DHAKA, Bangladesh - Over-concentrated development and overflowing population in the capital have had a significant negative influence on Bangladesh's gross domestic product (GDP), reducing growth by as much as 6% or more, experts stated at a recent conference.
Last week, the findings were presented at a paper presentation at the Bangladesh Institute of Development Studies (BIDS) annual conference.
During his presentation, Ahmad Ahsan of the Policy Research Institute of Bangladesh (PRI) commented that the overflow was affecting overall urban development and produced affected congestion and pollution.
As a direct consequence, traffic jams cost the economy between 2% to 3% of GDP. He also stated that the city's growth causes an overabundance of primates, concentrating people and development in the city's heart.
According to Ahsan, a former World Bank senior economist, overcrowding in primates (the largest city) can stifle growth in other cities. Due to market failures caused by lumpy investment-fixed prices and inefficiencies, network effects, and circular compound causes, the towns can overgrow.
He also stated that migration, which is highly welfare-enhancing, has its limits even in developed countries.