Research Assistant
July 28, 2019
Intern (Research)
August 26, 2019

Comprehensive Private Sector Assessment

USAID Bangladesh Private Sector Assessment report download

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Overview: 

The Government of Bangladesh has set a goal of becoming a middle-income country by 2021. To achieve middle-income status, it will require an average annual GDP growth of 7.5% – 8%. In order to achieve this growth rate, Bangladesh will need a well-diversified and vibrant private sector with significant potential for growth. Studies show, faster growth will depend on a few primary factors: (i) increased investment, (ii) faster human capital accumulation, (iii) enhanced productivity growth, and (iv) increased outward orientation. A key strategy based on these factors would be to focus on growth-oriented and income-generating priority sectors outside of the Ready-Made Garment (RMG) industry. USAID aims to support private sector development in Bangladesh, facilitate investment in sectors beyond the RMG sector, and generate growth in the emerging areas of the economy with the aim of generating employment and increasing income.

Based on this assumption, USAID/Bangladesh is conducting a ‘Comprehensive Private Sector Assessment’, implemented by Inspira Advocacy and Consultancy Ltd. The purpose of this assessment is to provide USAID/Bangladesh (also referred to as ‘the mission’), its partners and other stakeholders with a comprehensive evaluation of priority sectors in Bangladesh and identify opportunities for USAID’s limited investment. The study will also help inform USAID Bangladesh’s current activities as well as future program designs and strategies.

Background: 

Bangladesh faces a tremendous challenge. How will it provide jobs for the 20 million young people set to join the labor force over the next decade?

According to the International Labour Organization (ILO), the most disadvantaged in finding work are those who attain higher levels of education: the unemployment rate of a young person with a primary education was half that of a young secondary graduate, 6.4 and 12.3 percent, respectively. The outlook was bleaker for university-educated youth who experience an unemployment rate of 26.1 percent. How does Bangladesh turn this challenge into an opportunity?

In a recent World Bank study, it was noted that the country has relied on the garment sector to drive its economy and exports, as well as to employ many workers. This was successful in many ways, but if the country is to meet its aim of becoming a middle-income country by 2021, there is more work to be done. While Bangladesh may continue to see success with its export of garments, job growth in the sector is stalling. The RMG sector faces challenges on many fronts and competition from other established and emerging countries. Diversifying exports beyond garments may be an answer to Bangladesh’s employment conundrum. The Joint Secretary of the Ministry of Commerce of Bangladesh, Md. Obaidul Azam, said, “Bangladesh’s achievement in ready-made-garments is remarkable. However, dependence on a single sector for a majority of export earnings is risky. To sustain the economic growth amidst the current global landscape, we need to improve the competitiveness of several other promising sectors to diversify our export basket.”

USAID is committed to developing programming that supports Bangladesh in overcoming the economic growth challenges by supporting a dynamic and growing private sector. USAID strongly believes that entrepreneurs play a vital role in driving economic growth, creating jobs and innovating to improve people’s’ lives through market-based solutions.

Scope of the assessment: 

With the purpose of supporting private sector-led development beyond RMG, USAID’s current scope is limited to 16 sectors, which are the priority sectors of Bangladesh Government (according to BIDA):

The following 16 sectors under this assessment are addressed in the analysis:

  • Ceramics
  • Health Care
  • ICT and Outsourcing
  • Medical Equipment
  • Pharmaceuticals
  • Plastic
  • Renewable Energy and Energy Efficiency
  • Agri-business
  • Ship Building
  • Automotive/ Truck/ Buses Assembly
  • Leather and Leather Goods
  • Light Engineering
  • Tourism
  • Telecommunication
  • Shrimp and Fish
  • Entrepreneurship

USAID/Bangladesh, in association with Inspira Advisory & Consulting Ltd., has recently completed the comprehensive sector study.

FAQ: https://bit.ly/2zajgCP

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