Bangladesh needs urgent structural reforms, stronger revenue mobilisation and better-targeted subsidies to strengthen its economic resilience, economists have said following the annual meetings of the World Bank and the International Monetary Fund (IMF) in Bangkok.
The meetings, held from October 12 to 18, brought together policymakers, financial leaders and development experts to discuss global economic challenges, job creation, investment, digitalisation and development financing. Thailand last hosted the meetings in 1991.
For Bangladesh, the discussions have particular relevance as the country faces persistent revenue shortfalls, employment challenges, pressure on its energy bill and the need to strengthen financial-sector governance.
Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM) and a professor of economics at the University of Dhaka, said the messages on fiscal discipline and revenue collection underscored the need for long-delayed structural reforms.
“The messages coming out of Bangkok are not entirely new to us, but the urgency with which they have been communicated should serve as a rude awakening for our policymakers,” Raihan said.
Bangladesh’s tax-to-GDP ratio remains low, hovering around 8–9%, he said, arguing that the country needs a fundamental overhaul of the National Board of Revenue (NBR). Separating tax policy formulation from tax administration and broadening the tax base beyond salaried employees would help strengthen domestic revenue mobilisation and reduce reliance on foreign borrowing, he added.
Raihan also raised concerns about poorly targeted subsidies, particularly in the energy sector. He argued that broad-based subsidies can disproportionately benefit higher-income households and recommended replacing them with targeted support for vulnerable people.
Direct social safety-net assistance, alongside reforms that make energy pricing more reflective of market conditions, could help protect low-income households while easing pressure on public finances, he said.
On employment, Dr Zahid Hussein, a former lead economist at the World Bank’s Dhaka office, pointed to a mismatch between the skills produced by Bangladesh’s education system and the needs of its economy.
He said global concerns about a jobs deficit were particularly relevant to Bangladesh, where a large young population faces limited opportunities for productive employment.
Although the headline unemployment rate may appear relatively low, youth unemployment and graduate joblessness point to deeper labour-market challenges, Hussein said. He added that skills gaps were making it difficult for domestic industries to absorb university graduates, even as remittances from overseas workers support the country’s external accounts.
Hussein also warned that artificial intelligence (AI) and automation could reshape Bangladesh’s ready-made garment (RMG) industry, the country’s leading export sector.
“Automation, smart manufacturing, and AI-driven supply chains are transforming global retail at lightning speed,” he said, stressing the need for digital skills, smart manufacturing and product diversification.
Without upgrading workers’ skills and adopting new technologies, Bangladesh’s garment industry could face growing competitive pressure from countries with more advanced production systems, he added.
AI, Digital Finance and Cybersecurity
AI was among the major themes discussed at the Bangkok meetings, with sessions examining its potential to improve productivity and its implications for jobs, financial stability and development.
For Bangladesh, the technology offers opportunities in manufacturing, agriculture and financial inclusion, but it also raises concerns about job displacement, cyber threats and digital fraud.
The country’s expanding digital financial services make stronger cybersecurity arrangements, effective regulation and sound data governance increasingly important. The Bangkok Blueprint, launched during the meetings, provides a framework for tackling cyber-enabled fraud through cooperation among financial institutions, regulators and other stakeholders.
Financial-sector analysts have warned that digital expansion without robust regulatory oversight and institutional accountability can increase systemic risks.
Energy Security and the Green Transition
Energy security remains another major challenge for Bangladesh, which is exposed to fluctuations in international fuel prices and disruptions to global supply chains.
The story cites an additional $4.12 billion in energy expenditure over eight months due to external supply disruptions. The figure should be verified against official data before publication.
Greater domestic gas exploration and investment in renewable energy could help reduce exposure to external shocks. The government has also pursued plans to expand solar power capacity and attract foreign investment into the energy sector.
The World Bank and IMF have highlighted the importance of mobilising financing for development and climate-related investment. For Bangladesh to access more concessional climate finance, transparent regulation, predictable policies and effective safeguards against corruption will remain important.
Policy Priorities for Bangladesh
The discussions in Bangkok reinforce several policy priorities for Bangladesh, according to the economists’ analysis.
Revenue mobilisation and fiscal discipline: Separate the NBR’s tax policy and collection functions, reduce revenue leakages, expand the taxpayer base and improve public expenditure management.
Better-targeted subsidies: Replace broad-based support with targeted assistance for low-income households while reducing pressure on the national budget.
Education and skills development: Strengthen technical and vocational education, digital literacy and data skills to help young people adapt to changing labour-market demands.
Financial-sector governance: Improve banking-sector oversight, assess asset quality, address willful loan defaults and strengthen institutional accountability.
Energy diversification: Expand domestic exploration and renewable energy investment to reduce vulnerability to global fuel-price fluctuations.
The Bangkok meetings highlighted global concerns over debt, jobs, technological change and economic resilience. For Bangladesh, translating those discussions into results will depend on the implementation of domestic reforms, stronger institutions and policies that support investment, productivity and employment.