Bangladesh investment climate
The American Chamber of Commerce (AmCham) has recently launched a report on the investment climate in Bangladesh titled 'Investment Climate Statement 2015'. Corruption has been identified as one of the major impediments that increase the risk and cost of doing business, and it is estimated to reduce growth of GDP by as much as two to three percent. As the anti-corruption watchdog has been downsized in terms of power, the effectiveness of the drive against corruption may be stunted. Bureaucratic delays, inadequacy of infrastructure and lax implementation of laws are some of the issues that have been highlighted as major impediments to foreign direct investment (FDI).
The culture of settling political scores on the streets through agitation, violence and blockades increase costs and productivity losses for foreign firms. Despite receiving US$1.5 billion as FDI in 2013-14, a 50 percent jump from the previous fiscal, it is a paltry amount when taking into account the total foreign investment that South Asia attracted during the same time period. The problems associated with energy supply and power have become chronic which could be alleviated due to the delays associated with implementing mega projects in the power sector.
Despite numerous problems, the country, boasting the eighth largest population in the world and having a young population, provides a lot of opportunities for investment, particularly in energy, power, pharmaceuticals, telecommunications and infrastructure. There is huge potential to be exploited, but bottlenecks need to be addressed in earnest before Bangladesh can expect serious growth of FDI.
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