Govt doubles down on efforts to attract foreign investment
With investment stagnating at a dismal level and foreign direct investment hovering around $2.5 billion annually, the government is going to hold a summit in a bid to attract foreign investors and break the current stalemate.
The Bangladesh International Investment Summit will take place in November, where the Bangladesh Investment Development Authority (BIDA) will highlight the steps the government has taken over the last five years to improve the investment climate and ease the process of doing business.
Analysts, however, say organising such an event will not suffice to pull foreign investors.
Proper implementation of laws related to investment and effective one-stop service facilities are needed to lure investments from abroad.
Development of regional connectivity, port and infrastructure facilities is needed to give a boost to the confidence of investors that they would be able to connect with the global value chain smoothly, analysts say.
At a press conference yesterday, Salman F Rahman, private industry and investment affairs adviser to the prime minister, said Bangladesh was yet to fully utilise the investment environment that had been created in recent years.
Bangladesh's investment-to-GDP ratio is the lowest in South Asia.
"Bangladesh needs FDI to increase the investment-to-GDP ratio to expedite the GDP growth," he said, adding that the summit would attempt to attract foreign investors and Bangladeshi expatriates.
In recent years, the ratio of the public investment-to-GDP has shown an increasing trend, but the private investment has been stagnating.
In the fiscal year of 2020-21, the private investment-to-GDP ratio declined to 21.25 per cent, from 22.06 per cent the previous year, amidst the onset of Covid-19 in March last year, according to the Bangladesh Bureau of Statistics (BBS).
The ratio was 23.5 per cent of the GDP in FY19 when the country received FDI worth $3.89 billion, the highest on record.
However, the pandemic adversely impacted the growth of investment as in FY20, Bangladesh could attract only $2.37 billion, down 39 per cent from a year ago.
It stood at $1.96 billion in the nine months to March of the last fiscal year.
The Bida said the investment scenario has been favourable in Bangladesh, and investors were optimistic until the pandemic.
It said the government took a lot of initiatives to improve the business environment, and they would be highlighted at the summit on November 28-29 at the Radisson Blu Dhaka Water Garden in Dhaka.
This will be the second summit after the first one took place in 2016. Prime Minister Sheikh Hasina is likely to inaugurate the event virtually.
Md Sirazul Islam, executive chairman of the Bida, said the agency was trying to attract more FDI in all sectors to ensure economic growth.
The Bida will spend Tk 1 crore for the programme, while the International Finance Corporation (IFC) will bear all of the expenditures of the summit.
Islam hopes the number of participating investors will be at least 1,000 from home and 10 target countries that will actively explore investment opportunities in Bangladesh.
Representatives of governments and investors from the US, the United Kingdom, Japan, South Korea, Singapore, Hong Kong, China, Saudi Arabia, the United Arab Emirates, India, Turkey, Thailand, Malaysia, and the Netherlands have been invited.
The Bida has also invited the World Bank, the Asian Development Bank, the Asian Infrastructure Development Bank, and the Japan International Cooperation Agency to participate in the summit.
Local policy-makers, investors, and economists will also take part.
Talking to The Daily Star, Rupali Chowdhury, managing director of Berger Paints Bangladesh, a multinational company, said the government was trying to woo FDI by improving the environment, which is an effective one.
With a view to attracting investment from external sources, the government is keen to sign free trade agreements with many countries, she said.
She suggested targeting FDI from Asia as Japanese and Chinese investors are interested in investing in Bangladesh.
Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, suggested implementing the laws and rules regarding to easing doing business to draw FDI, in line with arranging summits and roadshows.
"There is a requirement of immediate development of regional connectivity, port facilities, and proper implementation of one-stop service of the Bida to bring FDI."
He alleged that there was no proper implementation of the OSS Act in delivering gas and electricity connections to industries and providing the environment clearance certificate within the stipulated time that discouraged investors.
However, he is optimistic about the FDI in the economic zones.
"The summit will also result in increased awareness about the business environment, policies, regulations, and investment facilitation and services," Prof Rahman said.
Regarding the summit, Bida's Islam said it would provide an effective platform to promote private sector investment opportunities in an integrated manner.
The summit will showcase private sector investment opportunities, highlighting national competitiveness, policy priorities, and deeper economic cooperation.
According to the concept note of the summit, by hosting both in-person and virtual participants, the event will promote opportunities in high-growth thrust sectors, while facilitating networking and exchange of investment ideas.
It will bring together industry experts, policymakers, existing and potential investors, development partners, diplomats and media representatives.
Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, suggested focusing on the success story of foreign investors.
"We need proper branding of Bangladesh, focusing on investment opportunities, particularly for the foreign investors who have succeeded in Bangladesh," he said.
He also said the ministry of foreign affairs could play a significant role in branding the country through its missions abroad.
Md Tofazzel Hossain Miah, secretary to the Prime Minister's Office, Shaikh Yusuf Harun, executive chairman of the Bangladesh Economic Zones Authority, Md Nazrul Islam, executive chairman of the Bangladesh Export Processing Zones Authority, Sultana Afroz, chief executive officer of the Public Private Partnership Authority, Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries, and Nuzhat Anwar, acting country manager of the IFC, were present at the media briefing.