TDS Desk:

Bangladesh’s industrial sector, encompassing over 10 million small and large entrepreneurs, is grappling with significant challenges due to economic crises, political uncertainties, and systemic issues.

Entrepreneurs are striving to sustain operations amidst these adversities, with many compelled to downsize or cease business activities.

The country has experienced a notable rise in inflation, with the rate reaching 9.88% in 2023, up from 7.70% in 2022.

This surge has escalated production costs, leading to factory closures and reduced consumer purchasing power. Additionally, the depreciation of the Bangladeshi Taka against the US Dollar has increased import expenses, further straining businesses.

Entrepreneurs report difficulties in securing loans due to liquidity shortages in banks and elevated interest rates. The implementation of contractionary monetary policies has exacerbated these issues, making debt repayment increasingly challenging and contributing to a rise in non-performing loans.

The industrial sector is hindered by inadequate infrastructure, including shortages of gas and electricity, which disrupt production schedules. These deficiencies, coupled with the absence of robust infrastructure, impede the growth and efficiency of industries across the nation.

Political instability has led to labor unrest, particularly in the ready-made garment (RMG) sector, which accounts for approximately 80% of Bangladesh’s total exports.

Frequent worker dissatisfaction and protests have created an environment of uncertainty, deterring investment and disrupting industrial operations.

The global economic slowdown and trade tensions have adversely affected Bangladesh’s export markets, especially in the RMG sector. Major fashion brands are diversifying their sourcing, reducing reliance on Bangladesh by up to 30%, and shifting to countries like Cambodia and Indonesia.

This shift poses a significant threat to Bangladesh’s position in the global supply chain.

Industry leaders emphasize the need for government intervention to address these multifaceted challenges. They advocate for improved law enforcement to curb extortion, policy reforms to enhance access to financing, and investments in infrastructure to support industrial growth. Without such measures, the private sector’s contribution to the economy may continue to decline, hindering overall economic development.