Industrialization in Bangladesh || Problems and Prospects

Introduction
Industrialization is the prime concern of all the economies, specially in developing countries. Since her independence, numerous policies and efforts have been made to accelerate the pace of industrialization in Bangladesh. But till today, our industrial sector has remained very weak.
Constraints to industrial development
The constraints to industrial development in Bangladesh may be divided into two parts: (A) structural and exogenous constraints; (B) Policy induced constraints.
A. The major structural and exogeneous constraints include the following-
1. Small size and poor growth of domestic economy:
One of the basic constraints to the growth of manufacturing in Bangladesh is the small size of domestic market resulting from the low level of national income. Since the bulk of the income originates in the rural sector, the growth of the domestic market oriented industrial sector depends on the invigoration of the rural economy.
2. Low entrepreneurial base:
Because of colonial economic operation, Pakistani economic discrimination and post independence nationalization, the growth of entrepreneurship has been slow in Bangladesh. Specially, the nationalization alienated the nascent Bangladeshi entrepreneurs. Hence, their is a lack of expert, courageous and efficient organizers in our industrial sector.
3. Lack of financial support:
In a number of recent perception surveys, entrepreneurs have mentioned limited access to credit, procedural difficulties and high cost of credit as their single most important problem. Attempts to stimulate private investment with public financing resulted in many pitfalls including (i) inappropriate investment;. (ii) inefficient resource use; (iii) Overcrowding in certain sectors and (iv) widespread loan default.
4. Weak infrastructural base:
In Bangladesh, access to requisite site services is far from satisfactory. Almost all the basic facilities such as power supply telecommunication, water and gas are riddled with bureaucratic tentacle, procedure for availing their infrastructure facilities are needlessly complex. Besides, the shortage of electricity and gas has - puted serious set back in the path of industrialization.
5. Underdeveloped human resources:
With continued improvement in technology, the labor component in most production process is increasingly becoming more skill intensive. Bangladesh is lacking a skilled workforce including managers, engineers and technicians. Technical, professional and vocational training is absent in our education system.
6. Lacking upgraded technology:
In Bangladesh there is a lack of commitment to the importance of subtle technology improvement. At the national level, the institutional arrangement for the scientific and research work relating to such issues as industrial applications and acquisition and adaptation of new technologies are grossly deficient.
B. The policy induced constraints include-
■1. Regulatory barriers:
Over regulation of economy has long been considered as a major policy induced constraint to industrialization. In Bangladesh, private entrepreneurs are frustrated due to regulatory environment and the associated bureaucratic sloth and corruption.
2. Problems with labour laws and institutions:
The relationship between management, employees and government have been strained, resulting in a large number of strike, lock out and other forms of unrest, which have discouraged many entrepreneurs from expanding their workforce.
3. Ineffectiveness of industrial polices:
The uncertainty of policy change is an important reason of discouragement to investment. Industrial policies in Bangladesh serve as an excellent example of policy formulation without strategic vision. Besides, our aid dependent policies sometimes oppose the actual aim of industrialization.qrs strad
4. Poor performance in export promotion:
The performance offens export oriented industries are not satisfactory. There are various problems with effective implementation of export incentives such as duty-draw back and export-credit guarantee schemes. Others such as export performance benefits, back to back L/C and bonded warehouse are not sufficiently broad based.

5. Political instability:
Political instability especially hartal, strike etc. pose serious constraint on the way of industrialization. Inspite of huge financial base, political instability due to confrontational behaviour of government and opposition parties discourage the foreign investors seriously,
Prospects for industrialization
Inspite of some constraints, we have a bright future to build an industrially developed economy. For this, we have to take some measures quickly. Among them, some notable measures are as follows:
1. Deregulation: Numerous regulations and distortions are needed to be minimized. Among them the following particularly need urgent attention:
(i) reduction of tariffs.
(ii) let market rate of interest prevail. Subsidies ought to be eliminated.
(iii) the number of license and consequently rent seekers will be reduced.
(iv) reduce price distortion in general. It is more efficient to make lump sum payment to target groups instead of subsidizing the prices of inputs and commodities.
2. Effective training program:
To create technically and managerially expert labour force, our education system should be oriented toward technical, professional and vocational training. Institutional facilities for training and research should be enhanced.
3. Financial support:
For effective financial support, government should take initiatives as-
- The structure of retail banking will have to be more competitive
Reforming the public sector financial institutions so that they can be freed from bureaucratic control and political interventions. The use of non bank forms of resource use such as debt equity swaps, industrial leasing and BOT (Build Operate Transfer) arrangements should be increased. Developing a securities market and other ways of mobilizing domestic savings.
4. Effective export promotion measures:
For effective export promotion, it needs active search for an export market and the associated product diversification and quality improvement. Besides, for expansion of non traditional exports a search needs to be initiated to determine which industries will have a global competitive advantage, spot market trends and sources of competition in these sectors and discover backward linkage potential of these industries.

4. Effective labour policy and modification of labour laws :
The legal rights and obligations of labours should be directed under a labour policy made through negotiation. Government will have to improve labour- management-govt. relations.
6. Complementary role of the government to private sector :
Government should play a complementary role to private sector. First, the purpose of the public enterprise should be to complement private sector development effort and not to substitute. Second, public involvement will have to be of a transitory nature aimed solely at facilitating private sector development.
7. Developing rural industry:
Special emphasis must be placed on developing and modernizing rural industry. We must develop an industrial culture in the rural economy. More importantly policies to promote and protect rural industries so that their use within the local economy is guaranteed, must be designed.
8. Continuing the privatization process:
The state should carefully review the privatization program. The industries which have been disinvested should be kept under close scrutiny. Industries set up with public resources which default on debt or continuously make losses should be disinvested to other private entrepreneurs, to workers or even put back with the public sector.
9. Improving infrastructure facilities :
To receive more foreign investment, accelerating the pace of manufacturing growth, infrastructural and utility servicecs should be improved. Communication system like road system, cargo handing in ports, warehouse etc. should be developed and modernized. Special measures should be taken to improve the electricity and telecommunication system.
Conclusion
After above discussion we may come to the conclusion that we are the nascent stage of industrialization. Even the growth of our industrial sector is being constrained by a number of factors requiring immediate courageous measures, In this regard, a balanced industrial policy, facilitating foreign investment, multinational companies as well as domestic industries is a must.