Padma Bridge and the pursuit of inclusive growth

On the eve of its 50th birthday, Bangladesh basks with glory and pride. The country has crossed several milestones along the way and is set to achieve many more in the coming years.

With a high growth of its gross domestic product (GDP) the country has increased its per capita income much more than many of its peers and reduced the rate of poverty. Bangladesh is also ahead of South Asian and other least developed countries (LDCs) in several social indicators. This has helped Bangladesh to qualify for graduation from the LDC category in 2018 by fulfilling all three criteria set by the United Nations. In 2015, Bangladesh became a lower middle-income country from a low-income country as per the World Bank's classification of countries. The country made a spectacular performance in achieving the Millennium Development Goals (MDGs) between 2000-2015. Now Bangladesh aspires to become a developed country by 2041. And by 2024, Bangladesh is expected to come out of the LDC category. Since 2015, Bangladesh has been working towards fulfilling the Sustainable Development Goals (SDGs) by 2030.

On December 10, 2020, another feather in the cap was added. The dream of having a bridge over the mighty Padma river is going to be fulfilled finally. The last span of the Padma Multipurpose Bridge was installed. This will connect both sides of the Padma river. Started in December 2015, the bridge is expected to be completed by 2021. This long-awaited bridge carries significance for Bangladesh on several accounts.

Economic and social transformation will be enormous

Reliable infrastructure plays a key role in economic growth. Studies have found positive relationship between infrastructure and economic output in many countries. This happens through gross domestic capital formation, employment, trade and human capital. Good infrastructure enhances productive capacity and improves competitiveness of a country. There is ample evidence that infrastructure and output are mutually beneficial. That is, infrastructure boosts output and higher output also leads to better infrastructure.

The Padma Bridge is estimated to increase the GDP of the country by more than one percent. It will benefit about three crore people across 21 south-western districts of Bangladesh. These districts will be connected with the growth centres through better connectivity. They can be used as economic corridors. This will create opportunities for employment and income. The transportation system will be improved as movement of people will be enhanced. Supply chains within the country will be connected better. Goods and services will move smoothly from one place to another. People from the south-western parts of the country are also expected to have better access to education, healthcare and other services.

Not only will people move to the urban areas easily, opportunities will also come to the rural areas. This will change the rural economy which is already undergoing transformation. The share of the agriculture sector to the GDP of the country has declined significantly with the emergence of non-farm activities in the rural areas. This was facilitated by several factors including better communication and connectivity. 

Bangladesh's confidence goes up

This bridge is a testament on how a country with limited resources can achieve its goal if there is determination. Under the leadership of Bangladesh's Prime Minister Sheikh Hasina, the Padma Bridge is the outcome of dedicated work of the Bangladeshi people including government officials, engineers, planners, workers and many other concerned persons.

Undoubtedly, the construction of this 6.15 kilometre long double-deck bridge has enhanced the confidence of the country. This will allow policymakers to plan for larger infrastructure. This will also encourage foreign investors to invest in infrastructure and in other sectors in Bangladesh.

Reaping the benefits is dependent on many factors

Infrastructure generates economic benefit to the extent they create services for people. In other words, benefits from infrastructure are not automatic and it cannot work in isolation. The return from investitures depends on enabling policy framework and supporting measures.

One of the preconditions is the development of all regions including the rural areas and creating opportunities for people everywhere. Decentralisation of services and opportunities is critical for reaping benefits from such infrastructure. For example, setting up of industries in the newly connected districts will help stop migration from the rural areas to the big cities for work. Better access to finance for small and medium businesses such as agro-processing, handicrafts and food industries will also help create jobs. Besides, improvement of facilities such as uninterrupted electricity, internet, education and healthcare in the villages will restrain people from crowding the cities.

Earlier, the Jamuna Bridge which linked the north-western districts with the rest of the country had also created a lot of hope. However, much of that hope remained unfulfilled. With much dismay we observe how farmers of Sirajganj and other districts have to throw milk on the road as they do not get fair prices. Potato and other vegetable producers in the villages have to do the same due to lack of better prices for their produce.

On the other hand, students from the rural areas have to come for higher studies to Dhaka. Critical patients have to be brought to big cities for treatment despite having clinics at district and sub-district levels. Professionals and doctors do not want to live outside Dhaka. In many districts there are medical colleges and universities. Still those places are not the desired destinations due to lack of other essential amenities. Because Dhaka is the centre of all economic, administrative, social and cultural activities, people cannot do without living in and around this mega city. This is deterring the development of the rural areas.

Cost of the infrastructure is an important factor for realising the benefits. Back in 2007, the cost of the Padma bridge was estimated to be Tk 10,161 crores. However, after several revisions, the cost has been revised upward to Tk 30,193 crores. Delay in project implementation has escalated costs as usual. Some additional features have been added to this bridge which were not originally planned. Also, devaluation of the taka against the US dollar has pushed the cost upwards. But how efficiently resources have been used and how wastage of resources have been managed should also be taken into consideration. This will be the lessons for future infrastructure development. High cost of the bridge could increase the toll for crossing the bridge. Higher transportation cost will raise commodity prices. Cost escalation of the bridge could also delay the recovery of the project cost.

Therefore, once the bridge is fully functional, monitoring and evaluation of the infrastructure will be critical to get the expected return. The construction of the bridge has been a landmark achievement of the government. But without its efficient management and governance, the rate of return from this mega project will be low.

Finally, as Bangladesh is working towards reviving the economy from the fallouts of the Covid-19 pandemic, the Padma Bridge can help the country fulfil this effort to a great extent. It can also contribute towards achieving sustainable development.

Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue.Views expressed in this article are those of the author and do not necessarily reflect the position of her organisation.