Top 12 Service Sectors in Bangladesh
Md. Joynal Abdin*Thank you for reading this post, don't forget to subscribe!
Co-Founder & CEO of Bangladesh Trade Center
The service sector is the most contributory sector to Bangladesh’s GDP. The contribution of this sector to Bangladesh’s GDP was 41.28% in 1971. Its contribution is rising day by day in 1980 it was 47.81%, in 1990 it was 46.55%, in the year 2000 it was 52.91%, in 2010 it was 56.04% and finally now in 2015 contribution of service sector to Bangladesh’s GDP is 56.34%. Major contributory service sectors are Overseas Employment, Hospitals and Clinic, Tourism, ITES, Amusement, Testing Laboratories, Telecommunication, Transport and communication, Warehouse and container service, Engineering Consultancy, Filling Stations (Petrol pump, CNG conversion Centre, etc.), Chain Super Market/Shopping Mall, and Aviation Service, etc. A brief description of Bangladeshi service sectors is as follows:
- Hospital and Clinic:
The hospital and clinic service sector in Bangladesh is one of the promising sectors of Bangladesh. Local demand is much higher than that of the available supply. Healthcare is available through both the public sector and private sectors. Private hospitals, clinics, and diagnostic centers are run according to a 1982 ordinance. There are more than 8,000 registered private hospitals, clinics, and diagnostic centers in the country . There are 583 government hospitals and 2,501 registered non-government hospitals. There are also many unregistered private hospitals in the country. The total number of beds in the registered private hospitals and clinics is 42,237. Among the 8 divisions, Dhaka division has the highest number of tertiary hospitals followed by Rajshahi with 26 such healthcare facilities. The Government of Bangladesh encourages foreign companies to partner with local companies for producing drugs, especially high-tech and specialized products .
According to the World Health Organization (WHO 2014), only about 3.7% of the Gross Domestic Product (GDP) is spent on health services through both public and private sector expenditures. Life expectancy in Bangladesh is now nearly 70, whereas both India and Pakistan have 65. Although the percentage of GDP being spent on the healthcare sector is relatively higher than it used to be but it is a very small amount compared to developed countries which spend 8 to 12% of GDP. The total government contribution to health expenditure is even lower at 7.8%. However, government expenditure on health is only about 35.3% of the total health expenditure and the rest 64.7% out-of-pocket (OOP) expenses. Inequity, therefore, is a serious problem affecting the healthcare system. There is significant room for market expansion as the country enters lower-middle income status. The fact that more than two-thirds of total health expenditure is out-of-pocket that is privately financed indicates that people are willing to pay for better healthcare.
- Public Sector Hospitals:
There are 53 District Hospitals with 7,850-bed facilities, 11 General hospitals with 1,350 beds, 5 infectious disease hospitals with 180 beds, 22 Medical / dental college hospitals with 11,960 beds, 7 Specialized hospitals with 2,330 beds, and 1 medical university with 1500 beds.
- Private Sector Hospitals:
The private sector can be grouped into two main categories. First, the organized private sector (both for-profit and nonprofit) includes qualified practitioners of different systems of medicine. Second, the private informal sector, which consists of providers practicing in rural areas do not have any formal qualifications such as untrained allopaths, homeopaths, kobiraj. According to Asia Pacific Observatory on Public Health Systems and Policies, there are 2,983 private hospitals and clinics registered as of 2013. The total number of beds provided by the private sector is 45,485 (as of 2013).
- Diagnostic Centers:
Along with private clinics and hospitals, the number of diagnostic centers in the private sector is growing. In 2012, approximately 5,122 laboratories and other diagnostic centers were registered with the Ministry of Health and Family Welfare (MOHFW, 2012). In the private for-profit sector, there are some large diagnostic centers in the cities (Lab Aid, Ibn Sina, Popular, and Medinova) providing laboratory and specialized radiological tests. Some of these facilities maintain a high standard.
- Donors, NGOs, and Professional Groups:
Bangladesh is known worldwide for having one of the most dynamic NGO sectors, with 2,471 NGOs registered with NGO Affairs Bureau working in the population, health, and nutrition sectors (as of 2014). NGOs have been active in health promotion and prevention activities, particularly at the community level, and in family planning, and maternal and child health areas.
Problems of Bangladeshi Hospitals and Clinic Sector:
- Scarcity of healthcare professionals including physicians, nurses, technicians, pathologists and pharmacists etc.
- Rural vs. urban gap.
- Lack of modern equipment and operators.
- Poor management of public sector hospitals.
- The extremely high price of private sector healthcare facilities.
- An increasing number of healthcare professionals along with physicians, nurses, technicians, pathologists, pharmacists, etc. with a priority basis.
- Providing special incentives to rural healthcare professionals.
- Facilitating easy procurement of healthcare equipment.
- Root out corruption in public hospitals.
- Skilled development of the public sector healthcare professionals.
- Fiscal and non-fiscal support should be offered to increase the number of enterprises in the healthcare sector.
