Improve supply chain to attract more FDI: analyst

An underdeveloped supply chain in the manufacturing sector is the main cause behind low foreign direct investment (FDI) levels in Bangladesh, an analyst said.
The business climate is unfavourable as access to utilities, like electricity, gas, transportation, waste management and office space, are still inadequate and below investors' expectations, Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue (CPD), said in keynote presentation based on a research.
The research was jointly conducted by the CPD and Chr. Michelsen Institute (CMI), a Norwegian independent development research institute.
CMI and CPD had agreed upon a three-year research cooperation programme in 2010.
He spoke at a discussion on the challenges to private sector development in Bangladesh, organised by the Nordic Chamber of Commerce and Industry in collaboration with the Royal Norwegian Embassy and the Embassy of Sweden at Gardenia Hall in Dhaka on Wednesday.
FDI in the energy sector may have a causal relationship with corruption, he said.
Bangladesh's private sector has been facing multi-dimensional challenges, and the emergence of new entrepreneurship has been constrained by poor skills caused by a lack of effective and quality education, Moazzem said.
The country's postgraduate education sector lacks proper standards, despite the presence of a number of educational institutions, he said.
Capital constraint is still the dominant factor for a lack of vertical development of enterprises, he said.
The government has been building institutional infrastructure to support public-private partnership (PPP) initiatives in the country, said Syed Afsor H Uddin, chief executive of Public Private Partnership Office at the Prime Minister's Office.
“We are working to attract private investment under PPP for some upcoming projects.”
Some big projects under PPP are also in pipeline, he added.
Paban Chowdhury, executive chairman of Bangladesh Economic Zones Authority, said his office is facing fund constraints for land acquisition, although measures have been taken to build special economic zones in various parts of the country.
“Young entrepreneurs are facing problems in doing business. They do not know where to go for licences and other formalities,” said Ferdaus Ara Begum, chief executive of Business Initiative Leading Development. “We should ensure an easy access to capital for entrepreneurs to boost economic growth.”