Introducing Cluster Development Programme in Bangladesh

Bangladesh is one of the most promising emerging economies in South Asia. Bangladesh averaged a GDP growth of 6.5% which had been largely driven by its exports, remittance and agricultural sector. Recently manufacturing industry and service sectors are growing rapidly and the involvement in farming is decreasing. Bangladesh has a lucrative opportunity to become one of the leading economic powers in Asia by properly utilising its cheap labour and geographical position.
Bangladesh is the pioneer in introducing micro finance in the world. Eventually, it encouraged many micro and small enterprises to be established in the country. Many of the small and micro enterprises are parts of different clusters. SME Foundation (SMEF) is the pioneer organisation in Bangladesh which is working on SMEs and cluster development. SMEF identified 177 clusters in Bangladesh under which near about 69,902 enterprises are working. The average (mean) turnover of these clusters stood at BDT 2130.886 million. The total workforce is about 1,937,809 who have been directly working in these clusters, of which 74% are male and 26% are female.
Day-by-day, SMEs’ contribution to the GDP in every country is increasing, especially after the world recession when the reputed organisations or corporate businesses are facing many challenges in terms of sales, human resources and financing. However, the SMEs are working smoothly even though they are facing many constraints. Most of the developed countries have major contribution in GDP from the SME sectors like Germany (53.8%), Australia (55%), United States (46%), and Japan (50%). But the South Asian countries are struggling enormously to increase SME contribution to GDP. SME contributions to GDP of the South Asian countries are as follows: Bangladesh 22.5%, India 17%, and Pakistan 30%. For this reason, introducing substantial level of cluster development programme is very essential. By introducing cluster development programmes, we can create more employment opportunities locally and nationally as well as increase the SME contribution to the GDP which means strengthening the economy of the country too. So this is the high time for the government, different organisations like SMEF, Bangladesh Bank, BSCIC, NGOs, banks and International organisations like UNIDO, World Bank, Asian Development Bank to work together for the SME clusters development. The universities of Bangladesh also can contribute to the cluster development programs through research and by organising development programmes.
Recently I got a call from an employee of Bangladesh Small and Cottage Industry Corporation (BSCIC). He shared a problem with me that he found some lentil producers from the BSCIC industry area who are struggling to survive in the market because their sales is going down and some of them are thinking to wind-up their businesses. So he asked me for sharing some solutions considering their problems. I replied to him that the lentil producers can create marketing consortia by doing which they can increase their sales initially. Before that they have to maintain a standard quality of their products so that they can sell the produced lentils by a common brand locally and nationally maintaining the same quality. They can also decrease the cost of the production and packaging as the volume will be huge altogether. Later I also added some other recommendations which they can think to work with in the long run like technological up gradation, own distribution channel all over the country and access to finance as required. However, this is not the example taken from the clusters, but it is very sure that these are the common scenario also in the clusters in Bangladesh by which we can realise the importance of introducing cluster development programmes enormously in Bangladesh.
The economy of Bangladesh is advancing rapidly, even after the world recession. So, it is needed to find out all the sectors that are contributing to the economic development most. Undoubtedly, SME sector is one of them, and it is required to introduce cluster development programmes enormously to ensure the expansions of the SMEs and their sustainability. It will create more employment opportunities and ensure the overall socio-economic development of the country. It is needed to keep in mind that the country’s other development programmes such as education, health, infrastructure, etc. will be accelerated if the economic development of the country can be ensured.
The writer is a Programme Officer, Centre for Entrepreneurship Development (CED), BRAC University.