- Overseas Employment and Migration:
The migration of unskilled workers is a very much contributory sector to Bangladesh’s Economy. Currently, remittance is the second highest source of foreign currency for Bangladesh’s economy. This trend started during the British Colonial regime in India through the migration few Bangladeshi people into the UK. But after the independence of Bangladesh, this trend increases at a robust speed.
Migration from Bangladesh started in 1976 with a modest number of 6078 . Presently Bangladeshis are engaged in overseas employment in more than 100 countries about 6.07 million overseas workers had been employed in various parts of the world up to October 2016 . 2007 and 2008 were the highest overseas employment years in the history of Bangladesh with a total of 8.32 million and 8.75 million overseas employed populations. But in terms of remittance, 2014 and 2015 are the highest earning years with USD 14.94 billion and USD 15.27 billion remittances yearning respectively.
About 49.65% of Bangladeshi overseas workers are less skilled, 31.75% are skilled, 15.15% are semi-skilled and only 2.3% of them are professionals. Comilla has the highest number of the overseas employed population i.e. about 11% of the total overseas employed population followed by Chittagong at 9.57%, Brambanbaria at 5.22%, Dhaka at 4.48% and Chandpur at 4.16% of the total migrated populations. The top destinations of Bangladeshi overseas workers are the KSA, UAE, Kuwait, Qatar, Bahrain, Oman, Malaysia, Korea, Singapore, etc.
Impact of Overseas Employment and Migration on Bangladesh’s Economy:
- It reduces the prevailing unemployment problem of the country and leads to poverty alleviation.
- The remittances enhance the economic condition of the migrant workers which in turn ensure the overall economic development of the country. This sector earns the highest amount of real foreign currency for the economy.
- Overseas employment helps in reducing frustration among the youths, terrorism, drug addiction, social unrest, etc.
- It develops the capability of investment for self-employment and entrepreneurship.
- For the movement of migrant workers, businesses related to hotels, traveling, transportation, etc. are getting momentum in the country.
- Earning through overseas employment enhances the financial capability and purchasing power of the migrant workers which gears up the economic activities and uplifts the standard of living.
- It enhances the transfer of technology through technical knowledge and expertise acquired by migrant workers working abroad.
- It creates motivation and develops awareness of the migrant workers towards cleanliness, a hygienic environment, the importance of literacy, discipline, etc.
- The major age group of migrant workers is 25-35 years and their overseas stay leads them to adopt family planning, which helps the population control program of the country.
Problems of Bangladesh Overseas Employment and Migration Sector:
- The demand for employers without adequate requirements of labor just to get the money by selling visas.
- The procedural problem in some legal institutions in the importing countries causes delays in the disposal of cases of labor problems for getting their proper dues.
- Lack of adequate consciousness about labor rights in importing countries sometimes causes ill treatment from employers.
- Nonpayment, underpayment, delayed payment, poor living conditions, refusal to provide air tickets at the time of exit, and non-adherence to the terms and conditions of employment by the sponsors.
- Sometimes as soon as the worker reaches the host country, the agreement is substituted by a new agreement having low wages, substandard accommodation, no free food, and other lower fringe benefits, etc.
- In case of accidents, it takes years to get the death compensation by the next of kin due to the complexity of the legal procedures of the host countries.
- Sometimes workers are repatriated after becoming handicapped temporarily or permanently due to some accident without proper treatment or compensation.
- Taking excess money more than the amount prescribed by the government.
- Sometimes recruiting agents do not provide any money receipt for receiving money from the migrant workers.
- Sometimes some agents do not hand over the requisite papers like employment agreements, visa papers, etc., to the workers, or they deliver them at the last moment before departure.
- Some agents do not arrange migration after receiving money from the aspirant candidates.
- Sometimes recruiting agents do not come up to assist the workers who are facing various problems related to their contracts in the destination country.
- Activating relevant government agencies with a view of service providers rather than regulators.
- Promoting Bangladeshi workers and professionals abroad.
- Making the process hassle-free by decreasing government agency linkage to migrate.
- Exploring new destinations and new professions.
- Providing training on demanded trade and exporting skilled workers instead of unskilled or semiskilled workers.
- Linguistic training for migrates.
- Using Bangladeshi embassies as a service center for overseas workers instead of remaining typical bureaucrats.
- Tourism Industry:
Bangladesh has great tourism potential. It is potential in terms of continuous economic growth, strategic location for regional connectivity, enriched natural and historical beauty, diversified landscape including plain lands, hills, rivers, and sea sights, etc. It has green plain land, a medium-height hilly range with evergreen trees, sandy sea beaches, and the largest mangrove forest in its beauty basket. With such land diversity, it has ethnic diversity of people, religious varieties, cultural differences, and different lifestyles of the people.
The direct contribution of tourism to Bangladesh’s GDP was 2.2 percent in 2014, which is expected to grow to about 4.7 percent by 2024 according to the projection of WTTC. This level puts Bangladesh at a rank of 165, whereas countries like Thailand and Malaysia are ranked at 35 and 41, and neighboring India is ranked at 135. The total contributions of the tourism sector to GDP for the abovementioned countries are respectively – Thailand (20.2 percent of GDP); Malaysia (16.6 percent of GDP) and India (6.2 percent of GDP.) These statistics suggest that Bangladesh needs to improve its performance significantly over the medium term to attain the target achieved by India.
