Bangladesh: an attractive spot for Swiss investment

Eric Martin

The country has immense potential to attract foreign investment provided the bottlenecks in governance, energy and infrastructure are addressed, said a senior official of the Swiss government.
“Business and investment opportunities in Bangladesh are very promising,” Eric Martin, head of bilateral economic relations of the State Secretariat for Economic Affairs of Switzerland, said in a recent interview.
“Bangladesh offers manpower at a very competitive price. Its geographic location is also advantageous in attracting foreign investment,” he said.
However, the bottlenecks in governance, energy and infrastructure pose challenges.
“The country has the potential to become an interesting destination for Swiss businesses and investors, if the bottlenecks can be addressed and eliminated.”
Martin, who was in Bangladesh leading a business delegation, said a number of Swiss companies, particularly small- and medium-sized ones, are interested in investing in the information technology (IT) sector.
“We also get the feeling that they are really interested in outsourcing part of their production to Bangladesh.”
The economic relations between the two countries have been growing rapidly over the last years. In 2012, bilateral trade stood at $406 million, marking a growth of around 21 percent over 2011.
The main Bangladeshi exports to Switzerland are readymade garments and leather products, while industrial machinery, chemical and pharmaceutical products come from the opposite direction.
“Almost all the big Swiss companies, namely Nestlé, Holcim, Novartis, Syngenta, SGS, ABB, are present in Bangladesh and have investments in sectors such as pharmaceuticals, chemicals, food, machinery, construction and services.”
Altogether there are around 80 Swiss firms present or represented by local agents, he said, adding that the total investment of Swiss companies in the country comes to upwards of $135 million.
“This figure excludes the amount that Swiss companies re-invest after starting operation in the country.”
With the growing middle-class, the country is increasingly becoming a destination of high-end products from Switzerland, noted Martin.
“We are expecting that a number of Swiss watchmakers will soon come to Bangladesh.”
The Swiss official, however, said that political stability is essential in promoting trade and foreign direct investment.
“Unfortunately, the recent political violence in the country has cast a negative image. It can deter potential partners.”
He, however, is hopeful that once the election is over and political stability returns, the investment flow from Swiss companies will gather pace.
“It is true that the Swiss investments in Bangladesh are not very notable at the moment. I am positive that the status quo will change once business and investment climate improve.”