Kazi Zahidul Hasan :The overall foreign direct investment (FDI) to Bangladesh remained sluggish and declining in the recent past due to lack of necessary structural and regulatory reforms, economists said on Tuesday.Apart from this, they said, absence of policy continuity and congenial political environment and adequate infrastructure are other major reasons behind the slow flow of FDIs to the country.”FDI is positively correlated with the economic growth of Bangladesh, but it has not yet been tap the opportunity due mainly to a lower FDI inflow into the country,” Dr Zahid Hussain, lead economist, the World Bank’s Dhaka office, told The New Nation on Tuesday.He said, FDI inflow in Bangladesh remained low compared with other countries in the region due to lack of investment-friendly regulatory regime coupled with policy inconsistencies from the government.FDI in Bangladesh came down to US$1.526 billion in 2014 from $1.599 billion a year ago, whereas FDI in Bangladesh grew to $1.6bn last year, whereas Vietnam, which is benefiting from a similar demographic dividend to Bangladesh, attracted $24 billion FDI during the period. Bangladesh’s next door neighbour India received $23 billion FDI in 2014.”The recent trend of FDI inflow clearly suggests that Bangladesh underperformedin attracting foreign capital inflow into as it failed to pursue the major variables in line with its regional competitors,” he said.Dr Zahid further said that the regulatory bodies, including the Board of Investment, have lost their credibility due to their poor service delivery. Bedsides, they have also failed to infuse organizational dynamism, driving away the potential investors to other countries. When asked, he said, Bangladesh may not been able to successful in attracting a significant amount of FDI unless a structural and regulatory reforms should put in place. The regulatory bodies should improve their service delivery with inclusion of profession people in their boards. He also pointed out that the country does not have adequate infrastructure to meet the demands of prospective foreign investors. A rapid improvement in the areas is a must to attract sufficient FDI here.”Bangladesh can accumulate huge foreign capital by pursuing outward-oriented development strategies and proper policies. If it happens, it is likely to achieve higher rates of economic growth than those of its regional competitors,” he noted.”The overall FDI inflow into Bangladesh remained sluggish due mainly to political instability and inadequate infrastructure,” Dr AB Mirza Azizul Islam, a former adviser of the Caretaker government, told The New nation on Tuesday.Apart from this, he said, high cost of doing business and high corporate tax, power and gas crisis and lack of necessary regulatory reforms are major deterrents to bringing in FDI.”It is difficult to woo fresh foreign investment when such a situation is prevailing in the country,” he said, adding, “This situation may not improve as soon as once such barriers are removed,” he added. “Bangladeshi is apparently fails to ensure enabling conditions for the foreign investors, resulting drop in FDI inflow into it,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) governor, told The New Nation yesterday.He added, the government must ensure these conditions at all costs to meet the demands of prospective foreign investors. The former BB governor further said that the government should pay more attention in attracting overseas investment because it is a catalyst to its economic development. The government must work harder at creating a friendlier environment for the foreign investors if Bangladesh’s economy is to live up to its potential.