Similarly, the tourism sector has so far generated about 3 million jobs in 2014 and is projected to generate up to 4 million jobs by 2024. Thus the contribution of the tourism sector to total employment is around 4 percent and according to the WTTC projections, it may reach 4.3 by 2024. The projections however are not very promising as it suggests only a 0.3 percent increase in employment generation over the next 10 years’ time period.
Bangladesh’s beauty basket contains beautiful landscapes like Bisanakandi at Sylhet, Sangu River at Thanchi in Bandarban, tea gardens in Srimongol, Bhawal National Park in Gazipur, Himchari National Park in Cox’s Bazar, Kaptai National Park in the Chittagong Hill Tracts, Lawachara National Park in Moulavibazar, etc. Its archeological excellence includes Lalbagh Fort in Dhaka, Ahsan Manzil in Dhaka, Shalbon Bihar in Kotbari, Comilla, the War Cemetery in Moynamati, Comilla, Mahasthangarh in Bogra, Shat Gombuj Mosque in Bagherhat, Tajhat Palace in Rangpur, Paharpur Bihar in Naogan, Kantoji Temple in Dinajpur, Puthia Palace in Rajshahi, and Suna Mosque in Chapai Nawabgaonj, etc. Beautiful sea beaches like Cox’s Bazar Sea Beach, Patenga Sea Beach in Chittagong, Teknaf Sea Beach in Cox’s Bazar, Saint Martin’s sea beach in Cox’s Bazar, Kuakata Sea Beach in Patuakhali, etc.
Bangladesh is having diversified and rich religious attractions like Mazar of Hazrat Shah Jalal (Rh.) and Shah Poran (Rh.) in Sylhet, Shah Mostafa (Rh.) in Moulvibazar, Khan Jahan Ali (Rh.) in Bagherhat, Shah Mokhdum (Rh.) in Rajshahi, Baro Awlia in Chittagong, etc. All of these are considered holy places by the Muslim community. Bangladesh is also home to religious heritages of the Hindu community like Dhakeshwari Temple in Dhaka, Joy Kali Temple in Dhaka, Kantaji Temple in Dinajpur, Chandranath Temple in Chittagong, Dhamrai Jagannath Roth in Dhamrai, Boro Kali Bari Temple in Mymensingh, Comilla Jagannath Temple in Comilla, Adinath Temple, Moheshkhali, Cox’s Bazar and Bhabanipur Shaktipeethin Bogra, etc. There are places in Bangladesh carrying memories of the famous Buddhist Saint Atish Dipankar and many more.
Problems of Bangladesh Tourism Sector:
- Poor tourist infrastructure
- Unsafe tourist spots,
- Poor but high-cost residential facility
- Unwanted hassles from criminals or police
- Season-based tourism affair (mainly winter-based).
- Lack of publicity of the potential spots.
- Risky transportation system
- Development and promotion of potential tourist spots.
- Organizing transportation facilities from all major cities.
- Maintaining strict law and order situations in all tourist spots.
- Controlling policing in tourist areas.
- Focusing on local/domestic tourists.
- Using Bangladesh embassies to attract foreign tourist
- Organizing local/international tourism fairs.
- IT Enabled Services:
IT Enables Service (ITES) is one of the growing sectors of Bangladesh. The ITeS sector of Bangladesh has grown considerably in recent years. Today, it counts more than 1,500 registered ITeS service providers employing over 250,000 ICT professionals. Total ITeS revenue generated by the country reached approximately US$600 million for the period 2013-2014, with export revenue accounting for US$250 million, including the freelance outsourcing segment . Industry estimates have pegged the ITO sector to comprise a vast majority of services exports, with industry stakeholders estimating that ITO comprises upwards to 90% of total services exports. Though the country’s BPO sector has continued to grow, it has remained focused on servicing the domestic market. Though this may be the current scenario, Tholons believes that there lies the opportunity for both the ITO and BPO (particularly for non-voice BPO services) spaces to expand more aggressively in the global market. As previously implied, for this to happen, specific supply-side inhibitors must be purposely addressed.
The majority of ITO service providers in the country specialize in Customized Software Development and IT Enabled Services service groups, comprising 56% and 17% of BASIS members, respectively. As of December 14, 2015 – BASIS counts 986 member companies under its fold.
Currently, the majority of Bangladesh IT/ITeS providers, as found by BASIS, depend on the domestic market as a primary revenue source, with 63% of members focused on providing services to local industries. Local demand is reported to be driven by companies seeking to improve business processes and adopt global ‘IT Best Practices,’ a relatively recent trend, only beginning to spread in the country. In a 2014 survey carried out by BASIS of around 110 member service providers, the majority of providers delivering services to the domestic market were focused on developing business application solutions including ERP, Accounting Software, HR Software, Sales Automation, and Inventory Management systems, among others.
