Home ›› 11 Feb 2023 ›› Front
Even though the government of Bangladesh claims that the country is the ‘best place’ for investment owing to its geographical location and a range of facilities in economic zones, it fails to attract ‘reinvestment’ as expected from different countries particularly those in Latin America.
In last one decade, Bangladesh received a total of $14.11 million investment from Uruguay, Bolivia, Chile, El Salvador, Mexico, Peru, and Panama, but no country reinvested in Bangladesh.
According to the Bangladesh Bank’s latest data, Bangladesh received foreign direct investment (FDI) between FY13 and FY22 from these countries. Bangladesh received only $12.53 million FDI from Panama in FY22 while $0.47 million from Peru in FY21, and $0.49 million from Mexico in FY20.
Bangladesh received $3.43 billion net FDI in the fiscal year 2021-22 which was $2.50 billion in the previous fiscal year, the central bank data showed.
According to Export Promotion Bureau (EPB) data, Bangladesh exported products worth about $904.5 million to the Latin and Caribbean countries in the FY22.
However, economists and people involved with the sector blame the geographical distance, language barrier, lack of cooperation from ministries and others concerned, Letter of Credit (LC) opening complexities and transportation problems for poor reinvestment.
Monitoring cell must to attract investors
Latin America-Bangladesh Chamber of Commerce and Industry (LA-BCCI) president Md Anwar Shawkat Afser told The Business Post that many foreign investors look for better places for investment.
“An investor does not make reinvestment when he is harassed or counts loss in business. Investors always want quick services and business-friendly environment but how much such services we can ensure,” he questioned.
He said, “We don’t need to campaign for investment. If an investor is satisfied and can make profit, 10 investors will come enthusiastically. So, we must ensure a better environment for investors to bring them back for the sake of more FDIs,” he added.
Afser, also the managing director of Sakhi Group, claims that investors don’t get quick services to start a business in Bangladesh. There are no official consultancy firms who will support foreign investors. “A cell should be formed to monitor foreign investors so that they don’t face any problem.”
“BIDA’s OSS is not enough for resolving all problems. A consultancy platform should be formed in cooperation with BIDA, BEZA, BEPZA, commerce ministry, and chambers. They will resolve packages from all sides as many documents are needed to run business here. It may save time and ensure quick services.”
Besides, he said, foreign investors backtrack on their plans to make investment due to lack of trusted partners. “There are many chambers in Bangladesh. The government should give the chambers the task of monitoring all matters too. It will help bring in more FDIs. Actually, cooperation is needed among all,” he added.
“Now a ship needs 20 days to reach Chattogram port from Latin America after making stopover at two to three ports in Dubai, Singapore or EU. So, it puts an impact on carrying cost of products. The air transportation system is also the same. If we can communicate directly among the countries, it will definitely boost our business potential.”
The LA-BCCI president claims that businessmen have to face a lot of hassles while getting visa from India. Even many don’t get visa too.
“We have a chance to explore $10 billion export potential in Latin America by next five years. So, we should work here to strengthen business ties for the sake of FDI and export earnings,” he added.
Coordination needed for quick service
Talking to The Business Post, president of Argentina-Bangladesh Chamber of Commerce & Industry (ABCCI) Talukder Alim Al Razi said Argentinian investors did not invest in Bangladesh due to a lack of promotion on investment facilities. Once Argentinians didn’t know Bangladesh, now they are introducing different types of products. As a result, trade relationship is also being strengthened. The ties will bring more foreign direct investment (FDI).
“We noticed that Bangladesh received some FDI from several Latin American countries but perhaps they backtracked due to several reasons like long distance, lack of cooperation from authorities concerned, and language problem. Even they did not get services as per their expectation. Buyers don’t get quality products as per their demand or they got better options in other countries like China and Vietnam,” he added.
He recommended that the country should arrange more fairs in Latin American countries to promote the products made in Bangladesh, and offer investment opportunities.
“Hence, cooperation is needed among Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA), Commerce and Foreign ministries as well as Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).”
He added that the foreign minister of the Argentine Republic has recently announced plan to reopen the embassy in Bangladesh. If the embassy is reopened in Dhaka, the potential of the bilateral relation will be exploited mainly in the commercial aspect.
“Investors and other businesses can communicate directly and do business quickly and easily as now we have to spend 30-40 days extra being its embassy in India,” the ABCCI president also continued.
Managing Director of Worldwide Bangla Industries Abul Hossen Sabuj said since 2019, he has been exporting medicines to Latin American countries, including Dominican Republic, Haiti, Costa Rica, El Salvador, Peru and Venezuela.
“It is time to lay emphasis on trade and investment issues in the countries of Latin America to achieve the developing country status by 2041. Then Bangladesh will get more FDIs. We need many attested certificates or documents to do business and export products. But we can’t do those timely,” he added.
He said that Bangladesh’s RMG products, pharmaceuticals, leather products, jute and jute goods, foodstuff, light engineering items, and sports products are in good demand in the regions. Besides, Bangladesh can import various chemicals, finished products, soybean, maize, scraps, and rawhide from the countries at reasonable prices.
Bangladesh should invite selected investors
Chairman of Policy Exchange of Bangladesh Dr Masrur Reaz, also former Senior Economist of World Bank Group, said not getting good return is the key reason behind lack of investment.
“Besides, the long distance between South Asia, particularly Bangladesh and South American countries is impeding FDI inflow here. There are also cultural and other trading issues,” he added.
The economist also said that Bangladesh should promote its products in the regions based on target. “We should invite the investors of the countries scrutinising business involvement. And we should provide better services compared to others.”
Traders’ visit to Brazil, Argentina will boost FDI
BIDA Executive Member Md. Matiur Rahman said Bangladesh has huge scope to boost FDI, but they can’t increase it due to a lack of proper campaign.
“We took plans that we will invite some target-based investors for making investments in Bangladesh. We hope that we can boost the flow of inward investment sharply through proper campaign. Keeping this in mind, we are going to hold B2B meetings in EU and Latin America,” he also said.
Matiur added that they have already sent a proposal to the Prime Minister’s Office for approval to make the visit successful. “But we have yet to get any update.”
The government of Bangladesh is taking initiatives to enter the Latin American market to boost exports as well as attract foreign direct investment (FDI).
A Bangladesh trade delegation will visit Brazil and Argentina next month with the aim to open a new business window there and to explore a $10 billion export potential by the next five years.
A 70-member business delegation led by Salman F Rahman, the prime minister’s private industry and investment adviser, will visit the two countries in the first week of March.
To make the visit successful, the LA-BCCI will immediately sign memorandums of understanding (MoUs) with BIDA, Bangladesh Economic Zones Authority, and Bangladesh Hi-Tech Park Authority.
