Whilst evidence on the absolute magnitude and relative share of the manufacturing sector in the economy is still indeterminate, the varieties of available data appear consistent in suggesting that in the eighties there has been little in the way of dynamic growth or structural change in the industrial sector of Bangladesh. How far has this weak industrial performance owed to inadequacies in the industrial policies?

Past attempts at establishing causality as between data on performance and the prevailing policy regime has been hardly definitive for Bangladesh. The present paper discusses three central limitations of Bangladesh’s past industrial policies: (i) the absence of strategic vision in the formulation of industrial policies, (ii) prevalence of ideological predilections over pragmatic and empirical considerations specially in the matters of ownership of enterprises and (iii) the abortive attempt at promoting private industry through public credit.

Drawing on the lessons from the experiences of China, India and the East Asian Newly Industrialising Countries (NICs), a redirection of Bangladesh’s industrial policy is suggested essential elements of which include (i) pursuance of rural oriented development strategy for broadening the market for domestic industry  (ii) prior identification of industries to be developed to serve the domestic market and those to serve the external market (iii) building up an indigenous entrepreneurial base and investible surplus in the industrial sector through the provisions of domestic captive market and attractive profit rates in industry compared to those in intermediation and (iv) simultaneous promotion of export oriented industries through purposeful and planned intervention based on carefully studied analysis of the changing structural features and comparative advantage of the domestic economy in relation to the dynamics of global economy.