Ports, Corridors and Connectivity Can Become the Centre of Regional Economies

History offers an important lesson: many major global economic powers have relied more on their geographical positions than on natural resources to build their economies. Singapore has no oil, Dubai has a relatively small population, and the Netherlands is small in size. Yet, by developing seaports, trade links and advanced logistics systems, they have become important centres of the global economy.

Their success shows that a strategic location does not automatically become an economic asset. It requires long-term planning, efficient institutions, infrastructure investment and effective policymaking to turn geographical advantages into economic strength.

Singapore has become one of the world’s leading trade hubs through its deep-sea port, efficient customs system, international shipping links and business-friendly administration. The Netherlands has established itself as a major gateway to the European market by connecting the Port of Rotterdam with Europe’s inland waterways, railways and road networks. Dubai has also transformed its geographical position into a global economic advantage through an integrated network of ports, airports, free trade zones and international services.

The key lesson is that geographical advantages become lasting competitive strengths only when they are linked to an integrated system of production, trade, transportation and services. This is particularly relevant to Bangladesh. Its location along the Bay of Bengal, at the crossroads of South and Southeast Asia, its growing economy and a domestic market of nearly 180 million people give it significant geoeconomic potential. However, this potential remains largely untapped.

Bangladesh’s geographical position offers opportunities to connect with markets in South and Southeast Asia while providing access to major Indian Ocean trade routes through the Bay of Bengal. But a coastal location alone is not enough to turn these advantages into economic strength. The country needs modern ports, efficient cargo handling and transportation systems, strong road, rail and inland waterway connections, internationally competitive logistics services and port-based industrialisation.

This raises an important question: Can Bangladesh become a regional hub for trade and connectivity in the future? To answer this, it is necessary to examine the country’s seaports first, as maritime transport remains the lifeblood of the modern global economy.

According to the United Nations Conference on Trade and Development (UNCTAD), around 80 per cent of international merchandise trade by volume is carried by sea. This means that most global trade depends on seaports, shipping services, maritime infrastructure and related logistics systems.

In this context, a port is much more than a place for loading and unloading goods. It is a key factor in a country’s production system, import and export capacity, access to international markets and overall economic competitiveness.

An efficient port can deliver imported raw materials and machinery to industrial areas quickly. It can also help domestic products reach international markets at lower costs and in less time. In contrast, long delays at ports, vessel waiting times, complicated cargo clearance procedures, high transportation costs and weak connectivity can undermine a country’s export competitiveness.

Therefore, countries with efficient ports that are well connected to international shipping networks have greater opportunities to strengthen their economic competitiveness. Bangladesh’s main challenge is to develop its existing and planned ports as parts of an integrated national and regional port system rather than treating them as separate infrastructure projects.

Chittagong, Mongla, Payra and Matarbari each have distinct geographical advantages, infrastructure features and potential economic roles. If these ports are developed through an effective division of responsibilities, better domestic transport links, coordination with industrial zones and stronger trade connections with neighbouring countries, Bangladesh can make much better use of its maritime economic potential.

In that case, the ports would serve not only as gateways for the country’s imports and exports but also as important centres in the wider Bay of Bengal region’s trade, industrial and logistics networks. This brings us to a fundamental question: Does Bangladesh have the planning capacity, institutional strength and long-term vision to turn its ports into major regional economic and connectivity hubs?

Chittagong Port and the Need for Diversification

Chittagong Port has long served as the main gateway to Bangladesh’s national economy. Most of the country’s foreign trade depends on this port. According to statistics published based on information from the Chittagong Port Authority, the port handled around 3.409 million twenty-foot equivalent units (TEUs) of containers and approximately 138.2 million tonnes of cargo in 2025.

During the same period, around 92 per cent of the country’s maritime general cargo trade and nearly 98 per cent of container-based imports and exports passed through the port. These figures highlight Chittagong Port’s vital role in the national economy. However, they also expose the risks of excessive dependence on a single major seaport.