Figure – 1: Different Segments of the ITES Sector in Bangladesh.
Source: BASIS (2014). Catalog of BASIS.
Problems of Bangladesh ITes Sector:
- Unavailability of qualified professionals.
- Unstable local market demand.
- Recruitment and training cost of employees.
- Instability of government policies
- Regulatory attitudes of the bureaucrats.
- Scarcity of ITes infrastructure
- Talent attraction and retention
- The attraction of new clients
- Creating skilled manpower in mobile application development, program development, database software, enterprise/business application software, graphic design, system software, IT consulting, embedded software development, enterprise application integration, accounting, search engine optimization, recruitment processing, etc.
- Promoting the Bangladeshi ITes sector abroad by using Bangladesh Embassies.
- Adoption of long-term policy and implementation.
- Making an easy receiving system for online earners/freelancers.
- Organizational capacity building for export.
- Providing fiscal and non-fiscal support to the entrepreneurs to flourish in this sector.
- Developers and Housing Sector:
As one of the most densely populated countries in the world, Bangladesh has been experiencing severe housing shortages. With the majority of the population in the middle and low-income groups, ensuring housing for all is difficult here. The private sector housing developers have met a large proportion of the national housing demand in the last 40 years.
But Bangladesh also suffers from a scarcity of land. It is an agriculture-based country where the urbanization level of 28% (Islam, 2012) is substantially lower than in developed countries. However, urban centers are housing huge populations. People are migrating to urban areas because of both push and pull factors, thereby creating urban sprawl. Meeting the huge demand for housing has become a challenge for the government. The real estate sector in Bangladesh has been operating for four decades, within which period it has fluctuated greatly.
Today the sector plays a major role in the national economy, contributing up to 7.08% of the national GDP in FY 2013-14 (BBS, 2014). In addition, the sector also contributed to the national economy through linkage industries, such as MS bar, cement, brick, sand, ceramic tile, paint, and other fixtures and fittings. The Real Estate and Housing Association of Bangladesh (REHAB) declared that the sector along with its linkage industries contributed about 12% to the national GDP in 2014 .
Through analyzing the consumer responses, it is estimated that the demand for houses in the upcoming three years is around 30,000 to 40,000; in the upcoming five years demand is around 60,000 to 80,000; and in the upcoming 10 years demand is around 95,000 to 130,000. In the case of flats, the estimated demand in the upcoming three years is around 75,000 to 100,000; in the upcoming five years demand is around 90,000 to 125,000; and in the upcoming 10 years demand is around 70,000 to 95,000 .
Apart from meeting housing needs, the Real Estate sector contributes to the Government exchequer through Registration Fees, VAT, Advance Income Tax (AIT), Stamp Duty, Property Handover Tax, etc. Also, the construction industry is a labor-intensive industry, whose capacity of absorbing labor is great. The industry provides many jobs for skilled, semi-skilled, and unskilled workers both in the formal and informal sectors. For the migrants from rural areas, the construction industry is often a stepping stone to urban life. The Real Estate sector is a major part of the construction sector. Most of the labor force engaged in the construction sector is basically engaged in the Real Estate sector. Thus real estate sector is also contributing a lot to the overall economy of Bangladesh.
Problems of Bangladesh developers and housing sector:
- The high price of the lands.
- Various types of tax are Imposed by the Government.
- Hassle in getting gas, water, and electricity connection.
- The high price of construction materials.
- Higher rate of interest.
- The higher profit motive of the real estate businessmen.
- Scarcity of lands in the cities.
- Government shall have a special plan to ensure housing to the middle-class city duelers.
- All types of taxes on the housing sector could be reviewed.
- The land administration system should be transparent.
- Taxes on construction materials could be reviewed.
- Electricity, gas, and water connection to the housing sector could get special priority.
- Interest rates for the housing sector could be reviewed.
- Government shall incorporate housing for all visions in its development plan.
- Amusement Sector:
Bangladesh is one of the most densely populated countries in the world. Economic development is making its people concerned about their mental health. Purchasing power of the population is rising day by day. As a result, the amusement park is not only a source of entertainment but could be a vibrant source of profit for an entrepreneur. Rapid economic growth along with evolving the service sector espouses a substantial number of people who have regular incomes with diversified needs. Among those needs entertainment plays a very important role. Because today’s people are aggressively active in entertainment markets in order to maintain as well bring something new to their busy and rigid life structure.
Major amusement destinations of Bangladesh are Dhaka National Zoo, Balda Garden, Mirpur Botanical Garden, Shishu Park, Nandan Family Amusement Park, Fantasy Kingdom Amusement Park, Bangabandhu Sheikh Mujibur Rahman Novo Theatre, Heritage Park Concord Ashulia, Dhaka, Dream Holiday Park, Chaitaba, Panchdona, Narsingdi, Tamanna World Family Park Picnic & Shooting Spot, Mirpur, Dhaka, Foy’s Lake Amusement World, Bangladesh Butterfly Park, Zastat amusement park, Sylhet, Toggi World (Theme Park), VINNYAJAGAT, Ganjipur, Rangpur, Ananda Bhaban Shaheed Zia Smriti Complex, Dublar Char (Island), Bhawal National Park, Modhupur National Park, Ramsagar National Park, Kaptai National Park, Himchari National Park, Madhabkunda Eco-Park, Sitakunda Botanical Garden and Eco-park, and Dulahazara Safari Parks, etc. .
