Bangladesh is expecting a huge foreign investment this year as many countries across the globe are increasingly showing interest, said experts. They said the foreign investors feel comfort and secure to invest in Bangladesh as business friendly environment and stable situation are now prevailing in the country. Besides, experts argued, implementation of various development projects and construction of several economic zones are playing a vital role in luring foreign investors.
Talking to Bangladesh Post, businessmen, economists and experts said that government initiatives reforming regulatory rules and improving ease of doing business have successfully attracted the attention of overseas investors. In 2019, the country’s foreign direct investment hit an all time high, increasing by 51 percent compared to the same period of previous year. According to available data from the central bank, in 2018-19 fiscal, Bangladesh's net Foreign Direct Investment (FDI) stood at $3.88 billion whereas the net FDI was $2.58 billion in the previous year. FDI increased by $1.1 billion in Sep 2019, compared with an increase of $1.6 billion in the previous quarter.
Experts have envisaged that the FDI would increase more once the special economic zones start running in full swing. Bangladesh Bank calculates the FDI in three categories: equity, reinvestment of earnings, and intra-company loan. The FDI posted a significant jump in equity capital, or new investment, climbing 94 percent year-on-year to $1.19 billion.
Intra-company loans rose by 87 percent to $1.33 billion and reinvestment of earnings by existing foreign companies grew 8.77 percent to $1.36 billion.
Executive Chairman of Bangladesh Economic Zones Authority, Paban Chowdhury told Bangladesh Post, “Many investors from China, Japan and European countries have expressed their eagerness to invest in our economic zones which proves that Bangladesh has become a lucrative place for foreign investors. We have been preparing our new economic zones and investors are waiting to invest. The foreign investment will increase in a great extent once we prepared these zones.”
He also said, “Prime Minister went to China in June 2014 and she promised to give one of our economic zones to China. We have already allotted Anwara economic zone in Chattogram to China. Now, China is seeking another economic zone in the country. I have received a letter from Chinese ambassador in this regard. We have decided to fix another economic zone in Narayanganj for them.” Besides, More Chinese companies have got the approval from the Commerce ministry recently. The Chinese Chamber of Commerce in Bangladesh recently changed its name to Chinese Enterprises Association in Bangladesh (CEAB) with adding more Chinese companies which will boost more Chinese investment in Bangladesh.
CEAB President Lin Waiqiang said, “We have shifted to the association format to attract more firms. Chinese companies will continue to invest in Bangladesh as this country is getting popularity as a good investment zone. Last year, we had only 100 members and now the number reached 240. We are hoping to add another 100 firms by the next year. ” About the raise of FDI in Bangladesh, former executive chairman of Investment Development Authority (BIDA) Kazi M Aminul Islam said, “The World Bank has named Bangladesh among the top-20 improvers in doing business in 2020. This is because of as the government’s various initiatives, such as policy reforms, removing infrastructural deficiencies and creating a positive business environment to encourage more investment by creating a business-friendly environment,”
He also said that Bangladesh Investment Development Authority has been playing a significant role by providing services within the shortest possible time through its one stop service (OSS) which attracts foreign investors to invest here. However, Dhaka University Professor of Economics department Abu Ahmed told Bangladesh Post, “Although Bangladesh raised eight steps of ease of doing business this year, it cannot show overall increase. Some Chinese companies have come to Bangladesh and some companies also have gone to other countries especially Vietnam. We are lagging behind in FDI compared to Vietnam.” Apart from creating business-friendly environment for FDI, the government should ensure that no foreign company will go from the country, he suggested.