Even a minor disruption, vessel congestion, delays in cargo clearance or inefficiencies in transportation can affect more than the port itself. Such problems can disrupt industrial production, the supply of imported raw materials, the timely delivery of export goods and the overall supply chain.

As Bangladesh’s economy continues to grow, industrialisation expands and regional trade opportunities increase, the growing pressure on Chittagong Port could create even greater challenges. Although the port achieved record container and cargo handling volumes in 2025, the volume of goods handled alone cannot determine its actual efficiency.

A port’s competitiveness depends on several factors, including vessel turnaround time, delays in container clearance and delivery, storage capacity, customs procedures, digital management systems and the time required to transport goods from the port to industrial areas and consumer markets. In other words, port capacity is not limited to the number of jetties, cranes, yards or vessels it can accommodate. It also depends on the efficiency of the entire supply chain.

Time itself is an economic asset in international trade. When goods remain stuck at a port for several extra days, businesses face higher storage costs, additional shipping charges, production delays and the risk of failing to meet export deadlines. Such delays can weaken international competitiveness, particularly in time-sensitive sectors such as readymade garments, agricultural products, frozen food and other export industries.

Therefore, developing alternative and complementary port capacity alongside the modernisation of Chittagong Port is an important part of Bangladesh’s economic planning. This is why the development of Matarbari Deep Sea Port, the modernisation of Mongla Port and the expansion of Payra Port have attracted national attention. However, the significance of these initiatives goes beyond building new infrastructure. They can connect the economic potential of different regions with maritime trade, strengthen port management capacity and reduce excessive dependence on Chittagong Port.

The Matarbari Deep Sea Port project is particularly important because it offers the potential to develop infrastructure capable of accommodating large ocean-going vessels. This could create opportunities for direct connections with international shipping companies, larger container volumes and lower transportation costs and delivery times.

However, these benefits will depend on timely project implementation, the development of navigation channels and terminal facilities, modern equipment, efficient management and strong road and rail connections. Meanwhile, the development of Mongla Port could create new opportunities for industries, agriculture, imports and exports, and economic zones in the southwestern region.

For Payra Port, infrastructure development must be accompanied by proper attention to navigability, regular dredging, road and rail connections, fuel supply and actual commercial demand. In other words, each port must be developed in line with its geographical location, economic hinterland, potential cargo volume and regional industrial development.

Lessons from Successful Port-Based Economies

Experiences from successful port-based economies show that they have never limited development to a single port. Instead, they have connected ports with industrial zones, economic zones, highways, railways, inland waterways, warehouses and regional trade networks.

As a result, ports do not merely serve as gateways for imports and exports. They create wider economic opportunities in production, storage, processing, re-export, transportation, financial services and employment.

Singapore’s experience demonstrates the importance of coordinating customs efficiency, shipping operations, maritime services, financial institutions, technology and skilled human resources around its port. Similarly, Dubai’s Jebel Ali Port is more than a place for ships to dock. It is connected to the Jebel Ali Free Zone, warehouses, distribution centres, industries, manufacturing and re-export facilities, as well as international business services.

This integrated system has helped the port connect global trade with the wider Middle Eastern market. The success of a port, therefore, cannot be measured solely by the number of berths or the volume of containers handled. The scale of production, investment, employment and commercial activities developed around it is equally important.

Bangladesh should follow a similar approach by developing its ports under an integrated port and logistics policy rather than treating them as separate projects. Instead of competing with one another, Chittagong, Mongla, Payra and Matarbari should complement each other. Long-term planning is needed to determine which ports will specialise in particular types of cargo, which industrial zones will be connected to which ports, where container depots and warehouses will be established, how rail and waterway transportation can be expanded, and how customs and port services can be digitised.

At the same time, the country must attract domestic and foreign investment to port-based industrial and economic zones, encourage local suppliers to participate, develop a skilled workforce and ensure technology transfer. Port development will have a much greater impact on the national economy when it increases production capacity, creates new jobs and improves the diversity and competitiveness of export products.

