The two-day Investment Summit held in the capital highlighted among others some key factors as both opportunities for and barriers to the desired growth of investment in the country. While, as usual, the much talked-about issues of policy inadequacies, corruption and infrastructural constraints figured in the discussions, one area identified by the speakers as mutually reinforcing to investors as well as to the country's investment scene is the transport sector. In fact, transport sector being highly return-worthy is potentially capable of attracting investors - local and foreign, and at the same time bringing the desired momentum in the country's investment as a whole. The key message is: transport sector offers immense opportunities for investors, as the country is most wanting in the area. This is aptly attested by the stark reality that although Bangladesh was the 45th largest economy in the world in 2015, its ranking was almost at the rock bottom in case of transport and logistics.
Developments in transportation that have been taking place since the beginning of the industrial revolution are integral to exploring economic opportunities. At each stage of societal development, a particular transport technology has been developed or adapted with an array of impacts. Tracing these from the dawn of human civilisation reveals that at different stages of social and economic development, specific transport technologies got evolved to suit the needs of the times. While at the initial stage sea ports were the only automatic choice to facilitate merchandise trading across the continents, development of rivers and canals at later stages emerged as effective means of inland distribution system. The other modes of transportation that followed over the ages were railways, roads and lastly, airways and information technologies.
Transportation brings together the factors of production in a complex web of relationships between producers and consumers. Economic growth is thus increasingly linked with transport developments. Although transportation is an infrastructure-centric activity, it must be supported by an array of other activities, namely management and information systems. Decisions have to be made about how to use and operate transportation systems in a manner that optimises benefits and minimises costs and inconvenience. In addition, lower production and distribution costs induced by transport improvements can also result in scale effects and foster competition levels, which in turn result in overall higher productivity.
Given the role that transport facilitation plays in an economy, especially in generating increased investment, it is of paramount importance for the policymakers to put their heads together in making the best choices to suit the needs of the hour. It is here that prioritising the components of transportation for improvement is crucial. There can be no denying that the country's transportation system is badly in need of an overhaul, besides introducing new development initiatives.
This was emphasised at the aforementioned investment event. Speakers, referring to the needs of keeping up with the country's growth - now believed to be in a transition phase -- mentioned innovation in transportation crucially important. A modern multimodal transport system, they commented, was a must to cater to the needs to improve Bangladesh's competitiveness in the global economy and to increase the access to goods at reasonable prices. Upgrading of logistics workforce and technology systems is also needed for ensuring that the transport system is scalable and sustainable. They suggested that joint ventures with experienced companies could be an option in this regard.
There were also suggestions for partnership between internal shipping lines or logistics providers with road and rail transportation companies. Besides, new modes of transport such as barge services for transporting containers between Chittagong and Dhaka, instead of trucking by road, also came up as suitable ways to help improve logistics. Needless to say, all these involve streamlining government policies and procedures.
There were deliberations also on specific areas requiring more attention and indeed dynamism. These included, among others, absence of any marked improvement in the container handling capacity of the Chittagong port, slow progress in the construction of four-lane highway connecting Dhaka and Chittagong.
To bring about the desired improvements, public-private partnership (PPP) was identified as the key. Thus increased investment is likely to improve the country's transport infrastructure. It is true that the idea of PPP launched by the government years back, though with no visible results, was largely inspired by speculative prospects of investment in the transport sector. But, so far, this has not happened, often alleged to be due to lack of sufficient transparency in matters pertaining to, among others, profit sharing, tax payment and so on.
Now that the country is heading for a higher middle income economy, transport and infrastructure development should, for all practical purposes, be on top of the government's agenda, which can plug in the gaps of supply chain and ensure an integrated network for smooth movement of goods and people.