Analysts spotlight business scope to German delegation

The foreign direct investment (FDI) regime in Bangladesh is liberal as almost all sectors are open to foreign investors and profit repatriation, analysts said at a seminar in Dhaka yesterday.

Infrastructure, power, agro-processed foods and telecommunication are some potential sectors for German investment in Bangladesh, they said at the seminar joined by a visiting German business delegation.

Bangladesh German Chamber of Commerce and Industry organised the seminar styled "Investment Climate and Economic Prospects for Bangladesh" in association with OAV-German Asia Pacific Business Association.

OAV is a network of more than 500 German companies from all industries including production, trade and finance services.

President of the chamber Saiful Islam said the newly elected government's agenda includes huge investment in power and infrastructure and Germany is welcome to come up with development projects for infrastructure and energy.

He also expressed concern that Bangladesh has been portrayed with a negative image in the western media.

Former caretaker government finance adviser AB Mirza Azizul Islam said manufacturing, readymade garments, agro-processed foods, energy, water resources, inland river container, and telecommunications are the areas where German businessmen can invest.

As the government allows full profit repatriation and FDI in all the areas except some sectors such as arms and information, foreign investors can enjoy huge freedom in the country, he added.

Despite rapid growth in mobile telecommunication in the last few years, tele-density rate in the country is still one of the lowest in the world, he said, describing the justification to invest in the sector.

Aziz said the size of the capital market has doubled in the last 3-4 years, while the largest-ever initial public offering was 3.5 times oversubscribed, showing a vibrant capital market.

In a keynote speech, Mamun Rashid, managing director of Citibank NA in Bangladesh, said the infrastructure problem is not unique for the country. "During my work in different countries of Southeast Asia and Africa, I have seen that infrastructure is a common problem for all the emerging countries."

About the economic progress of the country in the last few years, he said now the size of the capital market is two times higher than that of Philippines, while foreign currency reserve has reached $9 billion recently from $1 billion in 2001.

BD Rahmatullah, former director general of Power Cell and Power Division of the Ministry of Power, Energy and Mineral Resources, said the average per day power shortage in the country is now 2,000 megawatt.

It is not possible for any country to develop to its full potential with such a shortage of power, he added.

He also said the 'Vision 2021' of the government will remain unimplemented with a dilapidated power sector.

Not the mineral resources but absence of proper policy is the main problem for power sector development as it is possible to generate 10,000MW of power for 50 years by using the coal in the northern region of the country only, he said.

German Ambassador to Bangladesh Holger Michael said he would carry a strong message with him from the discussion at the seminar -- the country has a huge potential.

Editor and Publisher of The Daily Star Mahfuz Anam said Bangladesh has a huge opportunity for development, while the best way of defining the country is that it is a rose with many thorns and so one has to take risks to enjoy the beauty of the flower.

Anam said it seems that the country is on the right track as the government has taken some bold steps to develop the power sector -- though still at planning level. He however said: "We are good planners, not implementers."

Christoph Isenmann, director of KfW office in Dhaka, identified traffic congestion, transport and energy situation as some of the bottlenecks for the country's development.

KfW is the German state-owned development bank. Isenmann also urged the authorities to at least spare the power sector bidding from politicisation for the development of the sector.

Peter Clasen, head of the OAV delegation, said although there is business potential in the country, it will require more efforts in this regard.

He also said the people of the country are business-loving.

Zaidi Sattar, former senior economist of World Bank South Asia region, and chairman of Policy Research Institute of Bangladesh, said there has been around 6 percent GDP (gross domestic product) growth in the last few years.

But the country could achieve 8-10 percent growth, he added.

He also suggested making the country part of the global supply chain instead of relying on 8-10 products for export.

He said Bangladesh still has a huge potential in RMG sector, as the existing $12 billion annual RMG export of the county is insignificant in the $400 billion global apparel market.

In a keynote speech, Mahboob Ahmed, managing director of Shipwrights Bangladesh Ltd, a concern of Rupayan Port and Logistics Services Ltd, stressed transporting containers through waterways to reduce transport cost.

Citing a World Bank report, he said one gallon of fuel moves one tonne of cargo 59 miles by road, 202 miles by train and 514 miles by waterways.