Dhaka is not a competitive city in Asia

M S Siddiqui writes for DOT
In the global context, only 600 cities generate about 60% of global GDP. Cities contribute more than 90% of GDP in Malaysia and Thailand, and close to 100% in Singapore and Hong Kong, China, with their strong, highly competitive, and resilient economies (World Bank 2009). Industrialization is one of the key drivers of urbanization in a country.
There was a study on competitiveness of cities in Bangladesh and Dhaka is most competitive. The results show that Dhaka, with a total score of 7.31 out of 10, is the most competitive city in Bangladesh. Chattogram, Sylhet, and Comilla have the next-highest scores. Six of the 10 cities are not competitive nationally (their index scores are below 5). These cities produce mostly for local consumption. Dhaka is not competitive than cities in Asia although cost for living is lower. It is interesting that cities in other  parts of Bangladesh are much less competitive than Dhaka because of lack of different infrastructure and shortage of efficient manpower.
Chittagong, Sylhet, and Comilla are presumed to be competitive nationally, but they have a long way to go before they can have more export-oriented, and internationally competitive, economies. None of the cities studied are internationally competitive (index score of more than 7.5), although Dhaka is competitive internationally in some sectors, mainly in textiles and garments.
The location of cities with respect to transport, government services, and natural resources also appears to be important in relation to competitiveness: centrally located cities with good connectivity are more competitive than those located close to the country’s borders. Chittagong and Dhaka, because of their location advantages as major transport hubs, have had higher concentrations and specializations of employment and economic activities, and have benefited greatly from access to migrant labor, public services, and markets associated with agglomeration.
The population size appears as a major determinant of competitiveness. Dhaka has an advantage over smaller cities in human resources and training, quality of life, and dynamics of the local economy. The most competitive sector is ICT, followed by clothing and textiles, from which Bangladesh derives almost 75% of its export earnings. The competitiveness of the ICT sector is driven largely by international factors and salary of ICT educated young generation and Garment sector due to local factors like cheap labor, almost free water, low cost electricity etc.
Although Dhaka has a dynamic and vibrant economy, it is one of the poorest megacities in the world. GDP per capita is low by international standards, but GDP per hectare is high because of the intensity of urban development and business activities. But it is still lacking in international competitiveness.
In January 2010, JETRO conducted a comparative survey of investment-related cost in 29 major cities in Asia and observed that Dhaka’s skilled labor cost base is still less than Singapore, Shanghai, Bangkok. The industrial state rent is cost effective than Shanghai, Jakarta, Bangkok. But some other important parameter like logistic, bureaucratic hassles and others made the city less competitive than then other cities. No city can hold an absolute advantage in every dimension that could matter to a prospective investor.
In 2012, Economist Intelligence Unit (EIU) ranked the competitiveness of global cities according to their demonstrated ability to attract capital, businesses, talent and visitors Dhaka scored 27.7, while New York tops the list with a score of 71.4 and Tehran scored 27.2 and Logos: 27.6. Dhaka has ranked 3rd from bottom among the surveyed 120 cities.
Dhaka is identified as the most competitive city in Bangladesh although not competitive than other regional cities. It should try to be competitive than other cities in South Asia to continue to be engine of grown of the nation. Government should take effective steps to ease of doing business in comparison to other cities of the world.
Other cities of Asia like Ho Chi Min and Yangun will challenge Dhaka due to absence of viable spatial policies like physical and spatial planning. Policymakers in those cities are investing and reforming their rules and regulations. Bangladesh should also develop other cities like Chittagong, Rajshahi, Khulna, Barishal, Rangpur, Mymensighetc to face the new challenge of competing other cities of Asia. We should not rely on Dhaka city for economic development of the country, which is already overburdened with industrialization and pollution.
The writer is a Legal Economist. E-mail: mssiddiqui2035@gmail.com