• Monday, Nov 19, 2018
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Bangladesh ready for massive foreign investment

  • Published at 10:19 pm September 5th, 2018
FDI-infrastructure
The rapid development infrastructure will aid in foreign direct investment in Bangladesh RAJIB DHAR/ MEHEDI HASAN

Under the leadership of Prime Minister Sheikh Hasina, the inflow of foreign direct investment (FDI) to the country has almost tripled during ruling Awami League’s nine years in office

The confidence of foreign investors in Bangladesh has increased, as the country has taken a series of measures to: build up investment-friendly infrastructure; develop the energy sector; provide necessary facilities and support to set up industries; and simplify rules and regulations.

Under the leadership of Prime Minister Sheikh Hasina, the inflow of foreign direct investment (FDI) to the country has almost tripled during ruling Awami League’s nine years in office.

Central bank data shows Bangladesh received $961 million in fiscal year 2008-09, while FDI inflow increased to $2,454.81 million in FY16-17.

The country received $2,607 million’s-worth of foreign investment from July to May in FY17-18, according to the latest data of Bangladesh Bank (BB).

According to economists, stakeholders, and regulators, Bangladesh has been able to attract the increasing amount of FDI thanks to consistent policy support from the government.

In his budget speech in June, Finance Minister AMA Muhith said that the government has seriously reviewed failures to attract FDI and taken steps to identify the obstacles, as well as take necessary action, to overcome them.

He said: “I firmly believe that with the ushering in of a stable and advanced economy after 2015 we were able to attract more foreign investment.”

He mentioned: the introduction of the One-Stop Service, performing well in the Ease of Doing Business Indicator, establishing the Bangladesh Economic Zones Authority (BEZA), and the Bangladesh Investment Development Authority (BIDA)—as a part of developing an environment for investment.

“One of the pre-conditions for rapid economic development is increased investment. We are gradually increasing public investment. However, the purpose of this investment is to create an investment-friendly environment for the private sector as well as attract foreign direct investment,” he said.

The availability of electricity, gas and water connections, timely processing of investment proposals, availability of undisputed land, etc., play a crucial role in attracting investment, said the finance minister adding: “We have enacted a number of laws and regulations to make these services easily available to the investors.”

One-Stop Service (OSS)

The government has almost completed the software development to provide 150 services implementing the newly-enacted law, the One-Stop Service Act, 2018— similar to Singapore’s approach.

Kazi M Aminul Islam, executive chairman of BIDA, told the Dhaka Tribune: “The One-Stop Service Act will help remove all difficulties investors face before starting their businesses— upon final approval. It will facilitate the formation of an authority that will ensure quick service for the investors from a single office.”

When asked how many services are available under the one-stop service now, the BIDA chief said: “We are now providing 15 services including clearance certificates related to foreign borrowing, import recommendations, and appointment of foreign employees—under the one-stop service.”

“Six organizations – BIDA, Bangladesh Bank, NBR, Rajuk, the Bangladesh Electrification Board, and the Office of the Chief Controller of Imports and Exports – are providing the services.”

“The one-stop service will basically be all service in an automated and digitalized format, for investors to access through a single window. It’s not an easy task. For this, there is a need for systemic integration across all service-providing stakeholders,” said Kazi Aminul.

He added: “The work is in progress and hopefully all the stakeholders will be able to provide the services by the end of this year.”

Thirty-four agencies have provided 150 services under OSS in countries like Singapore and New Zealand.

BIDA initially aims to provide 15 services through 15 organizations, the BIDA executive chairman said.

Performing better in Ease of Doing Business indicators

According to BIDA executive chairman, Bangladesh’s position in the World Bank’s Ease of Doing Business Index is very important as the country’s investment environment is presented to the world’s investors through it. Given its importance and as per Prime Minister Sheikh Hasina’s directive, BIDA is working to make sure that the country maintains a double-digit position in the index.

The government has taken a time-bound action plan, and formed a taskforce in consultation with each ministry associated with each sub-indicator.

“For this, we have undertaken massive reform programs. The Supreme Court, 18 ministries, and 25 different organizations are helping us. We want to improve in all the 10 criteria set in the Ease of Doing Business Index,” he added.

Economic Zones

The government enacted the Bangladesh Economic Zones Act, in 2010, to establish economic zones in areas to potentially attract more foreign investment.

In accordance with this Act, the Bangladesh Economic Zone Authority (BEZA) was established under the Prime Minister’s Office in 2011. The Private Economic Zone Policy 2015 was also formulated.

Project clearance, visa recommendations and assistance, work permits, as well as import and export permits services are now being processed under BEZA’s one-stop service.

The government aims to establish 100 economic zones on 30,000 hectares of land by 2030.

When contacted, BEZA Executive Chairman Paban Chowdhury told the Dhaka Tribune: “So far, we have created a land bank, to ease the crisis of land for businesses and industries, and have leased a total of 76 land units for economic zones—out of 100.”

The authority has also acquired over 16,000 hectares of land of its targeted 40,000 hectares for economic zones across the country; it began receiving scores of investment proposals for the zones since, he added.

“We are also maintaining two economic zones under public-private partnership (PPP) in Mongla and Mirsharai—while developing four economic zones for China, India, and Japan under the government-to-government initiative.”

India will establish economic zones in Mirsharai and Mongla, and land acquisition is complete for Japan’s special EZ in Araihazar of Narayanganj; the Chinese special EZ in Anwara is on more than 300 hectares of land, added the BEZA chief.