Ensuring FDI inflow

Many experts believe that Bangladesh deserves a constant and steady inflow of Foreign Direct Investment (FDI) considering the fact that the country offers well developed infrastructure, huge cheap labour force, lucrative tax policy, etc. Yet, it is unfortunate that FDI is not coming the way it is expected by the government. It is natural to assume that something is amiss somewhere. There are some pertinent factors that the experts consider major obstacles on the way to attracting more FDI.

Organising promotional campaigns in different prospective countries is an efficient way to attract FDI. An 86-member business delegation of the Dhaka Chamber led by its President Rizwan Rahman attended a forum on “Exploring trade and investment opportunities between Bangladesh and Turkiye” in Istanbul organized by Foreign Economic Relations Board of Turkiye (DEIK) recently. Rizwan Rahman reiterated the need for holding promotional campaigns in Turkiye to attract FDI. Rizwan said Bangladesh is ready to take Turkish investment right at this moment. It needs to be figured out if there are any tariff and non-tariff barriers in terms of exporting to Turkiye. He also stressed on knowledge transfer and technology transfer, research and knowledge sharing.

 Foreign funds traditionally land in the countries where doing business is easier, fair market practices prevail, dispute resolution system works smoothly, intellectual property rights are protected, policies affecting foreign investors remain consistent — and above all — where foreign investors can feel at home.

The cost setting up a business in terms of delays in getting permission from different government offices is a factor that needs to be looked into if we want to attract FDI. The cost of setting up a business in terms of delays in getting permission from different relevant government offices is a factor that needs to be looked into if Bangladesh wants to attract FDI. Often foreign investors express their frustration at bureaucratic obstacles they face in getting important documents like land deed, trade licence, TIN, clearance from the department of environment, electricity connection, port clearance of capital machinery and raw materials, water and gas connection etc.

Bangladesh also needs to add more services for possible investors to make doing business lot easier than now. The One Stop Service (OSS) wing of Bangladesh Investment Development Authority (Bida) offered 18 information-related services. Recently it has added 11 more dedicated services on its website.

The incumbent government has been giving a lot of importance to easing the process of setting up and running businesses by foreign investors. In this regard we may recall that Bangladesh Investment and Policy Summit 2016 was held on 24th January to showcase investment opportunity for private entrepreneurs. A group of foreign investors comprising experts on foreign direct investment and industrial and international trade, and policymakers had joined the Summit.

Bangladesh is striving hard to reach the milestone of middle-income status within the shortest possible time. But to reach that target, some obstacles that continue to thwart smooth navigation need to be addressed without further loss of time. The country needs foreign investment in terms of 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.

But the pertinent question is, will the cost of setting up and doing business in Bangladesh decrease substantially after all these projects begin operation? Will the unnecessary obstacles be removed once and for all so that foreign investors may find a safe haven in Bangladesh to invest money and take back their share of the profit?
It is strongly believed that unless and until the attitude of the bureaucrats and relevant officials become friendly and unless existing government rules and regulations are simplified, FDI growth will not happen the way we want it to. 

Bangladesh needs to diversify the main origins of FDI inflows with better economic diplomacy. Investment pledges from different countries needs to be pursued vigorously.