Improving investment environment

Bangladesh's economy is growing rapidly. Bangladesh's enviable success story in terms of economic development has earned plaudits internationally. To progress further, the country needs foreign investment in terms of money and technology transfer, which can be possible only if we make the investors' journey as hassle-free as possible in setting up industries and running their businesses. Suppose the activities of the recent years are anything to go by. In that case, we have to agree that the government's efforts for attracting foreign investment have increased significantly. Attractive policies have been made and rules have been simplified. In addition to these lands supplies to industrialists, setting up world-class industrial zones with proper infrastructure facilities has been increased. Invitations to investors from different countries are loud and clear now; communication with governments in potential countries has also increased rapidly.

Theoretically, at least, Bangladesh should attract constant flow of Foreign Direct Investment (FDI) considering the fact that the country offers well developed infrastructure facilities, cheap labour force, lucrative tax policy, etc., and yet FDI is not coming the way the government expects it. There must be something amiss somewhere.

Sirajul Islam, the executive chairman Bangladesh Investment Development Authority, recently told this writer that the inflow of inbound foreign investment in the country in 2021 was worth less than one billion dollars. He honestly admitted that the BIDA target has not been achieved in terms of foreign investments. "Foreign Direct Investment (FDI) is targeted at 3 per cent of the GDP by 2025 and 1.8 per cent in 2021, but what happened actually is that FDI is less than one per cent at present."

So, the head of the organisation, which is responsible for developing the investment environment and ensuring services to investors, sounds dissatisfied with the inflow of foreign investment. He also acknowledges that the key factor in real economic development growth in a country is assessed by how much a country can invest and what it is doing to attract investments.

In this connection, it should be mentioned here that the World Bank has stopped its annual global survey on "Ease of Doing Business". The report compared how countries have kept regulatory frameworks, infrastructures, and utility services attractive and easier for investors. HOWEVER, the BIDA head vowed to continue Bangladesh's programmes in terms of ease of doing business, "Whatever the World Bank does, I want to inform all that the reform programmes will continue in Bangladesh. We have to continue with regulatory reforms, process reforms, and in some cases reduce the difficulties in doing business; this is not only to encourage foreign investors but to encourage domestic investors also." At times, many businesspersons and some government functionaries also blame the bureaucracy as the main obstacle to investment. Sirajul Islam points out that while they were working on improving Ease of Doing Business, they found 14 processes for beginning an investment project. "But it is easily possible to omit seven processes." And it will help attract investors.

The BIDA chief admits that Vietnam, India, Indonesia, and Malaysia are still better positioned than Bangladesh in terms of foreign investment. "Relocation of industries from China to Bangladesh is much less than Vietnam. He added that Bangladesh was expecting investments from East Asia, China, Korea, and Japan. Still, investors, there are unable to move abroad. However, the head of the government's investment promotion office has high hopes for Saudi Arabia and US investments in the near future. "Amounts of Saudi investments alone can be much more than what we get annually from all other countries in the world." Sirajul Islam pointed out that Bangladesh's growing trade with the United States will positively impact investment. So, we can expect that investment from the US will also increase. While his assessment is not so optimistic on recent inflows of inbound investment, the BIDA boss is a big supporter of outbound investments from Bangladesh.

Sirajul Islam also welcomed the recent government decision on allowing Bangladeshis to invest abroad. He feels that the capacity of entrepreneurs in some sectors in Bangladesh has reached such a level that they are trying to invest overseas.

Risks of overseas investment that are often discussed here include; the country's foreign currency will fly abroad, and Forex reserves will see a negative impact. However, Sirajul Islam argued "Investors will invest through proper channels; their accounts in Bangladesh Bank will note all the money they take abroad. Now money laundering occurs because it is done without government approval. Still, there is no chance of laundering when the government approves Bangladeshi investment as this is an overseas legal investment." Bangladesh Bank has already made rules that allow foreign investments by Bangladeshis. Still, in most cases, approvals will be made on a case-to-case basis. "Effective policies are needed to encourage Bangladeshis to invest abroad in a big way. Generalised policy must be in place here because case-to-case approvals cannot cater demands of all sectors. Under the current policy, exporters can invest a part of their incomes abroad. Sirajul Islam questions why only garment exporters are encouraged to invest abroad. According to him, remittance markets or labour markets are shrinking abroad. Suppose Bangladeshi entrepreneurs can invest in agriculture farms and projects in the Middle East and elsewhere. In that case, unskilled Bangladeshi workers there can get opportunities for jobs. And such types of investments abroad by Bangladeshis should also be approved.

The writer is a media professional. She can be contacted at julia.labonno@gmail.com