POOR governance, administrative hassles and lack of infrastructure are discouraging potential foreign direct investment in the country alleged the FICCI. The Foreign Investors’ Chamber of Commerce and Industry on Monday said, although Bangladesh is placed as the second favourable investment destination in South Asia after India but the country is far behind Indonesia, Thailand and Philippines in terms of FDI inflow. The inflow of FDI into Bangladesh rose 24 percent to $1.6 billion in 2014 but it was not diversified. As the country’s economy is under a serious blow caused by capital market problems, corruption in banking sector, government debt to commercial banks, money laundering by high-ups, political turmoil centering the January 5 one-sided election, lack of confidence among local investors, disrupted diplomatic relations, absence of the rule of law and terrible poor-governance, the government should take steps to enable the economy to breathe.
Businesses, the foreign investors in particular, have been demanding infrastructure development, availability of power and gas supply, political stability, speedy bureaucratic mechanism and corruption free administration for a hefty FDI inflow, a major component of economic advancement. FDI inflow in diverse sector is essential as the country’s export is currently heavily dependent on readymade garments industry. Such dependence on a single sector is very risky. Business leaders in a conference on Monday opined that in order to boost export earnings, expansion of export base is a must and the government should undertake an immediate action plan to this end in consultation with the business community. They also demanded immediate improvement of the poor-governance that has engulfed the country.
Moreover, a gazette notification circulated by the Industries Ministry has excluded Chief Executive officers and Managing Directors of multinational companies from CIP (Commercially Important Person) status, that made the business community anxious. Businesses are afraid that the decision will be seen as a discriminating policy and may give a wrong message to the potential investors. The Commerce Ministry should reconsider the CIP status.
Over dependence on garment sectors is also harmful for the country’s exports. The businesses should emphasise on leather goods, pharmaceutical products, IT-software, handicraft, bicycle and other potential sectors. Bangladesh’s unique geographical location, coupled with cheap labour and raw materials made the land suitable for investment, but the absence of good governance, political instability, lack of infrastructure, all-pervasive corruption, and obsolete policy are hindering the investors to invest in the country. To overcome the situation an elected government is the main precondition, which could be able to boost FDI inflow by enabling political stability, good governance, infrastructure development and by launching jihad against corruption. It is political uncertainty and political instability which is keeping investment away.
