Policymakers should find the reasons behind the low inflow of foreign investment to Bangladesh despite a number of agencies' efforts to boost receipts, said a top official of an investment agency yesterday.
“We have a number of organisations and yet foreign investment inflows are no more than $2.5 billion,” said Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority, at a discussion at the headquarters of the National Board of Revenue.
Besides, there are a number of authorities and laws to promote investment. In contrast, Vietnam has simply a decree, which has paved the way for the country to receive huge amounts of foreign investment, he said.
In 2016, Vietnam received $12.60 billion in foreign direct investment, whereas Bangladesh got $2.33 billion, according to United Nations Conference on Trade and Development.
The NBR organised the event to hear views and recommendations from investment related agencies to frame the measures for the incoming fiscal year.
Myanmar receives $9 billion of foreign investment and countries like Hong Kong and Singapore get $75 billion, according to Chowdhury.
“Bangladesh sits on a strategically ideal location with two economic giants, China and India, and has a long coastal belt. A number of organisations are also working to attract investors. Yet, we could not make that much stride for various reasons.”
Asked for reasons, the BEZA chief said the investment climate and regulatory framework are easier in Vietnam than in Bangladesh.
The Southeast Asian nation has one organisation for special economic zones and other agencies support it in attracting investment.
“Investments do not get stuck anywhere there,” Chowdhury said.
He, however, said investment will rise to $5 billion next year because of increasing inflows.
BEZA has received $8 billion of confirmed investment proposals, he said, adding that the 'One Stop Service' law would be instrumental in facilitating investment.
“But without the help of the NBR, it is not possible to have a diversified manufacturing regime,” he said.
Bangladesh Investment Development Authority Executive Chairman Kazi M Aminul Islam said budgetary measures should focus on promoting investments.
“I do not see the NBR as a revenue collection agency. It is a very important institution and it has important role for the development of Bangladesh.” Vietnam fares better than Bangladesh in terms of business climate, infrastructure and skills, he said. “We want a tax system where processes are simple, transparent, fair and affordable.”
Citing the high corporate income tax rate, Islam said it is necessary to know whether the high rate helps the country to attract FDI. “Corporate tax rate should be attractive in comparison with our competing countries in terms of foreign investment,” he said.
In response, NBR Chairman Md Mosharraf Hossain Bhuiyan said the revenue authority will try to frame fiscal measures by providing sufficient incentives to attract investments. An investment promotion team will be formed with representations from BIDA, BEZA, NBR and other related agencies and suggestions from the panel would be incorporated in next year's fiscal measures.
Representatives from Bangladesh Hi-Tech Park Authority, Bangladesh Export Processing Zones Authority and Business Initiative Leading Development also shared their views at the event.