Overseas investment likely to benefit economy, claim entrepreneurs

Bangladeshi local manufacturers have begun to invest abroad as an opportunity to expand businesses.

Centre for Policy Dialogue (CPD) research director Dr Golam Moazzem told The Independent that overseas investment must be made in those sectors where products having a large demand in the local market would be manufactured.

He cited the example of re-exports, saying it meant the export of something that had been imported. “Suppose, Bangladesh is good at producing raw materials of chemicals. Then, the country should invest in the construction of chemical plants in foreign countries,” he added.

Golam Moazzem explained some advantages of foreign investment: “Domestic workers will get the chance to take up overseas job and add value to profit repatriation and our foreign currency earning.”

Such an arrangement would not create any pressure on the country’s balance of payments, he said.

Describing the opportunities and benefits for local manufacturers, the CPD research director said that the DBL Group, the country's largest apparel manufacturer, has begun producing its low-end products in Ethiopia at a cheaper rate while producing the high-end products in Bangladesh.

This enables the DBL Group could reap two benefits: some workers would get the chance to work abroad and domestic workers would be able to develop their skills by manufacturing high-end products, he explained.

Golam Moazzem suggested changes in the Foreign Exchange Regulation Act, 1947, which was amended in 2015. He also stressed the need for companies to understand the difference between ‘expenditure’ and ‘investment’.

He wanted the authorities to monitor and prevent the trend to siphon off money in the name of investment.

Talking to The Independent, International Business Forum of Bangladesh (IBFB) president Hafizur Rahman Khan said the country's entrepreneurs have already acquired the economic strength and expertise to embark on investing abroad and should be given the scope to do so.

He also felt that returns from such investments would boost the local economy because the government would get additional taxes from the returns or profits. Investments abroad would also help entrepreneurs improve their efficiency and make production cost-effective, he noted.

The president of the Federation of Bangladesh Chambers of Commerce and Industry, Shafiul Islam Mohiuddin, said many countries are eager to offer land to Bangladeshi entrepreneurs to invest in ventures there. “We must take this opportunity. We can invest in many countries,” he added.

The Foreign Exchange Regulation Act, 1947, prohibited overseas investment by Bangladeshi entrepreneurs.

But an amendment to the law in 2015 allowed local entrepreneurs to apply to the Bangladesh Bank for permission to invest aboard. If the central bank grants permission after consultation with the government, a Bangladeshi entrepreneur would be free to invest in a foreign country.

Overseas investment likely to benefit economy, claim entrepreneurs

Bangladeshi local manufacturers have begun to invest abroad as an opportunity to expand businesses. Centre for Policy Dialogue (CPD) research director Dr Golam Moazzem told The Independent that overseas investment must be made in those sectors where products having a large demand in the local market would be manufactured. He cited the example of re-exports, saying it meant the export of something that had been imported. Suppose, Bangladesh is good at producing raw materials of chemicals. Then, the country should invest in the construction of chemical plants in foreign countries, he added. Golam Moazzem explained some advantages of foreign investment: Domestic workers will get the chance to take up overseas job and add value to profit repatriation and our foreign currency earning. Such an arrangement would not create any pressure on the countrys balance of payments, he said. Describing the opportunities and benefits for local manufacturers, the CPD research director said that the DBL Group, the countrys largest apparel manufacturer, has begun producing its low-end products in Ethiopia at a cheaper rate while producing the high-end products in Bangladesh. This enables the DBL Group could reap two benefits: some workers would get the chance to work abroad and domestic workers would be able to develop their skills by manufacturing high-end products, he explained. Golam Moazzem suggested changes in the Foreign Exchange Regulation Act, 1947, which was amended in 2015. He also stressed the need for companies to understand the difference between expenditure and investment. He wanted the authorities to monitor and prevent the trend to siphon off money in the name of investment. Talking to The Independent, International Business Forum of Bangladesh (IBFB) president Hafizur Rahman Khan said the countrys entrepreneurs have already acquired the economic strength and expertise to embark on investing abroad and should be given the scope to do so. He also felt that returns from such investments would boost the local economy because the government would get additional taxes from the returns or profits. Investments abroad would also help entrepreneurs improve their efficiency and make production cost-effective, he noted. The president of the Federation of Bangladesh Chambers of Commerce and Industry, Shafiul Islam Mohiuddin, said many countries are eager to offer land to Bangladeshi entrepreneurs to invest in ventures there. We must take this opportunity. We can invest in many countries, he added. The Foreign Exchange Regulation Act, 1947, prohibited overseas investment by Bangladeshi entrepreneurs. But an amendment to the law in 2015 allowed local entrepreneurs to apply to the Bangladesh Bank for permission to invest aboard. If the central bank grants permission after consultation with the government, a Bangladeshi entrepreneur would be free to invest in a foreign country.