The government should not be too much suspicious about the source of money if it wants more foreign direct investment, said a leading entrepreneur and a top official of a regulatory body yesterday.
Syed Nasim Manzur, managing director of Apex Footwear, said countries such as Mauritius, the British Virgin Islands and Ireland have attracted hefty amount of FDI as they have not questioned the source of fund.
He urged the government to be less suspicious about the 'colour of money', especially of the foreign investors.
Queries about the source of fund may discourage foreign investors and they may explore opportunities in other countries, said the entrepreneur at a dialogue at the Sonargaon hotel in Dhaka.
Kazi M Aminul Islam, executive chairman of Bangladesh Investment Development Authority (BIDA), said the colour of money doesn't matter. “We would like to be a global player.”
Think-tank Policy Research Institute of Bangladesh (PRI) organised the dialogue on 'improving business climate: key policy reforms and institutional priorities'.
Speaking at the event, a number of experts identified chronic infrastructure deficit and a scarcity of land as the major obstacles to investment, which is a prerequisite for higher economic growth.
They called for more investment in infrastructure and their maintenance, continuation of policy support and one-stop services to attract both local and foreign direct investment.
Scarcity of land, inadequate skilled workforce and infrastructural deficiency have remained the major impediments to investment in Bangladesh over the years, said economist Wahiduddin Mahmud.
He said mega infrastructure projects will have to be undertaken along with small and medium-sized ones, to achieve a middle income country status.
“When we say that the investment-to-GDP ratio increases, that is gross investment. But we forget that from gross investment every year, there is a depreciation of capital asset. This has become more important as the public sector investment is increasing,” he said.
The former caretaker government adviser said there are some good-looking flyovers but if the roads below it are neglected, then the flyover may not contribute to your GDP. He requested the finance minister to allocate more funds for the maintenance of the projects under the development programme.
Prof Mahmud said many industrial plots were given to entrepreneurs over the years, but those have not been utilised properly. “So, land should be utilised properly and that is becoming pricier day-by-day.”
Finance Minister AMA Muhith said there was an effort in the last 15-20 years to introduce a 'one-stop service' to attract FDI. “But we have never seen the service.”
On export diversification, he said apparel will continue to grow as the major export item. “But we need to increase the number of other export items in the basket.”
Abrar A Anwar, chief executive officer of Standard Chartered Bangladesh, said the government should issue sovereign bonds to set a benchmark for the foreign investors, as many are not aware of the stories of Bangladesh.
“It may be that you don't need the money, but the sovereign bond will set a benchmark,” he said, adding that policy continuity and tax incentives are important for attracting long-term investment.
Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry in Dhaka, said the BIDA can't be allowed to become another Board of Investment.
“Private sector involvement in the BIDA is a must, and the BIDA should have the authority to hire people from the private sector.”
She said Myanmar and Pakistan are getting more FDI than Bangladesh because people don't know about Bangladesh. “The perception issue about Bangladesh needs to be dealt with.”
Asif Ibrahim, vice-chairman of Newage Group, said apart from developing new infrastructures, the country needs to modernise all existing infrastructures to achieve higher economic growth.
He said the investment on infrastructure, which stands at only 2-3 percent of gross domestic product, is insufficient.
Presenting a keynote, PRI Executive Director Ahsan H Mansur said gross investment now stands at 29.4 percent of GDP.
But the private sector investment, which accounts for 77 percent of the total investment, has virtually remained unchanged in relation to GDP, he said.
The investment level would have to go up to 34 percent to achieve the 8 percent economic growth target planned under the 7th five-year plan, he added.
Manzur of Apex Footwear suggested engaging multinational companies such as Unilever, British American Tobacco, Marico and Marks & Spencer that are operating in Bangladesh to build the country's brand image abroad.
He advised the government to improve the services at Hazrat Shah Jalal International Airport. “If I am a foreign investor, I would not come back for a second time to the airport.”