Corruption and slow adoption of alternative dispute resolution mechanisms are hindering foreign direct investment inflow and it has become necessary for the ministries concerned to take coordinated steps to remedy that to boost FDI influx, experts have said.
They said the FDI inflow is decreasing in Bangladesh amid the US dollar shortage but it is increasing in Vietnam at the same time. So, Bangladesh needs to take prudent measures to fix and control the situation.
They came up with the views at a webinar, on “Foreign Direct Investment (FDI) in Bangladesh: Current Status and Prospects,” organised by the Institute of Chartered Accountants of Bangladesh (ICAB) on Tuesday.
Until July 20, 2023, the total newly registered capital, adjusted and contributed capital to buy shares and buy contributed capital of foreign investors in Vietnam reached around $16.24 billion, up 4.5 per cent year-on-year, according to the Planning and Investment Ministry of Vietnam.
On the other hand, according to Bangladesh Bank’s balance of payments data, the net FDI in FY2022-23 decreased by 11.82 per cent to $1.61 billion from $1.83 billion in FY2021-22.
The gross FDI inflow during July-June of FY23 also fell year-on-year by 2.82 per cent to $4,503 million from $4,636 million. FDI inflow in Bangladesh is low compared to that of many other countries at similar levels of development.
Addressing the webinar, Centre for Policy Dialogue’s Research Director Dr Khondaker Golam Moazzem said the government’s efforts to improve the business environment in recent years show promise but implementation in some sectors has yet to materialise.
ICAB President Md Moniruzzaman said FDI is considered a potent weapon for developing an economy like Bangladesh and can play an important role in achieving the country’s socio-economic objectives.
“It can act as a significant vehicle to build up physical capital, create employment opportunities, develop productive capacity, and enhance the skills of local labour through the transfer of technology,” he added.
Presenting the keynote, Bangladesh Investment Development Authority Director Md Ariful Hoque cited some government policies, provisions for incentives, and protection of investment in the country.
He said that in Bangladesh, local and foreign investments are given equal treatment as 100 per cent foreign equity is allowed along with unrestricted exit, almost all industrial sectors are open for foreign investors, bilateral Investment treaties (BITs) have been signed with 32 countries as well as double taxation treaties with 28 countries including Sri Lanka.
Bangladesh is also a signatory to ICSID, UNCITRAL, OPIC, MIGA, WAIPA, WIPO and WTO and all laws and on top of that, regulations are conducive to investment, he added.
He also discussed sector-wise investment by foreign companies in Bangladesh.
Rafikul/Awenim/
