POST TIME: 25 June, 2019 00:00 00 AM
68pc FDI growth in Bangladesh: UNCTAD

68pc FDI growth in Bangladesh: UNCTAD

Bangladesh has registered a record growth in foreign direct investment (FDI) at a time when FDI flows to South Asia has increased by a modest 3.5 per cent in 2018, according to the latest UN report on trade and investment. The UNCTAD’s World Investment Report 2019 says FDI flows to Bangladesh have risen by 68 per cent to a record level of USD 3.6 billion. The Bangladesh Investment Development Authority (BIDA) revealed the report at a press briefing yesterday at a city hotel.

The UNCTAD report says the FDI growth in Bangladesh was driven by significant investments in power generation and in labour-intensive industries, such as readymade garments, as well as the USD1.5 billion acquisition of United Dhaka Tobacco by Japan Tobacco.

The FDI to India, which historically accounted for 70 to 80 per cent of inflows to South Asia, increased by 6 per cent to USD 42 billion. Investment was strong in manufacturing, communication and financial services—the top three industry recipients. Pakistan, the fourth largest recipient of FDI in the

sub-region, registered a 27 per cent decrease in investment to USD 2.4 billion.

The report said that for Bangladesh, the gains were mostly the result of a USD1.5 billion M&A deal in tobacco and new investments in power generation. Also, reinvested earnings in the country, mainly by multinational enterprises (MNEs) in banking, textiles and wearing apparel industries, more than trebled to USD 1.3 billion.

Speaking on the occasion as chief guest, Prime Minister’s private industry and investment adviser Salman F. Rahman said Bangladesh’s position in doing business ranking was likely to go below 100 in 2021 from the existing 176, as the government had taken various reform initiatives to improve the country’s business environment.

“Bangladesh is a very business-friendly country. We are taking different reform initiatives to improve the business environment. If we can implement all the initiatives, it’ll help only improve our ranking by 2021. In fcat, it is likely to go below 50 within the next five years,” he added.

Rahman urged all authorities concerned to come forward to implement the initiatives in their organisations to provide better and time-saving services to entrepreneurs.

The UNCTAD report notes explosive growth in the use of special economic zones (SEZs) as key policy instruments for the attraction of investment for industrial development. More than 1,000 such zones have been developed worldwide in the last five years, and, by UNCTAD’s count, at least 500 more are in the pipeline for the coming years.

Speaking on the occasion, Paban Chowdhury, executive chairman of the Special Economic Zone Authority (SEZA), said that as an instrument to support structural transformation, these zones had been designed to attract specific industries such as manufacturing, natural resource processing, or technology-intensive industries and services.

“The vision of having these SEZs has significantly improved the condition of attracting investments in Bangladesh,” he added.

BIDA executive chairman Kazi M Aminul Islam said the government was working to transform the country into ‘Digital Bangladesh’ by ensuring digitisation in all public services. “Digitisation is essential for improving the ranking in the ease of doing business,” he added.

The BIDA chief said the government wanted to transform Bangladesh’s economy from labour-based to knowledge-based and technology-based. He also said all ministries concerned should have their list of priority tasks to improve the business climate and should work in a coordinated way for better results.

“Ease of doing business depends on different issues. Many issues concerning the doing business index are related to one stop service (OSS) centres. So, the proper use of such centres will improve Bangladesh’s ranking in the World Bank’s global doing business report,” he added.

Aminul Islam said: “Through the OSS potential investors will get necessary permissions for making investments and starting a business. It will hep them get all the paperwork done for receiving various utility services like power, gas, water and telephone.”

“The FDI flow to Bangladesh will reach a new height after the launching of the service centre, as the new web-based system allows a company to start its activities within a short time,” he added.

Dr Ahsan H Mansur, executive director of Policy Research Institute, presented the keynote paper. SDG coordinator of Prime Minister’s Office, M Abul Kalam Azad, also spoke in the occasion.