Local investment plans spike
Domestic investment proposals, both in terms of numbers and volume, are set to surpass all records this year although foreign investment has witnessed a broad decline, Board of Investment (BoI) officials said.
This year's trend shows that local businesses have regained their confidence that they had lost in the middle of 2006 when political chaos gripped the country with the scheduled national polls at the heart of it. Private domestic investment suffered the most from fears of a change in the political regime.
According to statistics of BoI, 1,055 domestic investment proposals worth Tk 13,706 crore, equivalent to $1.63 billion, have been registered with the BoI in the first nine months of 2008.
In 2007, some 286 proposals, worth $441 million, were registered with the BoI. The number of proposals and the total volume of investment were 519 and $1.12 billion, respectively, in 2006.
“Proposals registered with the BoI are set to break all previous records in terms of value and numbers of projects,” a senior BoI official told The Daily Star yesterday. “This is a sign of an improvement in the country's overall investment climate,” he said. “We are confident that 2008 will be a booming year for domestic investment,” the BoI official said.
During the launch of the global investment report last week, BoI Executive Chairman Kamaluddin Ahmed said: “The trend shows a sharp rise in domestic investments this year.”
BoI recorded $1.68 billion worth of domestic investment proposals in 2003. The number of projects registered in 2003 was 1,703, a record high expected to be surpassed this year.
Textiles, services, chemical, ceramics, light engineering, food and allied, pharmaceuticals and leather and tannery are the major sectors in which this year's domestic investments have gone into, according to BoI statistics.
The interim government, led by Fakhruddin Ahmed, formed Bangladesh Better Business Forum and the Regulatory Reforms Commission last year to help the businesses back on track. The government held a series of meetings with different stakeholders in business, placing dozens of recommendations in the process.
However, Zaid Bakht, an economist, said the increase in registration of domestic investment does not mean that real investment has increased.
“There is a huge gap between real investment and registration of proposals,” Bakht, also the research director of Bangladesh Institute of Development Studies (BIDS), told The Daily Star. He however said businesses are getting their confidence back.
“Businessmen have started on their investment plans this year. They had stopped making any progress in their investment plans last year because of a changing political situation and massive anti-corruption drive,” Bakht said. He also said present political uncertainty is not affecting the investors.
Bangladesh is a poor performer in terms of investment as percentage of GDP, which is only around 25, with about 80 percent of which coming from the private sector.
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