Problems of Bangladesh’s amusement sector:
- Shortage of market information.
- Absence of promotional campaign by the existing amusement spots authorities.
- Unavailability of skilled manpower for the amusement sector.
- Complex licensing procedure in acquiring machinery and equipment.
- Shortage of suitable space and complex process of land acquisition.
- Legal and political interruptions.
- Absence of government policy to promote the amusement sector of Bangladesh.
- Government should have a clear-cut policy and separate authority to promote the amusement sector of Bangladesh.
- Amusement-related skilled manpower shall be developed.
- Amusement machinery and equipment should make available at low cost.
- Bureaucratic complexity should be reduced to advance the amusement sector of Bangladesh.
- Existing public sector amusement facilities shall be developed and promoted.
- A special promotional campaign should be operated to inform people about the public sector amusement facilities of Bangladesh.
- Amusement-specific technical and technology institutes could be established in Bangladesh.
Top 12 Service Sectors in Bangladesh, This is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” by the Author. To purchase the book click here.
- Telecommunication sector:
The liberalization of Bangladesh’s telecommunications sector began with small steps in 1989 with the issuance of a license to a private operator for the provision of inter alia cellular mobile services to compete with Bangladesh Telegraph and Telephone Board (BTTB), the previous monopoly provider of telecommunications services within Bangladesh. Significant changes in the number of fixed and mobile services deployed in Bangladesh occurred in the late 1990s and the number of services in operation has subsequently grown exponentially in the past five years.
The incentives both from government and public sectors have helped the industry grow and it is now one of the biggest industries in Bangladesh. As a populous country, its huge market has attracted many foreign investors. Major milestones of Bangladesh’s telecommunication sector are:
Table – 1: Milestones of Bangladesh telecommunication sector.
|1853||Telegraph branch under Posts and Telegraph Department, British India.|
|1971||Reconstructed as Bangladesh Telegraph and Telephone Department under Ministry of Posts and Telecommunications.|
|1975||Reconstructed as Telegraph and Telephone Board.|
|1979||Reconstructed as Bangladesh Telegraph and Telephone Board (BTTB) with right to issue license for telecom and wireless services.|
|1981||Digital Telex Exchange in Bangladesh.|
|1983||Automatic Digital ITX started in Dhaka.|
|1985||Coin box Telephone service introduced in Bangladesh by BTTB.|
|1989||GENTEX Telegraph messaging service introduced in Bangladesh.|
|1989||Bangladesh Rural Telecom Authority got license to operate exchanges in 200 upazilla.|
|1989||Sheba Telecom got license to operate exchange is 199 upazilla.|
|1989||Cellular mobile phone company Pacific Bangladesh Telephone Limited and Bangladesh Telecom got license.|
|1995||Card Telephone service introduced in Bangladesh by BTTB and TSS.|
|1995||Regulatory power of BTTB transferred to Ministry (MoPT).|
|1995||2nd and 3rd ITX installed in Dhaka.|
|1996||GrameenPhone got cellular mobile Telephone license.|
|1996||Telecom Malaysia International Bangladesh got cellular mobile license.|
|2000||Global Telecom Service (GTS) Telex Exchange venture with British Telecom.|
|2001||Telecommunication Act, to establish Bangladesh Telecommunication Regulatory Commission (BTRC).|
|2004||Teletalk cellular mobile launched.|
|2005||Egypt-based Orascom acquired Sheba Telecom|
|2006||NGN introduced in BTTB.|
|2008||BTTB converted into Bangladesh Telecommunications Company Limited (BTCL) with 100% shares owned by Government. The Submarine Cable Project transformed into Bangladesh Submarine Cable Company Limited (BSCCL)|
|2008||Japanese NTT DoCoMo bought 30 percent stake in Aktel|
|2009||Bharti Airtel acquired a 70 percent stake in Warid Telecom|
|2009||Internet Protocol Telephony Service Provider (IPTSP) Operators launched.|
|2010||Aktel rebranded to Robi Axiata Limited|
|2012||3G mobile service is introduced by state-owned Teletalk in October.|
|2013||3G auction held for private companies|
|2014||64 districts covered with 3G by Grameenphone, Banglalink, and Robi|
Source: Tele Info (2016). History of Telecom Industry in Bangladesh. The link is http://tele.info-bd.com/telecommunications-in-bangladesh cited on November 11, 2016
Currently, there are six mobile operators in Bangladesh with Grameenphone (GP) as the market leader with a 42% share of a total of 126.87 million (BTRC June ‘15). Among other operators, Banglalink has 26%, Robi 22%, Airtel 7%, Teletalk 2% and Citicell 1% of market share.
Problems of Bangladesh’s telecommunication sector:
- High competition among the operators.
