Establishing an economic corridor connecting the key lagging regions of northeast and southwest Bangladesh via Dhaka can ensure 2.6 times the output and generate 2.3 times the employment by 2050, found an Asian Development Bank study.

Bangladesh has its economic growth concentrated mainly in the Dhaka and Chattogram divisions, while other divisions lack adequate physical and social infrastructure to promote their growth.

Currently, northeast and southwest Bangladesh are key lagging regions in the country, said the Manila-based multilateral lender in a report styled "Bangladesh Economic Corridor Development Highlight". The report was launched yesterday in an event at the BICC with Planning Minister MA Mannan as the chief guest.

As Bangladesh enters the next phase of economic growth, it needs to integrate the lesser developed regions into its development blueprint by way of an economic corridor. Creating an economic corridor can drive the massive structural transformation it needs to ensure its development is sustainable and equitable.

ADB has conceptualised a Bangladesh Economic Corridor (BEC) running from the southwest region (Khulna division) to the northeast region (Sylhet and Mymensingh divisions) via Dhaka.

Should Bangladesh form such an economic corridor, the total combined output in the region is expected to increase from $32 billion in 2020 to $286 billion by 2050. If no corridor is formed, the total output will be $110 billion in 2050.

Similarly, the total employment generated in the corridor region is expected to be 15.7 million in 2025 and 71.8 million in 2050. In the absence of the economic corridor, the total employment in the region would be 31.1 million in 2050.

An economic corridor has three complementary components: (i) a trade and transport corridor; (ii) production clusters producing goods for both consumption in the domestic market and for international trade; and (iii) urban centres acting as the major market for goods from the production centres and goods imported through international gateways; they also act as a source of labour, technology, support services, knowledge and innovation.

The entire economic corridor conceptualised by ADB encompasses 14 districts, covering 34 percent of the total population.

Along with high population and geographical coverage, the corridor region holds strategic locational advantages.

There are eight major trade gateways in the BEC region: Mongla seaport, Payra seaport, Benapole land port, Bhomra land port (four in the southwest); Akhaura land port, Tamabil land port, Bibirbazar land port, Nakugaon land port (four in the northeast).

While Mongla and Payra seaports provide sea route trade linkages with the world (currently contributing about 11 percent of seaborne international trade), land ports in the region act as major trade gateways with India, contributing 36 percent of Indo–Bangladesh trade.

Hence, the corridor region has an inherent advantage for international trade-dependent industries from the perspective of importing raw materials and/or exporting finished products.

Besides, Northeast Bangladesh has an added locational edge with respect to cross-border trade potential with Northeast India, a landlocked territory with a market demand of $38.5 billion.

Leveraging the logistical advantage, agri-commodities and industries from the Northeast Bangladesh region can find a potential consumer market in Northeast India.

Likewise, Northeast Indian states, being endowed with natural resources, can export rubber, limestone and other mineral resources to Northeast Bangladesh, which can act as raw materials for local industries. In addition, Northeast Bangladesh can leverage its proximity with countries like Nepal and Bhutan.

Not just locational advantage, the BEC region is rich in agricultural produce and it has an abundance of natural resources such as gas reserves, limestone, white clay and peat reserves.

"Despite being strategically located and resource-rich, to date, the southwest and northeast regions have not been able to fully utilise their natural advantages due to inadequate transport infrastructure within the hinterland and connectivity with the trade gateways."

Apart from limited physical infrastructure, inadequate social infrastructure is also a key reason behind the poor economic development. The corridor region lags behind the country in terms of educational infrastructure.

This has created relatively lower employment potential in industrial and service sectors (relatively high wage-paying sectors), which is corroborated by the employment number: 58 percent of the population in the corridor region is employed in agriculture, compared to the national average of 48 percent.

The development of this envisaged corridor may be carried out in two phases.

In the first phase, the southwest portion of the corridor may be developed (Southwest Bangladesh Economic Corridor [SWBEC]); in the second phase, the northeast portion of the corridor (from Dhaka to Sylhet and Mymensingh) may be developed (North-East Bangladesh Economic Corridor [NEBEC]).

To develop the BEC, ADB has identified 56 railway projects to enable efficient rail movement in the region, 114 road projects to increase road density in the region by 38 percent, 33 projects to improve inland water connectivity and 38 projects to address the bottleneck at export and import gateways.

Four partially developed industrial clusters have been identified and 12 manufacturing industries were shortlisted for the whole BEC region.

The industries are food processing, leather and footwear, textiles and ready-made garments (RMGs), jute, nonmetallic mineral manufacturers, shipbuilding, furniture, transport equipment, pharmaceuticals, plastic products, rubber and rubber products, electrical and electronics machinery, and heavy machinery.

Along with the manufacturing sector, the service sector can also be developed. Two major service sector industries, i.e., information technology and tourism have been earmarked.

"If we want to implement the ADB recommended corridor, then a stable political regime is necessary. Prime Minister Sheikh Hasina is creative, innovative and visionary. Only she can implement these plans, if she gets the chance to run the country again," Mannan said at the event.

Proper institutional and governance frameworks are extremely important for the economic zones to attract investors, said Sabyasachi Mitra, director of public sector management and governance of ADB.

Edimon Ginting, country director of the ADB; Shaikh Yusuf Harun, executive chairman of Bangladesh Economic Zones Authority; Uzma Chowdhury, director of Pran-RFL Group; Md Mostafizur Rahman, additional secretary of ADB wing chief of Economic Relations Division; Soon Chan Hong, senior country specialist at the ADB; and Avijit Chowdhury, executive member of the BIDA, also spoke at the event.