The European Union Ambassador Charles Whiteley said on Tuesday that Bangladesh should make regulatory and taxation reforms along with building level playing fields for local and foreign firms to attract more foreign direct investment from the European Union. However, what the ambassador said is not only true about attracting investment from the EU, this kind of reform is necessary for attracting investment from other countries as well.
For generating growth, Bangladesh needs more domestic as well as foreign investment. But after the Covid-19 pandemic and fallout of the Ukraine- Russia war and the Bangladesh government’s own failure to ensure good governance, the investment scenario in the country is not presenting an encouraging picture.
There are reasons for this. One of them is the lack of necessary infrastructure. For smooth industrial production, smooth power supply is necessary. But the ongoing countrywide load shedding is ample proof of the fact that Bangladesh is still far from achieving the ability of giving uninterrupted power supply to the country’s industries. This poor power condition will certainly not give confidence to foreign investors to come to Bangladesh.
Then there is the country’s notoriously slow moving and corrupt bureaucracy. At a time when remittance is not showing a healthy trend, and there is the rising nonperforming loan from the domestic side, the economy of Bangladesh is going to face more formidable challenges ahead.
There are also external factors that are impacting the country’s economy negatively. After the depreciation of different currencies against the US dollar, recovery of the European Union economies may be difficult at present. But the fact of the matter is European countries are the primary destination of Bangladeshi exports including the RMG.
Moreover, the economy of Bangladesh is now very unstable with rising food inflation, steep fall in the foreign reserves and rising fiscal deficit and public debt. Still, the sudden hike in fuel price has not only made maintaining life for a large section of people difficult, the increased price of fuel coupled with load shedding has made industrial production costly.
The EU ambassador while attending the 16th annual general meeting of the International Business Forum of Bangladesh at a city hotel said that sky is the limit for EU’s investment in Bangladesh. But conditions that prevail within the country are really depressing; and encouraging words from the ambassador do not create hope in us.
Therefore, it is futile to expect European FDI in Bangladesh despite huge opportunity due to the chaotic conditions created by a government of police power, deep corruption and no guarantee for the rule of law.