- The poor economic condition of the country.
- Unstable political situation.
- High rate of corporate tax.
- Corruption and political interruption.
- SIM Tax & Import Tax.
- Reluctant customer care.
- Government should reduce entry barriers to the telecommunication sector.
- Fare competition policy among the operators.
- Reducing government interference on telecommunication operators.
- Transportation Sector:
Transport is a very significant part of Bangladesh’s economy. The development of infrastructure within the country has progressed at a rapid pace, and today there is a wide variety of modes of transport by land, water, and air. However, there is significant progress still to be made to ensure uniform access to all available transport.
An efficient transportation system is essential to facilitate economic growth in Bangladesh. The country’s economy needs to grow at a sustained 8 percent even more per year to achieve Vision 2021. To achieve this growth, the transport sector will need to reduce costs and allocate resources among different modes of transport in a more balanced manner.
Roads carry over 80 percent of national passenger traffic, providing the backbone of the transport sector in this country of approximately 160 million people .
Bangladesh Railways, primarily a passenger railway, handles approximately 7 percent of the national passenger and freight traffic. It carries its maximum number of passengers between Chittagong and Dhaka, the nation’s most important transport corridor.
With some 700 rivers and tributaries crisscrossing the country, Bangladesh has one of the largest inland waterway networks in the world. Inland ports handle about 40 percent of the nation’s foreign trade. The network, which shrinks during the dry season, connects almost all the country’s major cities, towns, and commercial centers. Moreover, being cheap, safe, and environment friendly, inland water transportation is often the only mode that serves the poor, proving especially useful during periods of widespread flooding.
Bangladesh can be reached by air from any part of the world. The national flag carrier Biman of Bangladesh flies to 26 international and 8 domestic destinations . Biman Bangladesh Airlines connected Dhaka with 27 major cities of the world. They are- London, Muscat, Dhahran, Baghdad, Kuwait, Yangon, Bangkok, Mumbai, Calcutta, Doha, Dubai, Jeddah, Karachi, Kathmandu, Kuala Lumpur, Abu Dhabi, Amsterdam, Athens, Rome, Tripoli, Tokyo, Singapore, Bahrain, Frankfurt, Ho Chi Minh City, Hong Kong, Jakarta, Sarjah, Seoul, Riyadh, and Delhi. Biman, Bangladesh Airlines also connected Dhaka with major cities of Bangladesh, Chittagong, Jessore, Cox’s Bazar, Rajshahi Saidpur, and Sylhet in its 7 domestic routes. There are a total of 11 airports in Bangladesh. These are Dhaka, Barisal, and Chittagong. Comilla, Cox’s Bazar, Ishurdi, Jessore, Rajshahi, Syedpur, Sylhet and Thakurgaon. The airports at Dhaka, Chittagong, and Sylhet are international. Besides Biman, Air cargo and Short Take-off and Landing (STOL) services have been opened to the private sector by the government.
Problems of Bangladesh transport sector:
- Strengthening road, rail, and waterways network up to the seaports: Improvements in the ports, railways, and inland container depots in an integrated manner are important so that the Dhaka-Chittagong corridor (the main trade route in Bangladesh) can effectively handle exports and imports. An alternative corridor like Dhaka-Mongla could be developed to substitute the existing one.
- High charges for using port services: Indicative container handling charges suggest that Chittagong Port (USD200/TEU including unofficial and ancillary costs) is more expensive than other ports in the region.
- Scarcity of water transports and routes: To meet the demand for passenger and freight transport, an increase in the operational efficiency and safety of Inland Water Transport (IWT) is necessary. IWT currently carries more passengers (13% of the total) and freight (25%) than the railways.
- The poor condition of major infrastructures: The development of major infrastructure such as the Dhaka Eastern Bypass and the Padma Bridge is important to improve the connectivity and land use of the country. The Eastern Bypass would be a significant investment, comprising transport, flood control, and urban development of Dhaka, which is growing at more than 6 percent per year. The Padma Bridge would connect the currently isolated southwest and the eastern zones of the country.
- Narrow roads and traffic jam: Although the road network has been substantially expanded and improved till now roads are narrower as a result extreme traffic jam is occurring. Statistics reveal that the fatality rate is more than 100 deaths per 10,000 registered motor vehicles each year. This is a major area of concern and needs to be addressed.
- Establishing road/waterways network to link up industrial clusters of Bangladesh on a priority basis.
- Making and remaining inland waters ports functional and effective.
- Dazing up the major rivers to keep the waterways functional throughout the year.
- Increasing public buses in major cities.
- Making the road transportation system free from terrorist/political activists/police harassment during the transportation of goods.
- Developing strategic mega infrastructures like Deep Sea Port, Bridges, Metrorail, etc.
- Encouraging the private sector to develop transport networks in tourist potential areas.
- Chain Shop / Super Market:
The rapid urbanization trend in Bangladesh is making people busier than ever. On the other hand, the economic development of the country is increasing the purchasing power of the mass people. As a result, their purchasing behavior is changing day by day. Supermarkets and chain shops are becoming popular every day.
