Improve business climate to attract more FDI
Foreign investors will not be interested in investing in Bangladesh if the business culture, which influences management, decisions and all economic activities, does not improve, speakers said yesterday at a seminar.
“Otherwise, the foreign investors will go to other countries and they have many alternative options,” said Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority.
Chowdhury's comments came at the inaugural session of an investment promotion seminar titled “Attracting Investment in Economic Zones in Bangladesh”, organised by BEZA at the Radisson Blu Water Garden in Dhaka.
The seminar was targeted to promote the upcoming economic zone projects of the BEZA to potential zone developers and unit investors.
Bangladesh has been receiving very poor and insignificant foreign direct investment in spite of many attempts, he said.
In 2016, the country received about $2 billion in FDI, which although the highest ever for Bangladesh is only one-fifth the amount that flew into Myanmar during the year, according to Chowdhury.
The country has an excellent legal framework for promoting investment but implementation is very poor, he said. BEZA will form a Tk 2 billion fund to provide seed money to private sector players to develop economic zones.
Speakers at the seminar held the lack of international-standard audit reports, poor enforcement of investment-related rules and regulations, and inadequate infrastructure responsible for poor FDI flow. They said setting up of special economic zones is the only way through which Bangladesh could reach the middle-income status by 2021.
They also demanded government funds to develop the private economic zones. Private sector investment in the country still remains stagnant even amid the political stability and lower lending rates, said Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry.
BEZA has been ensuring congenial environment for investors through developing policy and guidelines, he said, adding that it is also working to provide online one-stop Services to investors, which would ensure a hassle-free investment climate for the private sector.
Lack of skilled manpower is an obstacle for increasing foreign investment, said Mustafizur Rahman, executive director of the Centre for Policy Dialogue.
The political situation is now favourable but infrastructure bottlenecks and power and electricity shortage will have to be overcome to attract foreign investors, he added.
BEZA has been working to develop a sound automated system of One-Stop-Services (OSS), said Kamal Abdul Naser Chowdhury, principal secretary of the prime minister's office.
The draft OSS act, which has been approved by the BEZA governing board, is now awaiting cabinet approval. All public and private economic zones will have the OSS desk that will be connected with the main centre located in BEZA headquarters, he said.
The revenue authority is providing all sorts of support to the BEZA in formulating an investment-friendly tax pattern for investors, said Nojibur Rahman, chairman of the National Board of Revenue.
It has already issued the Bangladesh Economic Zones Warehousing Station Rules, 2015 to declare all economic zones to be bonded warehousing stations.
This means investors in the economic zones will be able to import raw materials without paying import duty and value-added tax, he said.