Bangladesh needs a comprehensive plan to create a competitive domestic market to attract more foreign direct investment (FDI) as the country is missing a huge opportunity, experts said.
The government should take a holistic approach to development, including quality governance and competitive tax measures, as well as create a business-friendly environment for both local and foreign entrepreneurs, they added.
To attract more FDI during the post-pandemic period, the government must make the country more competitive in policy regimes, bring automation in regulatory measures and remove administrative barriers to improve in the ease of doing business index, they said.
Analysts said in the technological era, the government can set up a wide-ranging One Stop Service (OSS) centre, automate customs clearance process, and integrate port and logistic infrastructure to attract more FDIs.
Data from Bangladesh Bank shows, inflow of FDI reduced to $582.17 million in the first quarter of 2020 - a 44 percent less than the same period of the preceding year.
Bangladesh received $1035.50 million as FDI in the first quarter of 2019.
In the first quarter of 2020, the highest FDI came from the United Kingdom, followed by Norway, the United Arab Emirates, the United States of America, Singapore and Thailand.
These countries have invested in telecommunications, construction, electricity, textiles and clothing, trade, food, banking, gas, information technology, leather, chemicals, insurance, cement and fertilizers.
Md Sirazul Islam, executive chairman of Bangladesh Investment Development Authority (BIDA), told Bangladesh Post, “Due to coronavirus pandemic, the FDI has reduced significantly for several months.”
“We were trying to promote our lucrative investments opportunities before the pandemic hit,” he added.
Executive Chairman of Bangladesh Economic Zones Authority, Paban Chowdhury said, “Bangladesh is taking all the preparations to attract more FDI. We are removing the uncertainty of land, ports and other infrastructure. Investors from China, Japan and European countries expressed interest to pour money in our economic zones, indicating that Bangladesh becomes a lucrative for FDI, he added.
Paban Chowdhury said they have been preparing the new economic zones as investors are waiting. “Foreign investment will increase significantly once those zones will be ready,” he added. Nazneen Ahmed, senior research fellow at Bangladesh Institute of Development Studies, said, “At first, we must understand the foreign investors mindset, what they really want.”
They want a stable tax policy, infrastructure, logistics support, skilled manpower similar to those offered by Vietnam and other countries. “We need to focus on it,” she added.
Economist Zahid Hussain said, “The government should remove policy complexity and infrastructure crisis to attract foreign investment since the country is missing a huge opportunity.”
“We need to give clear concept to the foreign investors on how they will be benefited if they invest through diplomatic channel as many foreign investors have no clear idea on it,” pointed out Hussain, who is a former lead economist of World Bank.