Bangladesh’s stringent laws make it difficult for local companies to expand and invest abroad.
While the Foreign Exchange Regulation Act of 1947 has been amended as recently as 2015, the regulations allow for limited foreign investment, and only on a case-by-case basis.
With an economy that has seen steady growth, it is disheartening to see that only eight companies were allowed to invest abroad, and only to a certain degree.
For further growth, it’s crucial that the current foreign exchange act is liberalised. Moreover, a strict regulatory act such as this goes against the government’s free market policy.
Bangladesh currently boasts a large enough foreign reserve such that foreign investment could be allowed to take place without much hesitation. In fact, the growing foreign reserve would increase inflation, and an increase in foreign investment would mitigate this in the future.
Despite how much Bangladesh has proved itself as an economic up-and-comer, running and expanding a business remains a difficult task. Bureaucratic red tape and corruption are only some of the factors which hinder our potential for economic growth.
As such, having even more laws and regulations lagging up the process here make little to no sense.
A more lax foreign exchange act will do much to ensure increased flexibility, and allow entrepreneurs the freedom required.
Is it any surprise that private investment has stagnated over the past few years?
Bangladesh’s dreams of middle income status cannot be realised if businesses continue to face unnecessary obstacles on the path to progress.
It’s a simple concept to understand: What’s good for local businesses is good for Bangladesh.