Local and foreign entrepreneurs have lost their interest to invest in the country due to the political turmoil and uncertainty, official sources said.
According to the Board of Investment Bangladesh data, only one foreign direct investor got registered for investment in January this year.
It amounts to Tk50 crore compared to an average monthly registration of Tk2,500 crore last year.
“Political crisis has added to woes of the existing crises of infrastructure, gas and electricity in the country’s industrial sector. These factors have made investors lose their interest in investment here,” a BoI official told Dhaka Tribune.
“Local investors feared that political situation might deteriorate further. Such fear might have already sent a bad signal to foreign investors who were interested to invest in Bangladesh,” he said.
In early 2014 foreign investors had wanted to set up industries in Bangladesh, the official cited.
The 2014 was a politically calm year compared to turbulent months of 2013 ahead of January 5 national election boycotted by BNP.
After a peaceful year, the 2015 has begun with the display of violent politics as the two main parties continue to remain at loggerheads.
BoI data shows foreign investments in 2014 were registered $3,000m.
According to the BoI, the real FDI was $1,640m (Tk13,000 crore) in 2014.
In the year, the re-investment, however, was $700m (Tk5,500 crore).
BoI saw a moderate growth in FDI situation in 2014.
A total of 30 firms - foreign, local and joint venture - registered with BoI in January this year. But of them, foreign firm was only one.
In the month of December last year, a total of Tk3,000 crore investment was registered. In January this year the figure came down to Tk1,000 crore.
In 2013, total volume of investment registered was $2,621m but the real investment was $1,599m.
BoI executive member Nobhahs Chandra Mandal said the country’s investment situation would “definitely improve if we can overcome political crisis.”
He said the BoI would hold road shows in France and Netherlands in March this year to attract foreign direct investment.
AB Mirza Azizul Islam, ex-finance adviser to a caretaker government, said the investment situation might not improve unless the two major parties reach a political consensus on the present crisis.
He said uncertainly had eroded investor confidence due to the prolonged blockade and hartal.
Despite political turmoil in 2013, Bangladesh received a foreign direct investment inflow of US$1.78bn, registering 37.5% rise from the previous year.
Bangladesh is attracting investment from both Western and Asian countries. The major countries from which investment is originating are United States, United Kingdom, Malaysia, Singapore, Hong Kong, Egypt, Canada, Netherlands and United Arab Emirates. There is potential for greater investment from India and China too.
“Prime Minister Sheikh Hasina has given the highest priority in improving the investment climate. It is her vision to make Bangladesh a middle-income country by 2021,” Dr Syed Abdus Samad, executive chairman of the BoI, told Dhaka Tribune in an interview early last year.
“With this in mind, the PM has played an important role in promoting investment opportunities and boosting investor confidence in every country she visited over the last five years,” he added.
At that time he stated the government was confident that FDI inflow would cross $2bn mark in 2014 and blamed political unrest for failure to achieve the 2013 target.
“We could have easily achieved this target for last year had there been no political unrest.” Dr Samad said.
