AT a daylong seminar on investment opportunities organized by the Board of Investment (BoI) in the city on Wednesday, business leaders called the government to modernize the business laws and ensure a congenial atmosphere for FDI. The FDI flow is of utmost importance in the current backdrop of an overall slump in investment in the economy. If FDI falls, it will reduce investment, which in turn will shrink employment generation. These may lead to decline in consumption levels and savings will face a downward trend. There would be, as a result, a contagious pressure on the GDP growth of Bangladesh.
Foreign Direct Investment (FDI) is considered as one of the crucial ingredients for fostering economic development. And in Bangladesh, the FDI has been playing a key role in its modernization process for the decades. But the investment policy based on colonial legacy, poor infrastructure, shortage of power and energy, procedural bottlenecks, lack of proper regulatory framework and political uncertainty spell major challenges to the FDI portfolio. To attract more FDI, the government needs to overcome the challenges in infrastructure, business environment, and trade restrictions by establishing governance.
Despite political uncertainty and acute shortage of power and energy Bangladesh was placed as the second favoured investment destination in South Asia after India, which got $28 billion or 78 percent of the total FDI inflows into the region in 2013. The World Investment Report of the UNCTAD, released on last June, shows the country’s distinguished status on FDI. Inflows of Foreign Direct Investment into Bangladesh rose 24 percent year-on-year to $1.6 billion in 2013 although the country witnessed serious political unrest and an anti-business climate during the period. The telecommunications and banking sectors brought a combined $651 million in FDI last year, while textiles and weaving received $422 million.
Though the Bangladesh Bank Governor urged the foreign investors to avail the advantage of the ample investment opportunities offered by the government marking the country’s stable and resilient financial sector, business leaders called on the BoI for setting up a ‘one stop service’ for the investors to facilitate investment. Due to its strategic location, regional connectivity, worldwide access, industrial workforce, and proven export competitiveness, Bangladesh could emerge as the top favoured FDI destination if the government just complied with the businesses’ suggestions. FDI inflows and major opportunities for foreign investors in the country exist in the infrastructure, manufacturing of light engineering, pharmaceuticals, ceramics, garment and textile, leather and leather goods, service exports, tourism, hotels, IT-enabled service, software and hospitals sectors.
