Despite political upheavals, Bangladesh received a foreign direct investment (FDI) inflow of US$1.78bn in 2013, registering 37.5% rise from the previous year, according to provisional figures compiled by the Board of Investment.
“The government is confident that FDI inflow will cross $2bn mark in 2014. We could have easily achieved this target for last year had there been no political unrest,” Dr Syed Abdus Samad, BoI executive chairman (minister) told the Dhaka Tribune in an exclusive interview.
He highlighted the government’s success in attracting investment over the last five years. “The FDI inflow has increased to over $1.78bn in the last year of the immediate-past Awami League government compared to $792.50m in the last year of the of BNP government (2006),” he pointed out.
“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,” said Samad, who led the BOI for last five years. “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.”
The BoI chief is a career bureaucrat-cum-economist who previously served as economic adviser to the President and principal secretary to the prime minister. He believes bureaucratic reforms undertaken by the government for simplification of procedures, digitisation and transparency for foreign investment contributed to the record inflow. “In addition, human capital and skills development has ensured lower cost of doing business.”
Samad said Bangladesh is an attractive destination for infrastructure and technology investment. “We hope the implementation of Public Private Partnership (PPP) initiative would increase foreign investment in these areas further.”
The key sectors attracting investment are telecommunications, textile and banking.
He said: “In this virtual world of connectivity, we have seen an explosive growth of mobile phones in the country. This is a major sector for investment growing exponentially.”
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.
Samad said the government’s infrastructure projects to improve communication and power and energy would boost investor confidence further in the next five years.
“According to most investors, there is visible improvement in overall national economic management. The ongoing infrastructure projects will attract further investment inflow to the country,” he said.
“The investment scenario is helped by the strong macroeconomic condition. All our indicators are stable and strong. We have seen sound economic management by the finance minister and others led by the PM that contributed to growing investor confidence,” he said. He mentioned that Moody’s rating for Bangladesh is higher than Sri Lanka and Pakistan, but slightly lower than India.
Despite the government’s successes in achieving record FDI inflow, Samad believes there is no reason to be complacent. “As far as investment is concerned, Bangladesh has taken off the tarmac.
We are set to fly high as one of the most attractive investment destinations in the region. The current inflow is only a fraction of our potential in the-long run,” he said.
Samad is optimistic about the future prospects of investment: “I believe the current government can increase annual FDI to $5-7bn in next five years once we cross the $2bn mark this year. Bangladesh is marching forward.”