According to the BSOA (Business Supermarkets Owners’ Association), currently, there are 121 supermarkets in the country that captured 2% of the markets. However, the industry is largely dominated by three major players – Shwapno (59 Outlets), Agora (13 Outlets), and Meena Bazar (18 Outlets). Once a key competitor, Nandan, now holds just two stores . Every year government earned Tk.30 crore from these super shops through revenue. More than 10,000 people are working directly in this sector. Nearly Tk.6 billion has been invested in this chain super shop, claimed BSOA leaders.
With rapid urbanization, the industry is expected to grow by almost 15 times its current size by 2021. Positive economic externalities such as the generation of employment via SMEs, higher food safety and security, price stability, and inclusive business development are expected to accompany this growth.
Problems of Bangladesh Super Market Sector:
- The backward linkage of the sector has not been developed yet.
- Individually supermarkets are yet to be grown to enjoy the facility of mass purchase.
- Contract farming is not popular in Bangladesh yet.
- Political unrest caused mass damage to the supply chain during a strike or other possession.
- The rapid trend of rental costs in urban areas is a threat to this sector.
- Backward linkage like farmers, fishermen, contract farming, quick transportation system, cool chain, etc. has to be developed for further growth of the sector.
- Supermarket network has to be spread out throughout the country at a cheaper price.
- People’s awareness has to be developed about food contaminants and a healthy environment.
- The functional value chain of all essential products has to be developed by involving middlemen in the sector.
- United farming (Somobay Cash) could be useful to grow agricultural crops on a mass scale.
- Domestic Aviation Sector:
Economic development in Bangladesh is opening up the box of disposable income for a large segment of the population. The increase in disposable income leads to greater movement of those affluent people for different purposes including luxury tours. Prior to industrialization people have to travel here and there as and when required. But time is very limited for this purpose. Therefore travel industry has emerged as one of the largest industries in the world. According to the World Travel and Tourism Council, the travel and tourism industry employs approximately 255 million people and generates 9.0 percent of the world’s GDP .
According to the Civil Aviation Authority, Bangladesh (CAAB), the combined annual market size of 2014 was worth USD 440 million, with 5.8 million passengers and 2.3 lakh tons of cargo. As we know, higher GDP equates to higher purchasing power, which incentivizes many to choose air travel within the country as an alternative to trains and buses. On the other hand, the business environment is growing quite rapidly, and saving time is quite crucial. Airplanes save at least 70% of a business executive’s travel time.
There are currently five major companies in the aviation industry: Biman Bangladesh, United Airways, Regent Airways, Novo Air, and US-Bangla Airlines. Biman Bangladesh Airlines, established in 1972, had a good number of domestic flights during its inception, but now mainly focuses on international flights with over 18 international destinations spread out throughout Asia and Europe while private sector players like United and Regent Airways both have been strongly focusing on domestic travel.
But things have changed as now they have an increasing interest in international flights as well. Both of these airlines travel to destinations such as Kuala Lumpur, Bangkok, Kolkata, and Singapore. More interestingly, Novo Air and US-Bangla Airways – two private sector players focus completely on the domestic arena i.e., they fly regularly to the usual destinations such as Chittagong, Cox’s Bazaar, Sylhet, and Jessore.
Problems of Bangladesh’s domestic aviation sector:
- High investment requirements.
- Low and fluctuating demand.
- The lower number of destinations.
- Higher maintenance cost and inconsistency of government policy.
- Tough competition from foreign carriers.
- Exploring new international routes.
- Expanding local air destinations.
- Developing skilled manpower for the sector.
- Government support is required to capture markets by local airlines instead of foreign carriers.
- Substituting foreign carriers in popular international routes.
- Technical and Vocational Education Sector:
Bangladesh has had relatively strong economic performance in the past decade, with GDP growth averaging more than 5 percent a year during the 1990s and real GDP growing by nearly 52 percent over the same period. The working age population (15-64) has grown by about 18 million since the mid-1990s, to 77 million, and the labor force has also grown by about 10 million over the same time period to over 46 million. Technical and Vocational Education and Training (TVET) is indispensable for the development of the human capital of this country. The Constitution of the Republic states that “The state is responsible for the development of human resources of the country irrespective of gender, and to assist in employment as per the capabilities of every citizen”.
The existing TVET system in Bangladesh is constrained in several areas to effectively address the problems of low productivity of workers and low wages for them, employers’ lack of interest in recruiting graduates of the existing TVET institutions, and the absence of proper linkage of TVET institutions with the employment market, etc.
