Accelerating Inclusive Growth for Bangladesh

This letter was originally sent to LightCastle Bimonthly Newsletter subscribers.

Dear Friends and Patrons:

As we begin 2023, I hope you have taken the time to reconnect with your near ones and recharge yourselves.

The past three years have been mired with turbulence. The double whammy of the pandemic-induced slowdown followed by sanction-led global economic turmoil has led to renewed uncertainties. These global shifts have adversely affected all major stakeholders, leading to incremental poverty levels.

While there is an extensive repertoire and wealth of information available to you from LightCastle, we bring you a few choice items from our experience in the frontlines of Bangladesh – working side by side with development, private, and public sector partners.

Navigating through Global Headwinds

Whether its short-term pressure on the forex reserve brought about by negative balance of payments, supply chain disruptions, and armed conflicts or more medium-term challenges like the need for financial sector reform, political stability, geo-politics management, improving the business environment or LDC graduation – as a country Bangladesh will need to navigate through a complex world.

However, the country also presents a large opportunity with only 0.5% of GDP as Foreign Direct Investment (FDI), a growing middle-income population (expected to reach 34 million by 2025 and growing at 10% p.a., commendable women participation in the workforce (35%+) and GDP growth (5 to 8% for over a decade before COVID). Additionally, 50% of the population is below the age of 35 years and highly technologically adaptable (100 million+ people on mobile financial services).

To understand more about these challenges and opportunities, here are two reports that can be useful.

1. Trends of Overseas Development Assistance and Future Given LDC Graduation
2. Economic Outlook for Bangladesh in 2023

Need for Inclusive Development to Alleviate Poverty and Change Lives of People at Scale

Development cannot happen in silos. We can foster systemic changes by identifying and synergizing public, private, and development partnerships. With applications across verticals ranging from WASH, Financial Inclusion, Women’s Economic Empowerment, Agriculture, Livestock, Poultry, Aquaculture, RMG & Manufacturing, Healthcare, and Livelihood – a collaborative approach will lead to scalable and lasting impact.

To learn more about our engagements in these spheres through technical assistance and designing & implementing projects, follow our work with the –

• World Food Programme (WFP)
• Embassy of the Kingdom of the Netherlands
• International Labour Organization (ILO)
• BRAC

Importance of Innovation and Technology Adoption

Technology is eating the world! While there are concerns regarding rapid technological development potentially impacting the future of human jobs being replaced – the only option is to go forward. New professions will be created, and we will need to focus on skilling and innovation. Everything from industrial processes, energy mix, how we handle data, and financial services to agriculture is changing rapidly and will continue to do so. Startups will continue to disrupt traditional industries. As an organization, whether you are in development or private, we need to be more flexible and open to support internal innovations as well as accelerate the adoption of new technologies.

• Read more about what startups in Bangladesh are doing and what kind of innovations they are bringing
• Read to know about international partnerships we are building to bring digital innovation to agriculture
• See the data dashboards we built

Sustainable and Inclusive Growth

The world is going through a tough time. While Bangladesh is gearing toward LDC graduation – income inequality remains a major impediment to inclusive growth. Moreover, the world needs to be on track to limit global warming to 1.5 degrees, and Bangladesh is ranked 7th in the Global Climate Risk Index 2021. When we envision a future, we look at not just growth at all costs but inclusive and equitable growth that, besides economics, also positively impacts society and the environment.

The silver lining is that embedding sustainability at the core of the business can result in better revenue generation while reducing financing costs and developing a strong image in front of regulators and customers. Concepts such as ESG, blended finance, impact investing and sustainable finance, catalytic capital, and gender lens investing are getting much attention and will continue to progress over the next decade.

Read more about our work with –

• Blended Finance,
• Private sector engagement work,
• Gender lens investing, and
• Supporting the impact investing ecosystem.

As we drew the curtains in 2022, we want to thank each and every one of you for supporting us. Whether we had the privilege to work with you as a partner or had the opportunity to connect with you through our network – we are extremely grateful to have you as a part of our community.

We wish you all the best for 2023 and hope to build a better future together.

Warm Regards

Zahed, Ivdad and Bijon

To access the latest insights on the Bangladesh economy download full report × Email Address * Name * Organization * Position *

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