MEDIA report said Bangladesh Bank has turned request from three leading business firms to make foreign currency investment in three countries – one in Africa, another in a Caribbean country and a third in Malaysia. The move has raised basic question whether Bangladesh should open up capital account for transfer of fund abroad when investment in domestic sector deserves priority considerations. It is important to accelerate the country’s socio-economic development and on top of it we need creating more jobs and income generating activities for our younger people. It is not time we create jobs for others when developing mega infrastructure projects such as ports and roads call for urgent investment. We have around US$ 32.55 billion foreign currency reserves laying idle in Central Bank and we must work on plans to use the fund to finance big projects.
But as it appears our government is failing to show competence to utilize the big reserves raising question that a huge reserve itself is not enough to be happy without its effective use for development. So our entrepreneurs are showing growing interest to make investment abroad when big local investment remains risky for various reasons. This is a big dilemma to keep reserves idle without investment and in our view we must have new thinking and mechanism to use the fund. Bangladesh Bank said the government is going to set up a sovereign wealth fund for investment in big projects. But we are talking more than working and moreover, we need to find more opportunities for investment for the unused reserves.
The three proposals for forex investment include one for Haiti where the business house wants to set up a garment factory for export to USA and European countries. The investment to Africa is meant for Gambia where the sponsor wants to set up a bank. The investor in Malaysia wants to buy a fireboard and hardboard factory. All three-investments together involve a total of US$ 37 million.
There is no doubt our investors have already acquired capacity to set up business abroad and effectively run them. As per Bangladesh Bank disclosure some of them have already set up factories in over a dozen countries and surviving in global competitiveness. We are already global and our business houses are running their business well although it is not clear how they got the capital transferred. In our view we should have a transparent business expansion plan abroad for our private business houses backed by proper fiscal accountability and regulatory guidelines.
Bangladesh Bank governor said opening capital account is problematic but he is agreeable to allow more liberal use of export retention quota, which is part of the export earning of an exporter he can hold back for use in business. We fear that demand for more investment abroad will grow if the government fails to create greater investment opportunities in the domestic sector.
But as it appears our government is failing to show competence to utilize the big reserves raising question that a huge reserve itself is not enough to be happy without its effective use for development. So our entrepreneurs are showing growing interest to make investment abroad when big local investment remains risky for various reasons. This is a big dilemma to keep reserves idle without investment and in our view we must have new thinking and mechanism to use the fund. Bangladesh Bank said the government is going to set up a sovereign wealth fund for investment in big projects. But we are talking more than working and moreover, we need to find more opportunities for investment for the unused reserves.
The three proposals for forex investment include one for Haiti where the business house wants to set up a garment factory for export to USA and European countries. The investment to Africa is meant for Gambia where the sponsor wants to set up a bank. The investor in Malaysia wants to buy a fireboard and hardboard factory. All three-investments together involve a total of US$ 37 million.
There is no doubt our investors have already acquired capacity to set up business abroad and effectively run them. As per Bangladesh Bank disclosure some of them have already set up factories in over a dozen countries and surviving in global competitiveness. We are already global and our business houses are running their business well although it is not clear how they got the capital transferred. In our view we should have a transparent business expansion plan abroad for our private business houses backed by proper fiscal accountability and regulatory guidelines.
Bangladesh Bank governor said opening capital account is problematic but he is agreeable to allow more liberal use of export retention quota, which is part of the export earning of an exporter he can hold back for use in business. We fear that demand for more investment abroad will grow if the government fails to create greater investment opportunities in the domestic sector.
