IN observations of the US government in ‘Investment Climate Statements-2015’ experts highlighted corruption in Bangladesh as the biggest impediment to harnessing foreign investment to accelerate economic growth. The statement said the government commitment to combat corruption is inconsistent with the enforcement of the commitment. News reports on Monday on the US government position in this matter said Bangladesh received $1.5 billion in foreign direct investment (FDI) in 2013-14, up from $ 990 million in the previous year is quite praiseworthy. But in its opinion the country’s FDI inflow could be much higher during this time if there were more improvement in infrastructure building, removing financial constraints, political unrest and bureaucratic delays. It said corruption continued to slow down arrival of FDI in the country. It said corruption is common in public procurement, tax and customs collection, regulatory authorities which also include bribery to raise the costs and risks of doing business. This in turn has deterred investment, stifled economic growth, distorted prices and undermined the rule of law. The US government has moreover blamed weak and slow legal system, poor labour rights and a stiff rise in non-performing loans and loss making state-owned enterprises are few more factors that need to be improved to attract more FDI’s by improving good governance and investment climate.
The US government report has blamed the present government for inadequate enforcement of law and insufficient policies to combat bribery, stop embezzlement of fund and other forms of corruption to clear the way of unhindered growth of FDI in the country. Its present situation is inconsistent to what it has pledged. Moreover, although Bangladesh is a party to UN Anti-Corruption Convention, it is yet to join the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Public Officials.
The US government report on investment prospect in Bangladesh has further referred to insufficient progress implementing labour laws in Bangladesh that led to suspension of GSP facility for duty-free export to the US market. The extra-judicial killing by Rapid Action Battalion (RAB) is also hurting the country’s case for higher FDI inflow to Bangladesh.
In fact what the US report on investment situation in Bangladesh said is nothing new in it, they have reminded the matter again as Bangladesh is a growing candidate for more foreign investment. But it appears that the government has made it a point to turn a blind eye on governance issues by combating corruption, which is highly unacceptable to people at home and abroad particularly in decision-making process regarding putting big money in big projects. There is no doubt, corruption has to go and legal and taxation system must improve. Performance of banking sector and public enterprises must improve to give a message to the global community that serious efforts are at work here to improve the investment environment for more FDI. There must be highly credible actions in this regard.
