On a foggy winter morning in Dhaka, 41-year-old Jahid was sipping tea by a roadside stall.
“Life was very peaceful back in my village,” he reminisced, “but there was no work, so I moved to Dhaka. Even if I live in a slum, my children are better off here.”
Jahid is one of the 500,000 people that move to Dhaka city each year. Driven by the promise of economic opportunity as well as poverty in rural and coastal areas, it is estimated that half the population of Bangladesh will migrate to urban areas by 2030.
Urbanization can be catalyst for growth. Density – the clustering of firms and workers – can drive productivity, innovation and job creation. It is the benefits of agglomeration that once drew the country’s most important industry – the ready-made garments sector to Dhaka city.
However, it is the costs from congestion that are now pushing factories away, mainly to peri-urban areas. Why are factory owners leaving?
For starters, the tide of new migrants has overwhelmed urban infrastructure, basic services, as well as the stock of affordable housing – eroding the both the livability and competitiveness of Dhaka city. A recent World Bank report described South Asia’s urbanization trajectory as “messy and hidden” – reflected in the large-scale proliferation of slums and urban sprawl.