Bangladesh’s new government has distinctively taken an approach towards luring foreign investment and growing business. The approach clearly underlines that this policy of growing trade and investment is the priority issue of this government of Prime Minister Sheikh Hasina.
It has been less than three months that this new administration has taken office after Sheikh Hasina was re-elected to run the government. Hasina knew what she was doing right from even before entering election and wasted no time to spring into action after taking oath.
As many as 22 ministers of Bangladesh’s strong 47-member cabinet handpicked by Sheikh Hasina are businessmen. Among them, nine are ministers, 12 are state ministers and one deputy minister. Also, the fact that more than 17 of them are owners of apparel factories show the amount of priority Sheikh Hasina is putting on Bangladesh’s biggest export sector.
The first thing Sheikh Hasina did after re-election was to appoint a prominent industrialist, Salman F Rahman, vice chairman of Beximco Group, as her private industry and investment advisor. This move alone could show what the attention was in priority.
Even before the new batch of ministers and state ministers could settle into office, Bangladesh had completed talks with Saudi Arabia, United Kingdom, South Korea and Japan on the issues of investment and business – all within 15 days of taking oath. Sectors of investment include energy, power, infrastructure, apparel and an array of other products.
Before three months of the government has passed, Prime Minister Sheikh Hasina already completed two tours in Germany and United Arab Emirates – managing to grab several investors in the areas of power and LNG.
Also, alongside, Bangladesh’s foreign ministry is playing a proactive role in this regard. It has already sent out notices to all of its high commissions and embassies abroad instructing them to give highest priority to building and developing business relationship. Efforts have been asked to be directed towards luring investment in Bangladesh.
To be noted though, a special emphasis has been laid to increase the business relationship with European Union – the largest regional apparel export destination.
CAN BANGLADESH HANDLE IT?
In terms of capacity, Bangladesh is well prepared to accommodate the huge volume of investment it plans to draw its way. The government’s 100 Special Economic Zone (SEZ) project is progressing smoothly so far and has already managed to attract the attention of several customers including India, Japan and the United States.
Prospects are seemingly very bright, especially with a specialised unit working to facilitate the investment and investor relations – Bangladesh Investment Development Authority (BIDA).
Now, apparently, the most important aspect that is proving to be the most difficult knot to tie is increasing the ease of doing business in Bangladesh – a factor in which Bangladesh still lags far behind and a fundamental issue behind foreign investment and trade.
Statistics show, Bangladesh stood 177 among 200 countries in the ease of doing business index. This fact was also pointed out by members of the World Trade Organisation (WTO) during Bangladesh’s policy review last week. They said, Bangladesh needs to implement easier investment policies and reduce duty to lure investment.
Bright thing is, BIDA has said it will bring changes to all of it.
WILL BANGLADESH’S ECONOMY SUSTAIN?
The most positive thing about Bangladesh right now is its economy, according to a recent report of the World Bank, also released last week. It says, Bangladesh’s economy is slated to be among the top five growing economies in the coming times.
The global lender says that despite major lacking in luring investment and foreign investment, Bangladesh’s economy is speeding up at a remarkable rate. In its forecast, it says that Bangladesh will cross the 8 per cent growth threshold this fiscal, 2018-19.
Asian Development Bank also shares a similar view. It too, stressed on improving the business environment for vibrant private sector development, expanded tax base and promotion of efficient revenue collection for increased resource allocation, and developing the human capital for private sector needs.
In overall, the path ahead for Bangladesh is economically stable with steady growth projected. The economic conditions are expected to give a boost in the confidence of investors seeking economical stability in this geographically important part of the world.
IDEAL SETUP FOR INVESTMENT?
Not yet, but Bangladesh’s government is certainly working towards that purpose.
It will be a challenge but imperative for the government to ease the existing complexities in tax structure, process of starting a business, repatriating profits, changes in energy prices, limitations in the governance framework, risk of cyber-attacks, and skill shortages.
According to what the World Bank is saying, Bangladesh will manage to secure a lot of investment, but what it needs to do keep it sustainable is to implement predictable regulatory policy and uniformity in application of laws and policies.
Bangladesh government has big plans and luring foreign investment and businesses will be the key factor in reaching its target of becoming a middle-income country by 2021.