Municipalities hold investment potential beyond Dhaka

Bangladesh must move beyond its long-standing Dhaka-centric investment strategy and tap into the untapped economic potential of municipalities, said Chowdhury Ashiq Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Economic Zones Authority (BEZA).

Speaking as the chief guest at a workshop unveiling the Municipal Competitiveness Index (MCI) 2024 on Thursday in Dhaka, he described the initiative as "timely and transformative" in driving investment to sub-national areas.

"Historically, much of our investment facilitation has remained Dhaka-centric. This index helps spotlight the potential of municipalities as viable investment destinations," he said.

"If we can strengthen local capacities and improve inter-agency coordination at the grassroots level, these areas will become significantly more attractive to investors."

He emphasised BIDA's openness to recommendations and its readiness to support reforms aimed at overcoming regulatory bottlenecks outside the capital.

Organised by BIDA in collaboration with Swisscontact's PRABRIDDHI project, the workshop titled "The Role of the Municipal Competitiveness Index in Strengthening the Investment Climate" brought together policymakers, development partners, and private sector representatives.

The MCI, developed under the Bangladesh Investment Climate Improvement (BICI) programme and implemented by Policy Exchange Bangladesh (PEB), presents data-driven insights from seven pilot municipalities. It aims to identify regulatory gaps and guide local governments in creating a more business-friendly environment.

Shah Mohammad Mahboob, executive member (Additional Secretary) of BIDA and chair of the session, stressed the importance of embedding the index in BIDA's long-term reform agenda. "Institutionalising such a tool can provide sustained insights into municipal-level challenges and drive evidence-based policymaking," he said.

Special guests included Md Mokhlesur Rahman, executive member (Investment Ecosystem) of BIDA, and Markus Ehmann, team leader of PRABRIDDHI.

Presenting the index findings, Dr M Masrur Reaz, chairman of PEB, highlighted the need to expand the investment lens beyond Dhaka and Chattogram.

"While previous indices like the World Bank's Doing Business focused on just two cities, MCI provides a more granular view of local investment readiness," he said.

Jibon Krishna Saha Roy, director general of BIDA, noted that the agency's earlier pilot reforms at the divisional level paved the way for deeper local engagement with support from Swisscontact and the Local Government Division (LGD).

"This underscores the urgent need to enhance the institutional capacity of local governments," he added.

Moderated by Abu Mohammad Nurul Hayat Totul, deputy director of BIDA, the event featured panel discussions on business entry, infrastructure, taxation, dispute resolution, and access to finance.

Participants stressed the need for coordinated reforms to unlock investment at the municipal level.

The workshop concluded with a collective commitment to use MCI insights for designing targeted investment reforms and improving coordination between national and subnational actors.

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