Results from applying the Growth Di

Results from applying the Growth Diagnostic framework to the garment sector show thatenergy is the most binding constraint to growth. There is substantial evidence indicating thatthe shadow price for electricity is high and that a large number of firms are attempting to bypassthis constraint through the use of electric generators. Additionally, exposure to power outages isa key contributor to firm productivity, suggesting that removal of this constraint would have apositive impact on growth. Finally, firms selected electricity as the second biggest constraint totheir firms in the 2013 Enterprise Survey. At the same time, there is evidence that humancapital is a binding constraint to the garment sector. The average educational level of afirm’s workforce provides a significant contribution to productivity and it has been identified asone of the most binding constraints for the sector by the World Bank and IMF. It has also beenidentified a major obstacle to doing business by Bangladeshi firms.