Mega projects to woo investors

Bangladesh is supposed to see a constant flow of Foreign Direct Investment (FDI) considering the country offers relatively well-developed infrastructure facilities, a cheap labour force, a lucrative tax policy, etc. However, FDI is not coming as expected by the government. Yet, things on the FDI front can improve markedly by implementing the mega projects in Bangladesh.

Many pertinent observers believe that mega projects are material drivers for accelerating the economic growth of developing countries like Bangladesh, which is transitioning toward development.

The mega projects are likely to successfully address Bangladesh's infrastructure challenges, transport issues, and others sustainably. The timely and successful implementation of the signature projects is intended to make the country exceptionally rewarding in terms of safe investment by upgrading existing physical infrastructure and creating an exemplary business environment.

This view was reflected by speakers at a discussion on 'Foreign Direct Investment Prospects keeping view of National Budget 2022-2023' jointly organised by the Institute of Chartered Accountants of Bangladesh (ICAB) and the Japan Bangladesh Chamber of Commerce & Industry (JBCCI).

ICAB's council member Maria Howlader said in the discussion that Bangladesh is a very fertile place for investment. There are many reasons for the investors to invest, considering human resources, export-oriented industries, and a vast domestic market. She added that the government has taken many business-friendly initiatives, including reducing corporate tax by 2.5 per cent and a 12 per cent uniform tax rate for all exporting companies. And this will reduce the cost of doing business for the investors and boost FDI in Bangladesh. Bangladesh aims to bring FDI of $2 billion in 2022 and $2.5 Billion in 2023. Japanese entrepreneurs will contribute a lot to achieving this target.

Bangladesh has prioritised eight mega-infrastructures as fast-track projects. By doing so, the country is basically planting seeds for a sustainable future. The projects include Padma Bridge and Rail Link, Metro Rail, Chattogram-Cox's Bazar Rail Link, Rooppur Nuclear Power Plant, The Coal-Fired Plant of Matarbari and Rampal, and the Payra Sea Port.

Bangladesh plans to become a developed country by 2041. The mega projects are expected to raise Bangladesh's GDP by four per cent upon successful completion. According to experts, Bangladesh is trying to utilize mega projects as a lever to turn it into lucrative investment destinations by offering tangible benefits e.g., logistics support, and non-tangible benefits e.g., competitive environment.

Be that as it may, only the mega projects will not radically improve the FDI climate of the country. The country needs foreign investment in money and technology transfer, which can be possible only if we make the journey of the investors as hassle-free as possible in setting up industries and running their businesses.

In this regard, some inflexible regulatory terms and conditions need to be amended, as many rules and regulations are often found frustrating to possible investors. Speakers at the discussion stated that simplifying tax administration, devising remittance guidelines, developing proper infrastructure, and creating a skilled workforce are the key features that would help attract more foreign direct investment in the coming days.

The country's business community has been asking for a more enabling environment and business friendly policy, which can be ensured through political will and macro-economic stability; sound policy and regulatory framework supported by relevant institutions; enforcement of laws and regulations; and of course building sound infrastructure. However, things concerning private sector investment have not improved in last five years, and bureaucratic inertia remains a problem. We believe that that unless and until the attitude of the bureaucrats and relevant officials become friendly, and unless existing government rules and regulations are further simplified, FDI growth will not happen the way we want it to.

The stakeholders, particularly the government, must be efficient and timely in implementing the mega projects. If not, the mega project-based development narrative will not create as much timely investment and employment opportunity as it promises.