Abstract
This study attempts to investigate the importance, current status, and the prospects of the light engineering sector (LES) in Bangladesh. Like other countries, LES is a mother industry in Bangladesh that supports all other primary industries by supplying various types of machinery and spare parts, and by providing repairing services and also employing a good number of urban and semi-urban people. Thus, about 50 percent of domestic demand for light engineering goods is supplied by about 90 percent of light engineering firms that existed in Bangladesh. The export of LES products is also significant due to its high growth compared to that of total exports in recent years. Similarly, the output growth of LES is high compared to that of total industrial production in recent years. However, the production and the exports of LES deteriorated in FY2018 due to the low demand for such products in both internal and external markets. The catastrophic flood was one of the main reasons behind the low demand for LES products in the domestic market in that particular year. The scenario has rebound in the current fiscal year and expected to be improved further shortly. The existence of low-cost labor abundance along with high domestic demand is the main reason behind the bright prospects of LES in Bangladesh. This chapter concludes with the findings that government supports particularly by providing free training for LES laborers who are mostly low educated and unskilled, and easy financing facility along with cash incentive can play a vital role for the development of this sector. Also, developing a marketing channel along with ICT application could be another factor for further progress in the LES activities.
The authors are Executive Director (Research), Deputy General Manager (Research) and Assistant Director (Research) of Bangladesh Bank respectively. The views expressed in this chapter are the authors’ own and do not necessarily reflect institutional views.
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Notes
- 1.
LEPBPC stands for Light Engineering Product Business Promotion Council.
- 2.
According to a recent study conducted by the International Finance Corporation in partnership with the UK Department for International Development and the Norwegian government.
- 3.
Bangladesh has the GSP facility from 38 countries, including the 28 members of the EU. The other GSP providing countries are Australia, Belarus, Canada, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Liechtenstein, and Turkey.
- 4.
After graduation in 2024, there will be a grace period of another 3 years when Bangladesh can enjoy all LDC-specific benefits (Khatun 2018).
- 5.
The countries are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States.
- 6.
According to the latest Labor Force Survey 2016–17, published by Bangladesh Bureau of Statistics, 40.6 percent of the employed population are working in agriculture, followed by 39.0 percent in services and 20.4 percent in the industry sector of Bangladesh. Therefore, further development of LES in terms of both productivity and quality will also contribute to this overall industrial employment.
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Akhtaruzzaman, M., Sarker, M.M.I., Rahman, M.M. (2020). Pace and Prospects of Light Engineering Sector in the Economic Development of Bangladesh. In: Barai, M. (eds) Bangladesh's Economic and Social Progress. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-15-1683-2_10
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DOI: https://doi.org/10.1007/978-981-15-1683-2_10
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