Development and Challenges in Bangladesh


According to the World Bank Group Business Trends 2020 Survey, Bangladesh has implemented three business reforms over the past year. This was the most successful result in a decade, but he says that in order to grow globally competitively, we need to accelerate the pace of reform.

World Bank’s Support for Bangladesh

Bangladesh has been promised a $750 million loan from the World Bank to create multifaceted jobs, ensure the participation of juniors in the job market and improve the quality of employment. This aims to accelerate economic development and increase per capita income by creating many jobs in Bangladesh and improving the employment environment.

Financing effects and challenges


Bangladesh is growing steadily with the support of the World Bank and various countries and international organizations. The effect can be seen in terms of GDP growth and gross income per capita (GNI). The GDP growth rate increased from 5.6% in 1900 to 7.8% in 2018, bringing the cumulative total to 162%. It can be seen that the GNI has increased from US $ 320 in 1900 to US $ 1,750 in 2018, showing steady results. The World Bank also estimates that Bangladesh has implemented three business reforms in the past year. 

Three Business Reforms

  1. The cost of establishing a new business has been reduced by reducing registration fees and name clearance fees and the elimination of digital certificate issuance fees.
  2. In Dhaka, it was reduced to digitalization and the investment in the human capital to connect the network connection easily, and to introduce it.
  3. The credit information bureau’s coverage has been expanded to improve access to credit information. This reform brought the most important improvement in Bangladesh.


As mentioned above, Bangladesh is steadily producing results and developing with the support of the world, but it seems that there are still many challenges. The World Bank also says it is important to further accelerate regulatory reform efforts and continue to improve the business environment in light of recent achievements.

The World Bank has identified the following issues.

  1. In the contract enforcement index, it is the second most complicated in the world and difficult to do in time, and the registration index ranks 184th in 190 countries.
  2. Registration of property ownership transfer takes an average of 271 days and takes six times as long as the global average of 47 days.
  3. It takes an average of 1442 days to resolve a commercial dispute by trial. This is almost three times as much as 590 days, which is the average number of days required for OECD high-income countries.
  4. Nine procedures are required to attach a power line to a new building. This requires the same procedure when connecting not only domestically but also abroad.

Bangladesh has already received $ 250 million of the World Bank loan of $ 750 million at the beginning of 2019. Regarding the loan to be received in two more times, the following eight conditions are to be met. The loan will be executed depending on the improvement status of.

Eight conditions

  1. Minimize time to start a new business
  2. Reduce business establishment costs
  3. Increase in the number of business registrations
  4. Shorter time to complete customs procedures and increase disperating
  5. Increase in non-apparel non-debt-approved companies
  6. Promotion of digital management of civil service pensions
  7. Ease of traffic congestion
  8. Establishment of day care centers under new regulations

The World Bank has not yet made a second loan, saying none of these conditions have been made. However, the Bangladesh government claims that some conditions have been improved.

Condition improvement status

They were required to save time and cost to start a new business, but the time it took to register was reduced by an average of 14.6 hours. However, the new registrant rate has not met the target of0.4%to 5%.

The customs process is now to be inspected at the import stage of 100% of shipments, but the target was to be kept at 70% and to be carried out in three days, but it took 10 days as before. The number of loan approving companies outside the apparel industry was expected to increase by 891, but it was only 594.

As for the digitization of civil service pensions, we have promised to integrate the administrative sector and reform pensions. The government has also promised to introduce employment insurance for the private sector and create a pension system for civil servants, and has begun an investigation into whether employment insurance can be introduced into the apparel sector experimentally, and a legal framework has been established.

In terms of reducing traffic congestion, the goal was to reduce the average travel cost of male workers from 4.18lac to3.14lac from 32.53lac to 21.90lac. 

As a result, we have seen some improvements in the shortening of the establishment time for new businesses and customs procedures, but overall, improvements have not progressed.

These improvements are intertwined with various reasons and complexities, and are not considered to be easy to progress.

Impact of COVID-19

The Bangladeshi government has also been on lockdown to prevent the spread of coronavirus, and the economy has been stalled for more than two months.

The Government of Bangladesh is calling on the World Bank to implement loans as soon as this day. The World Bank is basically responding, but expects a written answer on the improvement in lending conditions. However, I think that the loan will be executed in consideration of the government’s efforts.

Bangladesh has continued to grow steadily until last year, but it is inevitable that economic growth will temporarily stagnate or decline due to the new coronavirus.


Bangladesh is achieving steady economic growth, partly due to the effects of loans from the World Bank and others. On the other hand, various new business establishments are required to deregulate and revise the law due to the complexity and time of the administrative procedures, but they have not improved much. The impact of coronavirus is likely to receive financial support, but temporarily economic growth will stagnate or decline.

Reference materials


Doing Business 2020


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