Foreign investment in housing sector

Khan's report (Aug;10) on the Rakeen Development Co. from the Middle East getting permission to participate in the house building sector in Bangladesh is a mixed blessing for us. The positive aspect is that it will bring scarce foreign currency into Bangladesh. The important negative aspect is that the investor will naturally repatriate its incomes from Bangladesh from sale of land, buildings and flats. Assuming even a modest return on investment, of say twelve percent, the company will remit back US$1.12 million for every US$1 million brought into Bangladesh, if I am not mistaken! Will it not result in more outflow of foreign currency from Bangladesh?
The statement from Rakeen " that he flats will be of world class and affordable" is more in the line of sales advertisement than anything else! Does it mean that the overseas developer will import tiles, windowpanes, and other residential fittings and fixtures from abroad? If they pay on these imported items the normal import tariff, then how can their flats be affordable in price? If, on the other hand, they are allowed preferential tariff, on the excuse of foreign investment, then it will be unfair to REHAB who enjoy no such concessions!
It will be a damper to our growing ceramic, sanitary, electrical and "household fittings" industries developing rapidly.
If foreign investment is desired, it should be in other service sectors like urban mass transport system or inland water transport infrastructure facilities like improved inland water terminals etc. Even here we must be strict in regulating the quality of facilities and services.
FDI should go directly or in joint venture format for industries. For the housing sector it will be better to provide support to REHAB; basically in terms of easier financial facilities for housing and property development wherever possible. Bringing in foreign investment in this sector will discourage an already established growth sector under private ownership now progressing steadily.