Home ›› 13 Mar 2023 ›› Front
Despite having a huge potential for investment in Bangladesh due to its geographical location, cheap labour force and other facilities, low sovereign credit rating discourages Japanese investors from investing in the country.
The Japanese delegates have also suggested improving the business environment, reforming the policies, developing the technologies and forming mutual groups to attract foreign direct investment (FDI) in Bangladesh.
Myung-Ho Lee, Country Representative for Bangladesh, Mitsubishi Corporation, and President of Japanese Commerce and Industry Association (JCIA), made the remarks at a programme titled “Japan-Bangladesh Trade and Investment: Opportunities and Way Forward” at Bangladesh Business Summit 2023 held at Bangabandhu International Conference Centre in the capital on Sunday.
“Bangladesh is a potential country for investment but its sovereign credit rating is still very low which may discourage investors from investing in the country. The rating should be improved soon,” Lee said while addressing the programme as a panel discussant.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has organised the three-day summit in collaboration with the commerce and foreign ministries as well as Bangladesh Investment Development Authority (BIDA).
Prime Minister Sheikh Hasina on Saturday inaugurated the event organised by the country’s apex trade body marking its golden jubilee.
According to Moody’s Investors Service on December 9, 2022, the credit rating for Bangladesh was set at Ba3 under review outlook. On August 25 last year, S&P Global Ratings affirmed its ‘BB-’ long-term and ‘B’ short-term sovereign credit ratings on Bangladesh.
Lee, however, sought direct communication with the government of Bangladesh to discuss any issues of investment and business activities.
“Japan and Bangladesh have been maintaining a strong relation since 50 years. Many Japanese businesses are investing in different development projects here. Direct communication with the government body is needed to facilitate the activities,” he added.
Takeshi Mamiya, Regional CEO, ASEAN & Southwest Asia, Marubeni Corporation, and Representative from Japan- Bangladesh Committee for Commerce and Economic Cooperation (JBCCEC), said 340 Japanese companies have been working with different sectors like textile and infrastructure in Bangladesh.
“The readymade garment sector contributes around 80 per cent to Bangladesh’s foreign currency earnings. Japan textile machinery industry has continued extending support here with its products. It can continue to provide high-efficient technological solutions the industry needs from time to time,” he added.
Takeshi also said that with Bangladesh graduating from the LDC status in 2026, signing of Economic Partnership Agreement (EPA) between Japan and Bangladesh is very important for continued development of the textile sector.
“Many Japanese companies are now showing interest to invest in Bangladesh. The country should improve its business environment, reform policies, develop modern technology and create mutual groups to draw FDI in Bangladesh.”
In his speech, Japanese Ambassador to Bangladesh Iwama Kiminori said Bangladesh is a fast-growing economy in the south Asian region.
“There is a strong relationship between Bangladesh and Japan over 50 years. We hope that more Japanese companies will focus on Bangladesh. In future, Japan would continue its support to Bangladesh,” he also said.
BIDA’s Executive Chairman Lokman Hossain Miah said Bangladesh is a good destination for investment among the south Asian region as the country is providing all necessary support for investors.
“It is a profitable place for investment. BIDA provides one-stop service to facilitate the business activities. Any investor can contact me directly to resolve any problems they facing in the country,” he added.
In a video message, Foreign Minister Dr A K Abdul Momen said Japan is a ‘reliable’ friend of Bangladesh. “Our bilateral trade relation is very strong as well. We have received a lot of support from Japan. Some $60 billion founding came from Japan in last 50 years. Many projects are being funded by Japanese companies.”
Momen further said that Bangladesh has set up a special economic zone for Japanese entrepreneurs on 1,000 acres of land at Araihazar in Narayanganj to attract the investors.
“There are a lot of sectors like energy, IT, blue economy, semiconductor, jute and SME in Bangladesh. We request Japanese investors to invest in Bangladesh. The government will provide all necessary support for investors,” the foreign minister also said.
Long-term finance markets
At another session of the summit titled “Developing long-term finance markets to support new growth opportunities,” Bangladesh Bank Governor Abdur Rouf Talukder said the central bank will introduce a market-based reference rate, a development that can be seen as an initiative of withdrawing the ceiling of the interest rate on loans.
“The central bank is working to develop a market-based reference rate. We would give a corridor for the lending rates. I hope that Bangladesh can reach a trillion dollar economy by 2037,” he added.
