BANGLADESH’S development has depended on export-led growth, particularly in the RMG sector, remittance inflows from migrant workers, contributions from service industries, and agricultural productivity. These areas have been crucial in creating jobs and earning foreign currency. Millions have been lifted out of extreme poverty and a growing middle class has emerged. However, this progress has not been evenly distributed across regions, classes or sectors. The benefits of growth have mainly gone to certain economic actors, raising concerns about inclusiveness.
A key aspect of Bangladesh’s political economy is the close connection between political power and economic gains. Business elites, especially those involved in export sectors, banking and major infrastructure projects, often have privileged access to government resources, policy advantages and relaxed regulations. This pattern, known as ‘elite capture,’ influences how credit, land and contracts are distributed. For example, well-connected companies typically find it easier to obtain subsidised loans or favourable policies, giving them an unfair advantage over small and medium-sized firms. Consequently, economic growth tends to strengthen existing power structures rather than challenge them.
The RMG sector highlights both the strengths and contradictions of Bangladesh’s development model. It has created jobs for millions, especially women, fostering gender empowerment and social change. At the same time, the sector is marked by low wages, limited labour rights and vulnerability to global market fluctuations. While factory owners and export intermediaries make significant profits, workers often receive only a small portion of the value they produce. This gap raises questions about the quality of growth and whether it genuinely improves fair living standards.
Regional disparities hinder the sharing of development benefits. Urban areas, especially Dhaka and Chattogram, have experienced rapid economic growth, attracting investments, boosting infrastructure development and creating jobs. In contrast, many rural and remote regions fall behind, with limited access to quality education, health care and formal employment. This geographic inequality not only affects income distribution but also influences migration, as people move to cities in search of better opportunities and often end up in informal, unstable jobs.
Another form of inequality exists in Bangladesh’s informal sector, which employs a large portion of the workforce. Informal workers, such as day labourers, small traders and domestic workers, are vital to the economy but are mostly excluded from formal social protection systems. They lack job security, legal protections and access to financial services. Despite their contributions to economic growth, they benefit the least from government development programmes, highlighting a disconnect between national economic gains and local conditions.
The financial sector also shows patterns of uneven benefits. Non-performing loans, banking irregularities and regulatory flaws often give large borrowers an advantage at the expense of financial stability and public trust. When powerful actors default on loans without facing serious consequences, the burden falls on the public through fewer public resources and economic inefficiencies. This damages institutional credibility and increases perceptions of inequality under the law.
Gender dynamics are more nuanced. Although women’s participation in the workforce has increased, especially in the RMG sector, systemic barriers remain. Wage gaps, limited access to leadership positions and social norms still hinder women’s economic empowerment. Therefore, even though growth has opened new opportunities, it has not fully resolved the primary gender inequalities.
The government’s role is crucial in shaping these outcomes. Public policies, regulations and governance practices determine how resources are allocated and who benefits from development. In Bangladesh, the effectiveness of these systems is often influenced by political motives, institutional capacity and accountability mechanisms. Poor oversight, low transparency and bureaucratic delays can hinder policy implementation, resulting in benefits being concentrated among specific groups.
Nonetheless, it is crucial to recognise that Bangladesh’s growth has resulted in tangible social improvements. Gains in education, health care and life expectancy indicate that development has positively impacted human well-being. Social safety net programmes, microfinance initiatives and NGO efforts have helped alleviate poverty and foster community development. These achievements prove that inclusive growth is possible, despite existing structural challenges.
The challenge, therefore, is not to dismiss Bangladesh’s development success but to critically examine its distributional effects. Building a more inclusive political economy requires reforms that address structural inequalities and promote fair access to opportunities. Strengthening institutions, ensuring transparency in public resource allocation and improving regulatory enforcement are essential steps. Policies that support small and medium-sized enterprises, expand social protections and invest in underserved regions can help reduce disparities.
Furthermore, enhancing labour standards, fair wages and workers’ collective bargaining rights can ensure that economic growth leads to improved living conditions. Similarly, promoting gender equality through targeted initiatives can strengthen the inclusiveness of development. Decentralisation and reforms in local governance can also make development more responsive to regional needs.
Although Bangladesh has achieved significant economic and social progress, the benefits remain unevenly distributed due to power dynamics, institutional structures and policy choices. The political economy of development shows that not all citizens have shared equally in the growth. Addressing this gap requires a focused shift towards inclusive policies, stronger institutions and greater accountability. Only then can Bangladesh’s development story become not just one of growth but also a narrative of shared prosperity.
Dr Nasim Ahmed holds a PhD in public policy from Ulster University in the UK and works as associate professor of public policy at the Bangladesh Institute of Governance and Management (affiliated with the University of Dhaka).
