'To make full use of the bridge's connectivity in this region, we need Padma Plus'
The highly anticipated Padma Bridge will be inaugurated on Saturday. Professor Selim Raihan spoke to The Business Standard about his suggested Padma Plus policy that will enable the improvement of Bangladesh’s southern districts through the use of Padma Bridge
The much-awaited Padma Bridge will accelerate the socio-economic development of millions of people in the southwestern part of the country. The benefits are expected to arise from the greater integration of regional markets within the Bangladeshi national economy.
In a conversation with The Business Standard, Professor Selim Raihan, co-author of an academic paper titled "Estimating the economic impacts of the Padma Bridge in Bangladesh," the Executive Director of the South Asian Network on Economic Modelling (Sanem) and Economics professor at Dhaka University, takes a deep dive into the impact of the Padma Bridge and how soon we can expect to see some results.
How important is the Padma Bridge for us from an economic point of view?
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Until now the communication and transportation, using this river, were entirely dependent on ferries. This is not only time-consuming but also filled with lots of uncertainty; it is not seamless at all.
As the Padma Bridge will connect Bangladesh's southern districts with its economic lifeline, namely the economic corridor of Dhaka and Chattogram, a number of benefits will emerge in the process. Firstly, the types of economic activities that were not possible in our southern districts in the past due to lack of connectivity, will now be possible.
We know that much industrialisation has not happened in the southern districts, which is why poverty is a big issue there. Climate change is also impacting this region in a big way, for example, increasing water salinity is harming agricultural production and this region is also prone to floods.
Now, as these districts become well-connected due to Padma Bridge and communication gets easier, a lot of investors who were previously hesitant will now be willing to invest here. That will create jobs, contribute to economic growth and facilitate development, not just for the southern districts but our whole economy in general.
In the 2010 study, we showed this bridge will contribute to the GDP, create employment opportunities and generate economic activities in the southern part of Bangladesh. It will also contribute favourably in terms of industrialisation. Poverty will also be reduced.
How do the regions, this bridge aims to connect, suffer due to the lack of a bridge?
The issues caused by the lack of a bridge include high transaction costs, high transport costs and time. As a result, these areas did not receive much investment in terms of agricultural improvement, in terms of industrial development, or even service sector development. Foreign investors did not feel incentivised to invest in these districts either. As a result, the contribution of these districts to the overall economy remained low.
And a lot of people have migrated out of these districts.
The poor have also become poorer due to a multitude of reasons: the lack of economic activities, certainly climate change; and there is also the issue of climate-induced migration. It has been observed that these migrants have moved to Dhaka, Chattogram and the northern parts of the country.
In terms of people's welfare, livelihood, economic growth and economic activities expansion, our southern districts are lagging behind the rest of the country.
The industries we know about - like the readymade garments industry and other major industries that have emerged over the years - we don't see the presence of these industries in the southern districts. Because they have observed that if they want to invest in these districts, they face a lot of problems. Basically, the major challenge is connectivity. And there are other challenges as well, which I believe we need to focus more on in the upcoming days.
How significant will the Padma Bridge's impact be? Will it alone be enough to improve the current state of the southern districts?
Padma Bridge alone is not sufficient. What I am really urging for these days is Padma Plus.
Padma Bridge will act as a catalyst in the future for the development of the southern districts as well as the overall economy and the improvement of connectivity. But this can't do everything automatically. We need supporting policies and programmes which I am calling Padma Plus.
What can these supporting policies and programmes be? Firstly, as I have mentioned earlier these southern districts are extremely susceptible to floods. So, the road infrastructure there is damaged every year. So, flood-resistant infrastructures need to be developed in this area. What will happen then is the southern districts will be better interconnected among themselves.
Secondly, investors who want to invest there have issues like access to funds. So, banks need to come forward and finance the investors in those areas. The investments can be of various types starting from garments manufacturing industries to agro-processing industries. When it comes to agriculture if someone goes for crop diversification or agriculturally diversified products, banks need to fund these ventures.
Thirdly, we know when it comes to investment, a big challenge is the availability of land. Another challenge we face is that industrialisation decreases farmlands. We need to identify economic zones to incentivise and promote investment inside the economic zones. Thus, agricultural land will not be wasted in an unplanned manner.
If we can create designated industrial plots investors can invest in a planned way. My fear is if there is no monitoring, various types of resorts and restaurants will be opened up on a whim, wasting precious agricultural land. Residential and industrial plots are springing up beside highways, this needs to be checked.
Fourth is the availability of skilled workers. If we look into the future, we have some big goals ahead. There is SDG in 2030, we want to graduate to upper-middle-income country status by 2031. We are graduating from LDC (Least Developed Country) status in 2026. To reach these ambitious goals, we need high economic growth with more productive investments. We need a skilled workforce to do so.
New investments in these southern districts will demand a lot of skilled labour. But, we don't have enough skilled labourers in Bangladesh to meet that demand. We need to look into this issue on an urgent basis.
Fifth, supplying the utilities. Ensuring electricity connection, gas supply, water connection, etc. Using these resources in a sustainable manner. Using renewable energy when it comes to electricity. Setting up effluent water treatment plants where the factories will open so that they don't pollute the nearby water.
Since the south is still an unused land when it comes to industrialisation we can go for planned industrialisation. Also, we need to ensure these districts have good connectivity with our ports like Mongla, Payra or any that might be developed in the future.
To make full use of the connectivity of this region with India, Nepal, and Bhutan, we need Padma Plus.
How long do we have to wait to start getting the benefits of Padma Bridge?
We will see some results automatically due to the market forces. Soon we will see some results thanks to improvements in communication and connectivity. Maybe you have seen in southern districts, people have already started investing in bus companies, some have already bought buses since people no longer have to take the ferry resulting in faster journeys. Things like logistics, people's mobility, and time savings, we will see these impacts relatively quickly.
But other changes like industrialisation, agricultural development, overall development, impact on GDP, and poverty reduction will take time. These changes will be dependent on whether there are supporting policies in place and are they being utilised properly.
So, impacts will be seen in varying timeframes. But to see the mid and long-term impacts we need to have the necessary supporting policies and programmes in place.
