Overseas investment policy demanded
It will impede capital flight: Businesspeople
Staff Reporter
Businesspeople at a seminar yesterday echoed the necessity for policy reform for overseas investment to prevent capital flight which will create platform for local entrepreneurs to grab investment opportunities outside the country.
President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Abdul Matlub Ahmad, placed the proposal to Dr. Mashiur Rahman, economic affairs adviser to the Prime Minister Sheikh Hasina, at a seminar titled Overseas Investment by Bangladesh Entrepreneurs at BRAC centre in the capital.
The seminar was organised by the International Business Forum Bangladesh (IBFB).
Abdul Matlub Ahmad said the contribution of private sector is undeniable at this moment in Bangladesh.
For a small economy like us, policy restrictions for investment would be harmful for the country,
he said.
Bangladesh is always known to be a rigid country in terms of investment to the overseas market.
The world is global so does the business, so globalisation and increased competition, forces companies to invest overseas.
Dr Mashiur Rahman said, Government wants to loosen-up the overseas investment policy, but Bangladesh Bank (BB) has been restrained regarding this issue for so long. The reason perhaps, BB does not have enough expertise to evaluate a project in a foreign country.
The adviser also said that if rules are made according to the countrys economic behaviour, the policy reform will work else it will not.
President of IBFB Hafizur Rahman Khan said at the event that Bangladesh has achieved 7.11 per cent GDP growth in year 2015-16 and to make Bangladesh a middle income country, valid and transparent overseas investment policy is required at this moment.
Hafizur Rahman also said: Every year, 800 million dollars siphoned off from Bangladesh. It has been happening for past four decades. This is the high time to make proper rules and regulations to invest money outside the country through proper and transparent channel.
Keynote speaker Dr Muhammad Ismail Hossain emphasised the overall foreign direct investment (FDI) of South Asia and the contribution of private sector towards economy.
Ismail Hossain said the scenario of FDI outflow, Bangladesh is not performing well compare to other South Asian countries. Capital flight has occurred over the last four decades and government loses a huge amount of tax every year.
At the end of the key note presentation, Dr Hossain discussed about; informal money transfer systems, capital flight, optimal forex reserve, issues to consider regarding the policy reform of overseas investment.
Speaking on the occasion, IBFB Director Dr Mozibur Rahman said Malaysia and South-Korea improved economically as they started to grab foreign opportunities and investment as well.
Trade GDP ratio of Malaysia is 100 plus, so we can improve this ratio by investing outside the country. We have a current account problem which is surplus at this moment.
Mozibur Rahman also mentioned the reasonbehind it.
He said if revenue increases, local currency supply increases therefore it hits the inflation and local currency appreciates and eventually, it is harmful for the exporters and goods as well.
Several experts and economists have shared their views at the seminar. Executive Director of Policy Research Institute (PRI), Ahsan H Mansur said the country is witnessing current account problem and decline in inward remittance.
He said: Recently remittance declined because more money flowing out of the country illegally, so we need to change the policy immediate to impede it.
Currently, 9 companies from Bangladesh have received the approval from Bangladesh bank to invest outside the country for exploring the opportunities.
Bangladesh aspires to become a middle-income country by 2021; thereby it might entail furtherscope and capability to invest overseas.
