It is good to know that despite various setbacks, Bangladesh continues to receive higher amount of foreign investment. According to the UNCTAD World Investment Report (WIR)-2017, in the year 2016, Bangladesh got the highest ever investment in its history. Compared to the previous 2015, this is 4.39 per cent higher. At a time when the FDI flow fell globally by about 2 per cent and investment in developing countries declined by 14 per cent, the increase in FDI for Bangladesh is indeed a positive piece of news.
Yet Bangladesh could well be a better place for foreign investment in South Asia, if it could overcome certain negative conditions. First of all is the country’s unstable politics. Though the country is witnessing a rather peaceful political atmosphere for some time now, it can very well be assumed that this period of tranquility is short-lived. As the time for next general election will approach, there is the possibility that the country can be again be gripped by political instability since the two major political parties are yet to come to terms about the nature of the election-time government.
Until the disagreement on this between parties remains, we can hardly expect that congenial political atmosphere for foreign investment will permanently settle in Bangladesh. That is why it would not be an overstatement to say that political conflicts, often irrational ones at that, is largely responsible for lower foreign investment in Bangladesh.
Then there is the lack of infrastructure. In Bangladesh power supply is still inadequate, and the communications system has not developed up to the optimum level that can support robust growth of industries. Added to these is the country’s slow moving bureaucracy.
Improvement on all these counts is not only necessary for foreign direct investment, it is equally important for attracting local people to take up business ventures. Many people have idle money in banks but are not willing to take risk to lose their money in business in current conditions.
Despite the bottlenecks, FDI in Bangladesh is showing a rising trend. This is because labour is still cheap here and other economic fundamentals are in a very good position. In order to sustain the present rising trend of investment, the nation at least has to preserve the current conditions. But over the years, the economy of Bangladesh has grown strong and is capable of fostering much higher growth. It is expected that the politicians and the economic policy makers of the country should realise the country’s economic potentials taking up right actions.