Hindrance-free FDI
According to a recent report published in a Bangla newspaper red tapism and poor infrastructure are the main hindrances regarding foreign direct investment (FDI) in Bangladesh. Unfortunately FDI still constitutes a low share of the countrys GDP, much lower than countries, such as Myanmar, Laos, Cambodia and Vietnam. Bangladesh has the potential to attract significantly higher levels of FDI by positioning itself as a competitive centre for labour intensive garments and footwear manufacturing as well as its favourable location between the two large and dynamic economies of China and India.
Preferential access to key consumer markets in developed countries also makes it an attractive place for relocation of export oriented industries.
And of course, removal of complicated red tape and ensuring hassle-free investment atmosphere as well as streamlining of all processes under one umbrella is imperative. Despite having very liberal legal framework, analysts stressed the need for removal of security concerns, further liberalisation of trade-related policies and resolution of the problem of political uncertainty to attract FDI.
It is hardly a secret that there exists corruption, red tapism a lack of coordination among the different ministries.
No matter whether it is micro or macro corruption, it needs to be checked in the interest of a healthy investment regime.
People are more or less familiar with the adverse environment of investment but no serious effort has yet been made to overcome impediments to investment. And if we do have an image crisis at the international level, we have to work on it. Shortages of power, gas and industrial land have to be addressed to attract FDI. The political situation of the country is relatively calm at present. So it was naturally expected that investment would increase. Unfortunately that has not been the case.
Bangladeshs economy has maintained a sustained growth of 6.2 percent during the past years and last year the country achieved, according to government statistics, seven percent growth rate. The size of economy doubled in the last six years. So there are reasons to be hopeful.
We believe that there are lots of opportunities for investment, particularly in energy, power, pharmaceuticals, telecommunications and infrastructure. There is huge potential to be exploited, but the hindrances need to be addressed in earnest before Bangladesh can expect serious growth in foreign direct investment.
