Along with perennial infrastructure deficits and bureaucratic bottleneck, regulatory framework complexity is the main barrier for attracting foreign direct investment in Bangladesh, trade analysts said yesterday.
Bangladesh needs to align its foreign regulation act with greater regional and global laws for tapping opportunities offered by its geographical proximity, they suggested.
The local and global trade analysts gave their views at the concluding day of a two-day Bangladesh Investment and Policy Summit 2016 by the government at a city hotel yesterday.
“Bangladesh is competent in global context as well as many countries in East Asia. At the same time, I see many challenges for Bangladesh,” said Esperanza Lasagabaster, Practice Manager, Trade and Competitiveness, World Bank Group.
She said absence of intra-regional connectivity, access to service and power, complexities in the regulatory framework and foreign regulatory act are the barriers for attracting foreign investment.
In addition, in improving connectivity in basic infrastructure, it is important for Bangladesh to establish more transparent and predictable policy regime to attract investment, she noted.
Laying emphasis on brining reforms in foreign regulatory act, she said there is a gap between foreign policy and practice.
“In absence of widely competent law, FDI is regulated by multiple laws. For example, foreign policy on private investment protection is very supportive, but it has left many gaps, which were not supportive with the FDI,” said Lasagabaster.
Bangladesh needs to continue evolution of its foreign regulatory act for better alignment with greater regional and global laws for taking stock of geographical position, she said.
Lasagabaster, however, said: “The glad news is that new commitment and political engagement between Bangladesh and India offer a unique historical opportunity. Now is time to take an action more than ever.”
Centre for Policy Dialogue Executive Director Mustafizur Rahman said investing in Bangladesh, an investor would get access to domestic, regional and global markets. “Making investment in Bangladesh, investors will enjoy immense benefits including duty-free and quota-free market access to almost across the world for at least next 10 years until Bangladesh graduates from least developed countries to next stage.”
Speaking at another session, Professor of International Business Department at Dhaka University SM Mahfuzur Rahman said when an entrepreneur starts to prepare documents for business, he or she faces bureaucratic tangle first and then different laws.
“These are the great problem for making an entrepreneur in the country.”
“Technological innovation, simplification of policy regulations and connecting domestic and foreign investors are the key to attract FDI in Bangladesh.”
CEO of Robi Axiata Limited, Supun Weerasinghe, said the government should address the taxation complexity to attract foreign investors. Frequent change of rules and regulation discourage the investors to start their business.
In other session on private sector development policy ecosystem in Bangladesh, Dhaka Chamber of Commerce and Industry President Hossain Khaled said innovation is the key to attract both domestic and foreign investors.
“The country needs a forward looking FDI policy as the existing policy fails to address the problems,” he said.
Policy Research Institute Executive Director Ahsan H Mansur said breaking into new markets, new products, improving workers’ skill and welfare, building a supportive economic environment and meeting the challenge of serviceable land were the five pillars for future prospect of the country.
World Bank Group’s global investment policy lead Roberto Echandi said the secret of success for wooing boosting investment is to connect domestic and foreign investors.
Head of DFID in Bangladesh Sarah Cooke said simplification of regulatory affairs and creating an investment-friendly policy ecosystem was critical for Bangladesh as the existing policy regime is very complex.