Turning Bangladesh into Sweden In 700 days

Ambition is good, but so is pragmatism. The recent Bangladesh Task Force Report presents a strong economic blueprint, but its sheer volume—550 pages—risks undermining its impact. Without drastic prioritisation and a sober recognition of the possible, it may remain an ambitious wish list rather than a roadmap for progress.

Each chapter provides impressive (and often erudite) policy analysis, drawing valuable lessons from other economies. Most importantly, the report is homegrown, increasing the chances of its adoption. 

However, it is weakened by the overwhelming ambition of its reforms. The export strategy chapter alone outlines 14 major policy changes, including a market-determined exchange rate. 

The infrastructure section provides 16 solid pages of recommendations. There are wide-ranging proposals on regulatory reform, but also on a more inclusive and just economic structure. There is little to object to, but a dramatic lack of prioritisation and sequencing.

Indeed, taken together, this seems to be a blueprint to turn Bangladesh in 2 years into a low-corruption, highly efficient, value-driven, inclusive state and society like Sweden. And the state inherited from the previous regime to implement this is by no means Singapore or Korea but typified by a history of low implementation capability and problems with corruption.

Meanwhile, the report acknowledges that the window for the transitional government to undertake reforms may be as short as a year, and that reforms should be undertaken with robust monitoring and evaluation. Faced with such an avalanche, and state structures unable or even unwilling to implement much, policymakers risk implementing nothing fully—and achieving nearly nothing as a result.
 

The government must reflect on four fundamental questions:

• What can realistically be achieved within the available timeframe?
• What reforms are feasible given the actual – rather than idealised – public sector?
• What are the most essential policy changes for sustained growth?
• How can policymakers work with firms to address problems that they cannot solve for themselves?

Simplify, simplify,…

Bangladesh cannot transform into Sweden by 2027, but it can take meaningful steps toward the next stage of development. It must start from where it is – the public sector and resources that it has, with its strengths and weaknesses, rather than an idealised ones that it wants. Four foundational reforms stand out:

1. Fiscal sustainability – the country's structural deficit, compounded by potential downward revisions to GDP, threatens public services, growth, and competitiveness. Expanding direct taxation will be crucial to financing services and infrastructure for inclusive development.

2. Business climate particularly for exporters – high tariffs, bureaucratic delays, land constraints, an overvalued currency, and expensive logistics continue to stifle export growth. Prioritizing these bottlenecks is essential since exports generate the foreign exchange that fuels the broader economy.

3. Transparency in Public Procurement – corruption and inefficiencies in government contracts have undermined public investment and drain fiscal resources. A credible procurement overhaul is critical to restore confidence and improve the growth environment.

4. Financial Sector Reform – the banking system is riddled with bad loans and compromised governance preventing it from allocating credit productively. A robust clean-up is needed to enable businesses to invest and grow.

And beyond this, pick one or two areas where progress can be made in terms greater inclusiveness, to make sure poor and vulnerable population are brought along. For example, a social protection scheme that genuinely covers the poorest, or baby steps to begin to improve an education system that is not delivering much learning for the poorest.

Working with what you've got

Successful reform boils down to clear practical steps from where you are. Bangladesh should build on its current strengths. Where existing institutions are already doing well, build on them. Typically, high-performing institutions often succeed because they have clear mandates and control over staffing. The government should build on such centres of excellence rather than attempting an overhaul that exceeds the capacity of state to deliver.

Moreover, policymakers must listen more closely to the private sector—particularly export firms. Bangladesh badly needs to grow its exports beyond the Ready-Made-Garments but attempts to diversify are continually frustrated. The Task Force Report rightly acknowledges that Samsung abandoned a large potential investment around a decade ago due to land shortages. But a deeper, more structured dialogue with firms could pinpoint and resolve the most pressing barriers to growth.

The Task Force Report is a valuable blueprint, but it needs a brutal prioritisation that builds on the realities of the current public sector. Bangladesh cannot become Sweden in 700 days but with the right modest steps, it can lay the foundations for a prosperous and inclusive future.

Stefan Dercon is Professor of Economic Policy at the Blavatnik School of Government. Nick Lea is an Economic Advisor at the Economic Policy Network.