ACCORDING to local news, the cabinet endorsed lifting of an embargo that has been in place since our independence on making investment in foreign countries by local businesses and individuals, under a liberalised foreign exchange regime. Reports added that the preferred sectors in the new investment criteria include deposits in banks and investments in stocks, real estate and other industrial units in foreign countries. According to the reports, the Foreign Exchange Regulation Act 1974 would thus be amended suitably to fit the proposed changes in the investment regulations.
National dailies also showed that shady businesses, corrupt individuals and tax evaders investing their ill-gotten money in securities and immovable property in lucrative foreign destinations will also come under the scanners of regulatory agencies, including Bangladesh Bank, according to the proposed FERA act. The move to amend the FERA was largely dictated by the International Monetary Fund, sources at the BB clarified. Further information showed that eminent economists censored the government’s plan for wholesale liberalisation of foreign exchange regulations. They said blanket deregulation in the economy as a whole, and capital account convertibility in particular, would turn sour for the economy which is struggling for local and overseas investments and faces a resurgent unemployment problem.
Knowing our track record, the experts may very well be right about the negative consequences. If regulated properly by the State and kept away from corrupt officials though, this move can turn into a breakthrough for the Bangladesh economy. Investment flow into and out of any economy has a significant impact on the financial status of a country. Theoretically, the deregulation is a mixed blessing. It depends on how the option is used and in what manner. Here, impartial observers doubt much about its misuse.
Conventional experiences support that the neo-rich class has in the meantime siphoned their ill-earned black money outside the country which they have either piled up in Swiss Banks or in Second Home Projects or otherwise through black channels. Conservatives doubt that this lifting of embargo i.e. opening the legal doors would only make it easier for the corrupt ones – mostly moving inside the power corridors – to transfer their piled up booty through the official channels putting the Public Exchequer empty or in trouble.
