Bangladesh has achieved sustained growth acceleration since the 1980s and significantly reduced poverty, thanks to multi-party competition and private investor confidence. An important growth sector has been manufacturing, where millions of jobs have been created in industries like garments and textiles.
However, Bangladesh also suffers from chronic problems of poor governance that results in political crises e.g. the boycott of the 2014 election by the opposition BNP, high levels of corruption and poor regulation. Private investments have been dampened, which have been compensated to some extent by higher public investments and subsidies to sustain private investments. The country must sustain high growth if it is to eradicate poverty and reach middle income status.
Power generation and infrastructure construction have increased in recent years but at high costs, signalling the involvement of politically connected companies and high margins. The development of sectors like electronics, light machinery, pharmaceuticals, and shipbuilding has been constrained by weak regulatory capacities. Banks have lent to politically connected companies and banking scams have resulted in growing non-performing loans.
Skills training programmes, agricultural programmes, education, and health are all affected by corruption and weak governance. Unless cost efficiency can be achieved in these areas, growth may not be sustainable.
Bangladesh’s efforts to tackle corruption – signing the UNCAC, establishing an Anti-Corruption Commission and carrying out widespread anti-corruption efforts with mass arrests and prosecutions of businessmen and politicians – have achieved limited results.
ACE’s approach explains why these ‘vertical’ enforcement efforts do not yield good results in countries like Bangladesh on their own. ACE looks for sectoral anti-corruption strategies using ‘horizontal’ support for enforcement in critical sectors like health, power generation, land markets, skills delivery, industrial regulation, and infrastructure investments.
We are working closely with business, civil society organizations and the government’s Anti-Corruption Commission to disseminate and utilise our findings.
Image credit: Dhaka City/Chayon (Creative Commons/Flickr)