The regional connectivity, with opening up economic corridors, might bring more FDI
To attract Foreign Direct Investment (FDI) in the post-Covid-19 era, experts on Saturday called for a stable, consistent policy regime, as well as a wide range of one-stop services (OSS) and automation in providing services.
They also said Bangladesh lagged far behind in creating a business-friendly environment for global investors, which is due to lack of automation, and administrative barriers.
They made the recommendations at a webinar titled “FDI Situation in Bangladesh: Problems and Prospects by Covid-19” organized by the Economic Development Research Organization (Edro).
Discussants of the webinar demanded holistic approaches for developing quality governance and competitive tax measures to facilitate hassle free foreign investment, automation in customs clearance process, and integrated port and logistic infrastructure for enhancing cross border and regional connectivity.
“Our trade policy is highly protected and trade-to-GDP ratio is falling as we are concentrated on the domestic market rather than the export market,’’ said Ahsan H Mansur, executive director, Policy Research Institute (PRI).
"Bangladesh’s FDI-to-GDP ratio is about 5.90%, which is the least, compared to other countries even though we lag behind Bhutan. We must review the existing trade regimes for making it functional that will help to attract relocation of industries as well," said the economist.
He advocated for an inclusive and diverse range of one-stop services (OSS) i.e., automation, paperless trade measures, etc, to attract more FDI in the post-Covid-19 era.
Meanwhile, researchers and other economists also called for policy reforms and consistency for luring investment.
Nazneen Ahmed, senior research fellow, Bangladesh Institute of Development Studies (BIDS), shed light on policy inconsistency that must be addressed for facilitating long-term investment.
Covid-19 is now shifting the whole supply chain system from traditional to digital and e-commerce based, and the future investment scenario would change considering the integrated port, logistics, and other allied services facilities, she remarked.
“We must go for massive policy reforms, including the foreign exchange and logistics regulation with a projection of future policy changes,’’ said MS Siddiqui, vice president of the International Business Forum of Bangladesh (IBFB).
He stressed for skilled manpower development through training and lifelong learning.
“Yet, we couldn’t attract much FDI despite having a $30 billion plan in our prospective plans,” said Md Mazadul Hoque, a banker and economic analyst.
“Covid-19 along with the long-standing US-China trade war pushed businesses to relocate but Bangladesh is yet to prepare to take it while competitive economies like Vietnam, Cambodia, Indonesia and India are preparing to grab the opportunities of relocation," he added.
The regional connectivity, with opening up economic corridors, might bring more FDI.
In 2019, Bangladesh received $2.87 billion in foreign direct investment (FDI), down by 20.46% compared to $3.61 billion in 2018.