Japan's record boost for Bangladesh economy

The overseas aid arm of the Japanese government has given the green light to three record loans, totaling US$670 million in support of Bangladesh's growing economy.
February 13, 2012 Read time: 2 mins

The overseas aid arm of the Japanese government has given the green light to three record loans, totaling US$670 million in support of Bangladesh’s growing economy.

Representing the largest-ever amount loaned to the south Asian country, the loans will go to three large-scale projects designed to strategically develop Bangladesh’s capacity for growth by extending transport links within the country, improving sanitation facilities, and support the country’s small and medium enterprises.

The loans are approved and administered by the 2416 Japan International Cooperation Agency (JICA), the arm of the Japanese government for international development.

Bangladesh, with a population of about 150 million living on a landmass less than 40% the size of Japan’s, reported a solid 6% annual growth rate last year principally owing to a robust textile and garments sector which is attracting an ever-growing number of foreign investors, including from Japan.

Bangladesh is classified among the world’s Least Developed Countries (LDCs), but also as one of the so-called Next Eleven countries with enormous potential to become a major economic player.

However, one in three inhabitants still lives below the poverty line and the country faces some serious challenges to the promise of further sustained growth. A third of the country is frequently flooded during rainy seasons, countrywide links are impeded by lack of transport infrastructure across its three major rivers, the Padma, Jamuna and Meghna, and other kinds of infrastructure, such as water supply and sewerage, are also lacking.

The loans provided by JICA will focus on these three central challenges. As a start, the Japanese funds will go to building one of the longest bridges in the world over the Padma River, linking the country’s capital, Dhaka, to the industrial centre of Chittagong, and reducing travel time across the country from 12 to three hours, with clear benefits for trade and quality of life.

A second loan will increase the amount of households connected to the water grid in Khulna, the country’s third largest city, from 22% to 73%, while a third loan will be directed at the country’s small and medium enterprises sector, which is estimated to consist of 5.9 million businesses, employs 31 million people and represents 60% of the country’s manufacturing sector.

For more information on companies in this article

Related Content

  • Develop the Silk Roads, boost economic growth
    February 28, 2012
    Tony Pearce, honorary life member and former director-general of IRF Geneva, recalls the history of the Silk Roads, highlights their continued economic relevance and introduces IRF's active long-term commitment to their rehabilitation. The Silk Roads had their origins in a Chinese military mission in 138BC to purchase horses in Central Asia's Fergana Valley that were reputed to run so fast that they sweated blood. When General Chang Ch'ien reached Fergana, now in Uzbekistan, he found that the fabled horses
    Read More
  • MIRA builds on reputation for transport excellence
    October 3, 2012
    MIRA in central England has begun a huge redevelopment of its 830 acre site that will see the renowned centre for transport technologies expand its capabilities while, at the same time, create the largest transport research and development technology park in Europe. Guy Woodford reports This is all very impressive,” said Deputy Prime Minister Nick Clegg in April 2011 on hearing a presentation of MIRA’s ambitious expansion plans. As succinct appraisals go, Clegg’s view of MIRA’s plans to develop its brand of
    Read More
  • Saudi Arabian capital Riyadh benefiting from major transport investment
    September 9, 2013
    Saudi Arabia is undergoing a series of upgrades to its transport network in a bid to improve Traffic flow rates and boost safety - Mike Woof reports. The massive growth in the use of motor transport worldwide since the start of the 20th century has transformed every country on the planet. But perhaps no country has changed more dramatically than Saudi Arabia, the world’s leading oil producer. At the start of the 20th century Saudi Arabia’s population was small and the country had few industries while it is
    Read More
  • Kewatkhali Bridge construction to start
    October 11, 2023
    The project in Bangladesh for the steel arch bridge includes a 6.2km four-lane approach road.
    Read More

Highlighted Content