The main task for Bangladesh is not simply to build more ports. It is to develop an economic ecosystem around existing and planned ports that strengthens the domestic economy and connects it effectively with wider regional trade networks.

Connectivity with Industry and Regional Markets

No single port—whether Chittagong, Mongla, Payra or Matarbari—can transform the national economy on its own. Industrialisation, warehousing, supply chain management, cold storage, export-oriented manufacturing and modern logistics infrastructure must be developed around these ports.

The effectiveness of these facilities will depend on how smoothly they are connected with production centres, industrial zones, agricultural regions, consumer markets and international trade routes. Reliable and rapid transportation is particularly important for Bangladesh’s agriculture, fisheries, food processing, readymade garments, pharmaceuticals, leather goods and light engineering industries.

In agriculture and frozen food exports, even minor weaknesses in storage and transportation can reduce product quality and export value. Similarly, if industrial raw materials and machinery cannot be transported quickly from ports to production centres, manufacturing costs increase.

Therefore, port development and connections with production centres and markets must be included in the same plan. This makes multimodal connectivity and an integrated transport system particularly important. A port can operate effectively only when it is supported by strong domestic and regional transport networks. Even a modern port will fail to realise much of its potential if it lacks efficient connections with highways, railways, waterways and border trade facilities.

Repeatedly transferring the same goods from one mode of transport to another increases both time and costs. In contrast, proper coordination among road, rail and waterway networks improves reliability and creates opportunities to reduce the cost of long-distance transportation. In this regard, railways can play an important role in transporting heavy and containerised cargo, waterways can carry large volumes of goods at relatively low costs, and roads can provide last-mile connections between production centres and markets.

Modern customs systems, digital cargo tracking, a single-window system and faster border clearance procedures are also essential. In international trade, investors consider not only transportation speed but also the predictability and reliability of administrative procedures. Bangladesh’s geographical position offers a particular advantage in this regard.

With India’s vast market to the west, Southeast Asia accessible through Myanmar to the east, India’s northeastern states to the north and potential connections with southwestern China, Bangladesh occupies an important intermediate position in regional trade and transportation.

However, this position cannot automatically be treated as an economic advantage. Its potential will remain unrealised without effective road, rail and inland waterway links with neighbouring countries, adequate border infrastructure, customs cooperation, common cargo transportation rules and coordinated security arrangements.

In particular, Bangladesh’s geographical proximity to India’s northeastern states and the possibility of using its seaports could add a new dimension to regional trade. There are also opportunities to expand commercial links with Southeast Asia through land and sea routes. However, the political and security situation in Myanmar, border management challenges and infrastructure limitations must be considered when assessing the potential for eastward connectivity.

Bangladesh could emerge as an important connectivity state, but achieving this role will require realistic infrastructure development, effective interstate cooperation and long-term economic planning.

Geoeconomics and Bangladesh’s Strategic Opportunity

In the new phase of globalisation, geoeconomics is increasingly becoming as influential as geopolitics.
Military power was once considered the main foundation of a state’s strength. Today, infrastructure, trade, supply chains and technological connectivity also play important roles in determining a country’s economic and strategic capabilities.
Therefore, infrastructure and connectivity initiatives in different countries are not driven solely by the goal of improving transportation. They also aim to secure market access, expand commercial influence, attract investment and strengthen regional economic relations.

Bangladesh has an important opportunity in this context. As major global powers seek to expand their economic and strategic presence in the Indo-Pacific region, the country can create new trade opportunities by connecting its ports and transport infrastructure with regional economies.

However, taking advantage of this opportunity requires long-term planning based on national interests. The economic value of connectivity projects should not be judged solely by the number of kilometres of roads or railways built or the volume of goods transported between countries.

Instead, it is important to assess how much new market access these connections create for Bangladeshi industries, how much they expand local businesses, how many jobs they generate in transportation and port services, and how effectively domestic companies become part of regional supply chains.

(To be continued)
Author: Visiting Faculty Member at the University of Roehampton, United Kingdom.