Project Case Study
Scoping opportunities to encourage infrastructure investment in Bangladesh
Identifying Bangladesh's infrastructure constraints and recommendations to tackle these
Bangladesh’s infrastructure sector is one of the most underdeveloped in the world. The country’s infrastructure competitiveness is regularly ranked as the lowest in Asia, and the Bangladeshi private sector commonly cites infrastructure as one of the major binding constraints that they face to doing business.
In 2013, the Department for International Development (DFID) engaged an Adam Smith International team to conduct a scoping study to assess the barriers that prevent the private sector investing in Bangladeshi infrastructure development.
Our team worked with business representatives, the banking community, government and the donor community to build a picture of the perceived and actual challenges that face investment in infrastructure development.
Our study found that lack of electricity, inadequate transport networks, and insufficient water, sanitation and hygiene facilities are recognised as true binding constraints to Bangladesh’s development.
In order for the private sector to confidently participate in infrastructure development, improved transaction support, and a reform of the enabling environment would need to be realised. For such reforms to be successful, the perceived inefficiencies and lack of transparency must also be tackled.
Given the huge constraints that inadequate infrastructure places on economic growth in Bangladesh, there is potential for private sector participation in infrastructure to have a huge impact on the poor. Our study has gone some way towards shaping donors’ response to this important problem.