BTEB offers TVET courses under different programs. The present provision of certification by BTEB is in accordance with these programs which reflect in a way general levels of skills14 attained by the graduates. Some attributes of TVET provisions indicating quality elements would vary by level of certification. Thus the methodology of the survey has considered data from the following four certification levels of programs:
- HSC vocational
- SSC vocational, and
- Basic (short course)
Under the diploma programmer, however, there are 5specialised areas that BTEB presently has to offer. Thus the total categories considered have been 8 as the following:
- Diploma in engineering
- Diploma in textile
- Diploma in agriculture
- Diploma in fishery
- Diploma in health technology
- HSC vocational
- SSC vocational and
- Basic (short course)
According to a recent study conducted by National Skill Development Council, it is found out that, Rajshahi division has the highest proportion 33%, closely followed by Dhaka 28%, Khulna 16%, Chittagong 11%, and Barishal 8. The least proportion of institutions 3.5% is in Sylhet indicating the scant availability of TVET institutional facilities which is possibly a reflection of the low demand for such facilities in this region. Interestingly the situation correlates with one of the lowest literacy rates in this particular region compared with other regions of the country.
About 74% of the Technical and Vocational Education institutes are in the private sector, 22% are in the public sector res 4% of institutes are operated by different NGOs.
Problems of the technical and vocational education sector:
- Poor and diverse curriculum.
- Lack of machinery and laboratory facilities for experiments.
- Absence of industry-academia linkage.
- Absence of international standard educational equipment and curriculum.
- Lack of enough institutes with qualified teachers and staff.
- Enacting and implementing competency-based course curricula at all levels.
- Developing word class teachers and teaching facilities.
- Establishing equip laboratories for demonstration.
- Producing technical graduates as per the demand of the industrial sectors.
- Establishing effective coordination among industry and academia.
- Film-Making Sector:
The cinema of Bangladesh is the Bengali language film industry based in Dhaka, Bangladesh. The industry often has been a significant film industry since the early 1970s. The word “Dhallywood” is a portmanteau of the words Dhaka and Hollywood. The dominant style of Bangladeshi cinema is Melodramatic cinema, which developed from 1947 to 1990 and characterizes most films to this day.
Cinema was introduced in Bangladesh in 1898 by Bradford Bioscope Company, credited with having arranged the first film release in Bangladesh. Between 1913 and 1914, the first production company named Picture House was opened. A short silent film titled Sukumari (The Good Girl) was the first produced film in the region in 1928.
The first full-length film The Last Kiss was released in 1931. Since the separation of Bangladesh from Pakistan, Dhaka is the center of the Bangladeshi film industry and generated the majority share of revenue, production, and audiences. The 1960s, 1970s, 1980s, and the first half of the 1990s were the golden years for Bangladeshi films as the industry produced many successful films. The Face and the Mask, the first Bengali language Bangladeshi full-length feature film was produced in 1956.
During the 2000s, Bangladeshi films began doing poor business and initially, the number of films decreased. The term ‘Bangla Cinema’ became a matter of joke among the people. Though there always have been some independent filmmakers who attempt to make movies in a good manner, their work attracts only a few audiences. Viewership of Bangladeshi films has dropped, and the industry has been criticized for producing low-quality films whose only appeal is that of cheap melodrama.
After a drastic decline in the 2000s, the Bangladeshi film industry tried to bounce back after 2006. With the help of the Bangladeshi Government and the emergence of big production companies, the Bangladeshi film industry is growing very slowly. Since 2012, Bangladesh has developed several big production and distribution companies, such as Monsoon Films, Jaaz Multimedia, and Tiger Media Limited and the films produced by them have been doing better business than others for their large budget and glamorous appearance. But these films hardly attract the educated audience living in urban and rural areas. After 2000 till now most Bangladeshi movies are low-budget B movies with lower quality. From 2000 to 2006 most of the movies were C-grade and D-grade movies.
The year 2014 has been the most profitable year in the last ten years, while the previous record was expected to be surpassed in 2015, but 2015 is one of the worst times for Bangladeshi cinema. Most of the films in 2015 are a flop. The main reason for this most Bangladeshi movies are B, C, and D-grade movies and most of them are cheap copies of Indian cheap commercial films, and also most of the movie theaters are not in good condition. Recently, the Bangladeshi film industry has faced increased competition from foreign films, satellite TV, home video, and other sources. In 2014 India’s Reliance Entertainment Limited expressed their interest in producing Bangladeshi films. However, the Bangladesh Film Corporation didn’t respond due to the ban on Indian films in Bangladesh.
Top 12 Service Sectors in Bangladesh, This is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” by the Author. To purchase the book click here.
*Author’s Short Profile:
Mr. Md. Joynal Abdin is a Business Consultant & Digital Marketer based in Dhaka, Bangladesh. He is also the Co-Founder & CEO of the Bangladesh Trade Center. Previously he served at the Dhaka Chamber of Commerce & Industry (DCCI) as Executive Secretary; DCCI Business Institute (DBI) as Executive Director; SME Foundation as Deputy Manager; and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as Assistant Secretary.
The list of services Mr. Abdin is offering includes but is not limited to Business Research and Documentation like Feasibility Study, Project Proposal Preparation, Writing Business Manual, Standard Operating Procedures, etc.; Export Market Selection and Product Positioning at Home and Abroad; Buyers-Sellers Matchmaking; Website Development; Search Engine Optimization (SEO); and Social Media Marketing, etc.
Top 12 Service Sectors in Bangladesh, This is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” by the Author. To purchase the book click here.