BoI main roadblock to foreign investment

The Board of Investment's unhelpful attitude is the main roadblock to increasing foreign direct investment in Bangladesh and not the political climate, experts said yesterday.

The BoI was set up to provide one-stop service to prospective foreign investors so that they do not need to go from office to office to get the necessary permits to start operations in Bangladesh, said Mahbubur Rahman, president of the International Chamber of Commerce, Bangladesh.

“But that never happened. The BoI did not move even one inch forward from the then Department of Industries. Now, the number one obstacle to attracting FDI in Bangladesh is the BoI.”

Rahman's comments came at a roundtable organised yesterday by the Foreign Investors Chamber of Commerce and Industry and Citycell at the Brac Centre Inn.

The FDI flow into the country declined for the first time in five years in 2014. It stood at $1.53 billion, down 4.57 percent year-on-year, according to the World Investment Report, which was also presented in the discussion.

Rupali Chowdhury, president of FICCI, said the government will have to find out the reasons why new foreign investors are not bringing in the expected levels of money to the country.

The existing foreign investors are counting profits and are subsequently making more investment in Bangladesh, she said.

The FICCI members have been making many recommendations to the government to attract more FDI but they seem to fall on deaf ears.

They called for efficient bureaucracy, simplification in the procedures for FDI registrations, improvement in legal infrastructure as well as acceleration in the one-stop service provided by the BoI.

The foreign investors are also concerned about inconsistencies in the government policies, Chowdhury said.

The government's agreement with the foreign investors should be watertight and not alter with the change in government.

The rules and regulations are fine on paper but in practice, implementation is slow, said Selim A Chowdhury, managing director of G4S Secure Solutions Bangladesh.

Subsequently, he called for appropriate actions to rectify the situation.

He cited the case of international hotel chain hotel Le Meridien as a case in point. Le Meridien is yet to get the bar licence as it needs approval from 28 signatories.

A strong partnership between the government and the private sector is needed to solve the problems faced by the foreign investors, said Farooq Sobhan, president of Bangladesh Enterprise Institute.

The continuation of policy is needed to boost the confidence of foreign investors, he said.

The central bank is reviewing the Foreign Exchange Regulations Act to further liberalise the currency regime for attracting more FDI, said SK Sur Chowdhury, deputy governor of Bangladesh Bank.

The country cannot attract FDI at the expected level due to a lack of investor confidence, congenial environment, unavailability of land, institutional weakness, corruption and some other 'unknown reasons', he said.

Supun Weerasinghe, president of Association of Mobile Telecom Operators of Bangladesh (AMTOB), said the costs of doing business and problems of collaboration are the other challenges.

Weerasinghe, also the chief executive officer of Robi, said the mobile phone operators have invested $1.3 billion over the last five years as FDI but their investment is not completely protected.

“We need to create our own fibre connectivity for the sake of our own business, but the operators are prohibited from doing so,” he added.

 MA Taslim, a professor of economics at Dhaka University, said the government would have to work to reduce the gap between the prospect and actual investment.

Mahmudul Karim, country head of Santos Sangu Field, said neighbouring Myanmar managed to attract at least 18 foreign investors to its oil sector but only four came to Bangladesh. “The government needs to find out why.”

Citycell Chief Executive Officer Mehboob Chowdhury, Citibank Managing Director Rashed Maqsood, and British American Tobacco Bangladesh's Managing Director Shehzad Munim were also present.