From Logistics to Digital Governance: What Should the New Budget Look Like for a Competitive Economy?
In today’s global economy, achieving growth alone is no longer enough to maintain a competitive position. What is equally important is an efficient logistics system, technology-driven administration, and effective digital governance. Bangladesh is now at a stage where the coordination between infrastructure development and digital transformation will determine the country’s future economic direction. Therefore, the budget for the fiscal year 2026–27 should not be treated merely as a statement of income and expenditure; rather, it should serve as a strategic roadmap for enhancing the country’s competitiveness.
Bangladesh’s national budget is being prepared at a time when the economy is facing high inflation, pressure on foreign exchange reserves, revenue shortages, and global uncertainty. Although the country’s GDP growth has remained within 5–6 percent in recent years, the rising cost of doing business, inefficiencies in supply systems, and administrative complexities are weakening economic competitiveness. In this reality, the new budget should not only be viewed as a fiscal management document, but also as a strategic plan to make the economy more efficient, technology-driven, and investment-friendly.
According to the World Bank and several international research organizations, logistics costs in Bangladesh account for nearly 15–20 percent of total production costs, whereas in developed economies this rate generally remains between 8–10 percent. This means that Bangladesh still has a comparatively expensive supply chain system from production to product distribution. Excessive pressure on Chattogram Port, limitations in rail-based cargo transportation, and weaknesses in warehousing systems are affecting export competitiveness. Therefore, the 2026–27 budget should include a separate strategic allocation for the logistics sector.
Significant investment is especially needed for the development of the Dhaka-Chattogram economic corridor, connections with Payra and Matarbari ports, dry ports, cold chain facilities, and multimodal transport systems. At present, nearly 90 percent of goods transportation in Bangladesh depends on road transport, which increases both costs and delivery time. If incentives are provided in the budget for rail-based container transportation and the use of inland waterways, logistics costs can be significantly reduced in the long run. At the same time, it is also important to establish dedicated logistics zones for export-oriented industrial areas.
The new budget should consider digital governance as one of the main foundations of economic reform. Although many services related to business registration, VAT, taxation, customs, and licensing have already been digitized, they are still not fully integrated. The lack of data coordination among institutions and the continued use of manual processes increase both business time and costs. If Bangladesh truly wants to implement the vision of a “Smart Bangladesh,” large-scale investment will be needed in the upcoming budget to bring government services under a unified digital platform.
According to experts, effective implementation of digital governance could reduce administrative costs by as much as 20–30 percent. At the same time, transparency in tax collection would increase and revenue leakage would decline. Bangladesh’s revenue-to-GDP ratio currently remains within 8–9 percent, which is lower than many countries in South Asia. Therefore, instead of increasing tax rates, strengthening digital tax administration has now become essential. The introduction of AI-based tax audits, e-invoicing, and automated VAT management could significantly increase revenue collection.
The 2026–27 budget also needs greater focus on the technology and digital infrastructure sectors. Although the number of internet users in the country has exceeded 130 million, limited access to high-speed internet and digital services in rural areas remains a major challenge. Therefore, allocations should be increased for 5G infrastructure, national data centers, cloud services, and cybersecurity. At the same time, tax benefits and venture funds may be introduced for startups, fintech, and AI-based innovation sectors.
The budget can also play an important role in diversifying Bangladesh’s exports. At present, more than 80 percent of the country’s export earnings come from the ready-made garments sector. To reduce this dependency, sectors such as pharmaceuticals, agro-processing industries, ICT, light engineering, and healthcare should receive tax incentives and infrastructural support. In particular, non-traditional export sectors could expand rapidly if digital trade facilitation and faster customs clearance are ensured.
However, the biggest challenge will remain budget implementation. In Bangladesh, many projects under the Annual Development Programme (ADP) are not completed on time, resulting in increased costs and reduced economic benefits. Therefore, the upcoming budget must ensure project monitoring, e-governance-based tracking, and complete digital transparency in public procurement. This would reduce corruption and waste while improving the effectiveness of investment.
At the same time, building a digital economy is not possible without human resource development. Although Bangladesh’s young population is a major opportunity, the shortage of skills remains a significant barrier. Therefore, allocations should be increased for technical education and training in supply chain management, AI, data analytics, and cybersecurity. If coordination between industry and education can be established, the next generation will be better prepared for the global labor market.
Finally, it can be said that the budget for fiscal year 2026–27 must be designed in a way that ensures not only short-term economic stability, but also long-term competitiveness. Bangladesh will be able to face the economic challenges of the coming decade only by strengthening four key pillars: logistics efficiency, digital governance, technology investment, and skilled human resources. With the right policies, realistic allocations, and effective implementation, Bangladesh will be able to establish a stronger position in both regional and global economies.
Chairman, Center for Strategic and Economic Research (CSER)
Managing Director, Labaid Hospital Group and Lifeplus Group
