Production Transformation Policy Review of Bangladesh
Investing in the Future of a Trading Nation
Half a century after independence, Bangladesh has achieved impressive progress. The country has transformed from one of the poorest nations into a global textile manufacturing hub capable of meeting its medical needs almost entirely through domestic pharmaceutical production. The country will graduate from the least developed country (LDC) category in 2026 and aspires to be a high-income nation through industrialisation by 2041. Meeting this challenge requires accelerating economic transformation through diversification and innovation. This Production Transformation Policy Review (PTPR), implemented with the support and collaboration of the European Union (EU), and in partnership with the UN Conference on Trade and Development (UNCTAD), identifies concrete options for supporting Bangladesh’s development. It calls for leveraging digitalisation to address persistent fragilities and it advocates for a new pact based on shared responsibilities between the national government, the private sector and international partners to shift to a new development phase and ensure sustainable, smooth and irreversible graduation.
Assessment and recommendations
Since gaining independence in 1971, Bangladesh has achieved significant progress. Its economy has transformed from one of the poorest in the world to a growing South Asian economy, home to a global manufacturing hub of ready-made garments (RMG). However, Bangladesh's achievements should not lead to complacency. The country is grappling with multiple challenges, from mitigating the impacts of climate change to preparing for LDC graduation. To secure a prosperous future, Bangladesh needs to prioritise new drivers of growth. It should shift from a price-led competitiveness model to one grounded on quality and innovation. Bangladesh also needs to shift its business mindset and modernise its policy approach for industrial development. Advancing on digitalisation and updating international partnerships are key to sustaining future progress. Above all, Bangladesh needs to future-proof the state to make it work as a value-driven and rules-based system. Chief in this transition from nation to state building is the modernisation of its institutional arrangements and the empowering of institutions to effectively deliver policies and operate in a highly dynamic and interdependent world.