Economic development and poor regulation: increased disaster risk in Dhaka

Khaleda Begum, survivor of the Rana Plaza building collapse in Dhaka. © ILO/Muntasir Mamun CC BY NC-ND 2.0


The growth of Dhaka’s industry and service sectors over the last 20 years has triggered a boom in the city’s real estate sector. For example, whereas only 30 garment-manufacturing companies existed in the country in 1980, in 2011, the number had risen to 5,150 with many located in Dhaka. The garments sector now represents 70 percent of Bangladesh’s net exports. Remittances have also proved a robust source of financing, and the change from multigenerational households to nuclear families has increased demand for urban housing. An increase in rents by 250 percent from 1990 to 2007 stimulated investment in real estate. Today, the construction industry employs 2.4 million in Dhaka, which in 2010–2011 contributed about 25 percent of national GDP, of which 19 percent was from private investment.

Regulation of real estate development is rarely effective. Developers require approvals from different authorities whose regulations and approval criteria are poorly coordinated. Combined with limited public sector capacity and temptation by developers to bypass steps in the approval process, disaster risks are rarely assessed and are transferred from poorly regulated developments to public authorities, infrastructure users and private households.

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