GET IN TOUCH
- Please wait...
This letter was originally sent to LightCastle Bimonthly Newsletter subscribers.
The new year brings opportunities for growth and development, especially as Bangladesh undergoes institutional and economic reforms in 2025 while looking ahead to an inclusive national election in the coming year. However, existing challenges in the areas of law and order, low investor and consumer confidence, the slow pace of government implementation activities, and slack in government revenue generation are proving to be damaging to our growth opportunities.
The World Bank’s GDP growth estimate of 4% for FY25 underscores the sluggishness within the economy. Additionally, our ongoing ‘LightCastle Business Confidence Index 2024-25’ interviews with entrepreneurs and C-suite members indicate low confidence, with many adopting a ‘wait-and-see’ approach as we navigate the political transition next year. Despite these challenges, industry leaders are hopeful for greater stability and policy continuity following the democratic transition. We anticipate launching our report in the first quarter of this year.
The post-COVID period has had a significant impact on Bangladesh’s economic system, pushing the economically vulnerable population further into extreme poverty. A PPRC-BIGD study conducted in 2021 estimated that 24.5 million people have slipped back into extreme poverty. The recovery has been slow due to high inflation, uncertainty in the external balance of trade leading to steep currency depreciation, and price volatility in the agricultural sector.
The rural economy has been disproportionately affected, with farmers struggling against rising operational costs and fluctuating revenues. Climate change-induced uncertain weather conditions have further impacted agricultural yields. Additionally, the unavailability of foreign currency in banks and restrictions on imports have hindered capital machinery acquisition, further contributing to sluggish employment generation in the secondary sector.
Bangladesh’s impending graduation from the LDC category in 2026 will signal major development partners to reallocate funding to other destinations. With pressing development needs in other parts of the world, such as sub-Saharan Africa, development funding priorities are expected to shift in the coming decade.
Development partners have emphasized the necessity of mobilizing internal funds from both government and private sectors to finance development initiatives aimed at empowering the economically vulnerable population. Our report on the evolving donor funding landscape, published in 2021, further sheds light on the changing dynamics, highlighting economic transitions and shifting donor priorities.
CSR and philanthropic activities have played remarkable roles in funding impactful initiatives globally. Private sector-funded development organizations like the Bill & Melinda Gates Foundation (one of our clients) and the Rockefeller Foundation have significantly contributed to addressing pressing development challenges.
Beyond foundations, multinational corporations have also made meaningful contributions by funding non-profits through grants and for-profit social enterprises via blended finance and impact investments.
Bangladesh’s CSR and sustainability landscape is still in its early stages, with many local corporations conflating branding and marketing with corporate philanthropy. Our ongoing research on CSR and the sustainability funding landscape indicates that many local conglomerates lack a coherent strategy for deploying CSR funds and have a fragmented understanding of corporate citizenship.
In the face of climate change’s multidimensional impacts, sustainability must be central to corporate citizenship. Zakat also presents a potent tool for funding development initiatives and can be effectively deployed through aggregators like the Center for Zakat Management (CZM). Our upcoming report on the CSR funding landscape, scheduled for publication next month, will provide insights into its history, evolution, and future trends.
Our experts can help you solve your unique challenges
Stay up-to-date with our Thought Leadership and Insights
