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close this bookDeveloping the non-farm Sector in Bangladesh: Lessons from other Asian Countries (WB, 1996, 116 p.)
View the document(introduction...)
View the documentForeword
View the documentAbstract
View the documentAcknowledgements
View the documentSummary
View the documentImperatives and models
View the documentMacroeconomic trends in Bangladesh
close this folderWhat drives growth?
View the document(introduction...)
View the documentGross domestic savings (GDS) (as a percentage of GDP).
View the documentGross domestic investment
View the documentForeign direct investment
View the documentPublic finances
View the documentHuman capital
View the documentHealth
View the documentMessage from indicators
close this folderPattern of development
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View the documentHow does Bangladesh compare?
View the documentDevising a strategy for agricultural intensification
View the documentChoosing appropriate technologies
close this folderOther lessons from comparative experience
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View the documentLesson 1: Take advantage of location
View the documentLesson 2: Promote exports
View the documentLesson 3: Develop infrastructure
View the documentLesson 4: Encourage local government entrepreneurship
View the documentLesson 5: Preparing for industrialization
close this folderRural industry in Bangladesh
View the document(introduction...)
View the documentRural infrastructure
View the documentMechanical and biochemical technology
View the documentNeighborhood effects
close this folderRural industry and export-led growth
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View the documentPossibilities for foreign investment
View the documentDomestic hardles
View the documentFinancing of new enterprises
View the documentNiche exporting
View the documentGrowth poles
View the documentConcluding observations
View the documentTables and chards
View the documentBibliography

Lesson 3: Develop infrastructure

Infrastructure is extremely important to the growth of nonfarm activities, which need urban amenities and services to take root. A vast fund of empirical study analyzes the relationship between infrastructure and the diversification of economic activity in the rural sector. Some of this evidence suggests that a relationship between infrastructure building and growth cannot be derived for developing countries, but sectoral analysis suggests that road transport yields respectable returns. By building rural infrastructure, China, Indonesia, and Taiwan (China) promoted rural development, whereas the lack of infrastructure constrained off-farm activities in countries such as Kenya, Ethiopia, and Tanzania. Research suggests that rural industry needs power to run machinery, roads, and transport facilities to carry goods to the market; communication services to allow producers to keep in touch with markets and suppliers; and, possibly, serviced land with water and sewerage lines. Roads, transport, and electricity are also valuable to agriculture and have contributed to productivity growth and growth of production for the market. Of these, transport and communications take priority. Rural industries can generate their own power, albeit at higher costs. They can also arrange for water and waste disposal. Road infrastructure and communications are more problematic, although wireless and satellite systems are gradually reducing dependence on wired facilities. Typically, transport and communications services (and other services) are best near cities.