Khulna, once a key industrial hub in Bangladesh, faces ongoing challenges as it grapples with the effects of deindustrialisation, climate change, and urban growth pressures. The city’s historical economic foundation, built on jute, textiles, paper, newsprint, and other manufacturing sectors, has eroded over recent decades, raising critical questions about the future of urban planning and economic development in the region.

During the mid-20th century, Khulna’s industrial areas, particularly Khalishpur and Daulatpur, served as major employment centers, supporting approximately 30,000 mill workers and sustaining the livelihoods of roughly 100,000 people connected directly to the industry. This industrial activity spurred the development of planned residential neighborhoods, educational and healthcare facilities, markets, and transport infrastructure, creating a vibrant urban environment tied closely to manufacturing growth.

However, the decline of traditional industries, exacerbated by factors such as changing industrial policy, insufficient modernization, and institutional weaknesses, has undermined Khulna’s economic base. The closure of state-owned jute mills in 2020 marked a notable milestone in this downturn. Unlike cities that have successfully transitioned to service-led economies, Khulna has struggled to establish diversified economic activities to offset industrial job losses.

Amid these shifts, informal economic activities have expanded, with many residents engaging in street vending, small-scale commerce, transport, and casual labor. This informal economy reflects not only individual entrepreneurial efforts but also broader structural issues, including limited formal employment opportunities, migration trends, and social networks that shape livelihoods in Khulna.

The city’s challenges intensified following the impacts of Cyclone Sidr in 2007 and Cyclone Aila in 2009, which caused salinity intrusion, waterlogging, and livelihood insecurities. These environmental pressures have driven climate-affected populations towards Khulna in search of work and shelter, further straining housing, infrastructure, and urban services.

Current urban development in Khulna shows patterns of peripheral expansion into agricultural and low-lying areas, fragmented residential growth, and uneven infrastructure provision. These trends highlight a disconnect between traditional land-use planning approaches and the complex socio-economic realities of a city confronting economic restructuring, environmental risks, and demographic changes.

Experts argue that conventional master plans, focused mainly on physical land use and infrastructure, have inadequately addressed employment generation, social inclusion, and the informal economy. There are noted gaps between planning ambitions and actual implementation, with insufficient mechanisms to evaluate the progress of proposed policies and interventions.

Going forward, a shift toward integrated, strategic, and people-centered urban planning is deemed essential for Khulna. This involves economic revitalization efforts that leverage the city’s connections to Mongla Port, regional transport networks, universities, and surrounding agricultural and coastal economies. Potential growth sectors include logistics, agro-processing, light manufacturing, and knowledge-based industries. Redeveloping underutilized industrial land through comprehensive strategies that consider environmental and social factors is also seen as crucial.

Revitalizing the workforce through education, skill development, and entrepreneurship is imperative to harness Bangladesh’s demographic dividend, which Khulna has struggled to fully capitalize on due to its industrial decline. Planning must also acknowledge the informal sector as an integral component of the urban economy, providing appropriate spaces and services to support informal livelihoods rather than displacing them.

Housing policies should prioritize inclusive approaches that emphasize in-situ settlement upgrading, affordable rental options, and community-led initiatives, particularly for low-income households and climate migrants. At the same time, protecting productive agricultural land from unchecked urban sprawl is necessary to sustain the surrounding rural economy and ecological functions.

Climate resilience must be central to Khulna’s urban development, given its vulnerability to flooding, salinity, and extreme weather events. Land-use decisions should integrate ecological considerations and address the social vulnerabilities of populations living in exposed areas.

Improved metropolitan governance, with coordinated planning efforts among various institutions and neighboring jurisdictions, is vital to manage Khulna’s extended economic and ecological systems effectively. Urban planning should evolve into a continuous, adaptive process supported by transparent implementation frameworks, public participation, and accountability measures.

Drawing lessons from international examples, such as London’s Docklands regeneration, local authorities are encouraged to adopt an entrepreneurial planning approach—actively facilitating investment and economic transformation while safeguarding against speculative development and social exclusion.

Khulna’s experience underscores the broader challenges faced by rapidly urbanizing cities in Bangladesh where historic industrial advantages are fading. The future of Khulna hinges on a comprehensive urban strategy that balances industrial regeneration, economic diversification, social equity, climate adaptation, and sustainable land use, ensuring improved livelihoods for its residents rather than focusing solely on physical expansion.