Bangladesh for its continuing development and investment-friendly atmosphere is now being considered as a lucrative destination for foreign investors.
Multinational companies look to join the country’s strong domestic demand as well as the very favourable environment for foreign direct investment (FDI) played vital role on this issue, according to a report of Nikki Asian review.
Bangladesh is seen by foreign investors as a strong growth market because of a population of 168 million, more than a third of whom are 25 years old or younger, and a strategic location in South Asia, the report mentioned. The report says, "Bangladesh's economy is expected to have expanded 8.13 percent for the year ending June 30, the fastest in Asia.”
Private consumption comprises about 75 percent of Bangladesh's more than $300 billion economy, it added. Foreign direct investment in the country increased by 68 percent to reach a record high at stand to $3.61 billion last year over the previous year. This figure was more than triple when compared to the amount received in 2011, according to the United Nations Conference on Trade and Development (UNCTAD).
International Monetary Fund's representative in Bangladesh Ragnar Gudmundsson said, "This underscores the importance of ongoing reforms to enhance the business environment, as well as ongoing investments to develop the country's infrastructure. He expected, “A 25 percent rise in FDI for the fiscal year ending June 2019 compared with the previous year.”
Executive chairman of the Bangladesh Investment Development Authority (BIDA) Kazi M Aminul Islam said, "Bangladesh is a land of opportunities. You can create value." “A wing of the Prime Minister's Office is responsible for promoting foreign investments.” Mentionable, the government has kept making earnest efforts to develop the country’s communication infrastructures that include building metro-rails, bridges, tunnels, elevated expressways, power plants and other projects with billions of dollars of investment coming mostly from Japan and China.
The development of special economic zones across the country, along with a string of sweeteners, is a key strategy for attracting investment. That has already drawn such Japanese companies as Sumitomo, Sojitz, Nippon Steel, Shinwa and Maruhisa. Sojitz alone will sink $2 billion into a private port and industrial park at the Mirsarai zone in the port city of Chittagong, according to officials of the Bangladesh Economic Zones Authority.
So far, the zones operator has sanctioned land against some $17.9 billion foreign investment proposals. According to Export Promotion Bureau, export earnings rose by 11 percent to a record $40.53 billion for the last fiscal 2018-19, led by textiles and apparel which contributed more than 80 percent of the total export earnings. The country’s remittance inflow stood at a record high of almost $16.42billion in fiscal (FY) 2018-19, according to Bangladesh Bank (BB).
Buoyed by investments, exports and remittances, Bangladesh's foreign-exchange reserves rose to $31.70 billion in June, enough to foot the import bill for more than five months.
Increasing labour demand in Gulf countries and a crackdown on illegal money transfers fueled the remittances, the Nikki’s report said. Workers' remittances are set to grow 15 percent in the year ending June 2020, helped by a budget of $362 million for offering a 2 percent incentive. Bank officials said this will not only boost the flow through banking channels, but it will discourage Bangladeshis living abroad to opt for illegal transfers.
Zahid Hussain, a former lead economist at the World Bank in Dhaka, says favourable demographics and a geographic location putting it closer to the major markets of India, China and Japan are two of Bangladesh's fundamental strengths. While Bangladesh scored poorly in institutions and infrastructure, its ranking in the World Economic Forum's global competitiveness index is one of the better ones when it comes to macroeconomic policy, Hussain said. "Despite exchange rate volatility, Bangladesh has managed to stabilise its macroeconomic management," he said.