically sensitive issue. The government has introduced subsidies to keep electricity prices low for consumers, but this has strained the finances of state-run utilities.
Such a dimension has led Bangladesh to seek increased energy cooperation with neighbouring countries like India and Nepal and also securing access to imported energy and engaging in cross-border power sharing. This includes agreements to import electricity and natural gas. Bangladesh is also working on improving its energy infrastructure and access to facilitate its trade potential within the region. One can only hope that such an effort will see success in not too distant future.
There is also another significant dimension that needs to pursued with care - the transportation sector. The sector includes- Road Transport, Public Transport and Mass Transit, Railways, Ports and Shipping and Aviation.
a) Road Transport: The road transport sector is under strain due to rapid urbanisation and increasing vehicular traffic. Dhaka, the capital city, is infamous for its traffic congestion, which hampers productivity and quality of life. While there has been significant investment in roads, bridges, and highways, urban transportation is still inefficient, with a reliance on small vehicles like auto-rickshaws, buses, and private cars. The bus and public transport systems remain largely unregulated, contributing to overcrowding and delays.
b) Public Transport and Mass Transit: The government has initiated projects to improve mass transit, including the Dhaka Metro Rail project, which aims to ease traffic congestion by offering a modern urban transport option. The first phase of the metro line is expected to be operational in 2026. In addition to the Metro, the government is also investing in expanding the bus rapid transit (BRT) network and improving intercity bus services. However, there is a lack of coordination between different forms of transport, which limits the efficiency of the system.
c) The government is working on modernising the railway system, including the purchase of new trains and improving rail lines for better connectivity between urban and rural areas. This is being done because railways are particularly important for transporting passengers and goods over long distances. Nevertheless, the current system is fraught with issues such as overcrowding, lack of punctuality and safety concerns.
d) Ports and Shipping: Bangladesh is heavily dependent on its ports for trade, especially the Chittagong Port, which handles the majority of the country's import and export activities. The government has been investing in expanding and modernising port facilities, but congestion and inefficiencies still pose challenges.
We may conclude with the following observations. Bangladesh's energy and transportation sectors are evolving rapidly, but they still face significant challenges. In energy, there is a push for diversification and renewable energy, while the transportation sector is working to improve urban mobility and expand infrastructure. These sectors will be key to Bangladesh's future economic development, and how the government addresses the sustainability, efficiency, and resilience of both will shape the country's growth trajectory.
Muhammad Zamir, a former Ambassador, is an analyst specialised in foreign affairs, right to information and good governance.
muhammadzamir0@gmail.com
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