Increasing investment is crucial

There is little doubt that for generating growth Bangladesh needs more domestic as well as foreign investment. This has been further reinforced by the International Chamber of Commerce, Bangladesh (ICCB). It rightly said that Bangladesh requires a substantial increase in annual investments to 34.4 per cent of GDP by FY20 from 29 per cent in FY15 to achieve a middle-income country status by 2021.
In fact, for many a reason, investment scenario in the country is not presenting an encouraging picture. In the commercial banks of the country, large volumes of liquidity sit idle. For some time now, due to political unrest or apprehension for it, foreign investors have shown little interest to come to Bangladesh as their investment destination. There are also other reasons for the present investment scenario. One of them is lack of necessary infrastructure. For smooth industrial production is necessary smooth power supply. But the ongoing countrywide load shedding is an ample proof of the fact that Bangladesh is still far from achieving ability of giving uninterrupted power supply to the country’s industries. This poor power condition will certainly not give confidence to foreign investors to come to Bangladesh.
Then there is the country’s notoriously slow moving and corrupt bureaucracy. The ICCB is right to point out that at a time when remittance is declining, and there is the rising nonperforming loan from the domestic side, the economy of Bangladesh is going to face formidable challenges ahead.
There are also external factors that may impact the country’s economy negatively. After the European Debt Crisis and depreciation of different currencies against the US dollar, recovery of the European Union economies may be difficult at present. But the fact of the matter is European countries are the primary destination of Bangladeshi exports including the RMG.  Even after all these, it is right that economy of Bangladesh looks stable with positive near-term macroeconomic outlook, declining inflation, rising reserve, contained fiscal deficit and stable public debt. But the country’s economy needs pace in growth, more than eight per cent annually, to take Bangladesh to the middle income country within a short period. If this cannot be done, the government’s Vision 2021 will remain unattainable. The budget for the next fiscal is coming, and it is expected that the finance minister would be able to give the nation an investment-friendly budget with a pragmatic plan to overcome the hindrances for investment.   

 

Increasing investment is crucial

There is little doubt that for generating growth Bangladesh needs more domestic as well as foreign investment. This has been further reinforced by the International Chamber of Commerce, Bangladesh (ICCB). It rightly said that Bangladesh requires a substantial increase in annual investments to 34.4 per cent of GDP by FY20 from 29 per cent in FY15 to achieve a middle-income country status by 2021. In fact, for many a reason, investment scenario in the country is not presenting an encouraging picture. In the commercial banks of the country, large volumes of liquidity sit idle. For some time now, due to political unrest or apprehension for it, foreign investors have shown little interest to come to Bangladesh as their investment destination. There are also other reasons for the present investment scenario. One of them is lack of necessary infrastructure. For smooth industrial production is necessary smooth power supply. But the ongoing countrywide load shedding is an ample proof of the fact that Bangladesh is still far from achieving ability of giving uninterrupted power supply to the countrys industries. This poor power condition will certainly not give confidence to foreign investors to come to Bangladesh. Then there is the countrys notoriously slow moving and corrupt bureaucracy. The ICCB is right to point out that at a time when remittance is declining, and there is the rising nonperforming loan from the domestic side, the economy of Bangladesh is going to face formidable challenges ahead. There are also external factors that may impact the countrys economy negatively. After the European Debt Crisis and depreciation of different currencies against the US dollar, recovery of the European Union economies may be difficult at present. But the fact of the matter is European countries are the primary destination of Bangladeshi exports including the RMG. Even after all these, it is right that economy of Bangladesh looks stable with positive near-term macroeconomic outlook, declining inflation, rising reserve, contained fiscal deficit and stable public debt. But the countrys economy needs pace in growth, more than eight per cent annually, to take Bangladesh to the middle income country within a short period. If this cannot be done, the governments Vision 2021 will remain unattainable. The budget for the next fiscal is coming, and it is expected that the finance minister would be able to give the nation an investment-friendly budget with a pragmatic plan to overcome the hindrances for investment.