Address impediments to investment

Govt must improve business climate

The quarterly economic review unveiled by the Metropolitan Chamber of Commerce and Industry on February 10 has called on the government to do more to bring back investors' confidence in the economy. Presently the investment rate falls far below the required 35 percent of the GDP to achieve the government's target of achieving 7 percent annual growth. For that to happen, the overall business climate must improve. We agree with the findings that political stability, improved infrastructure and ease of access to bank credit are all fundamental prerequisites to investment. 

Besides these, issues that scare away many investors are the manner in which public policy fluctuates, the regulatory framework governing foreign investments and general lack of industrial estates and rules that apply to such estates. Unless a way out of the lack in quality and consistent power supply is found, investments in new manufacturing units will not be so easily forthcoming. While it has been found that the services sector is performing well, further government support is needed to make the sector flourish. The stock markets, however, have not rebounded primarily due to a failure to allay investors' fears despite efforts by regulators.

All in all, there has to be a general rethinking to address these impediments at the policy level if we are to see a surge in private sector investments. It is all about changing perceptions of investors that Bangladesh is a safe place to invest in through policy reforms and getting crucial infrastructure projects off the ground in a timely fashion.