Infrastructure, atmosphere required for foreign investment

Despite a plummet in the flow of foreign investment, foreign direct investment (FDI) has increased in the country. United Nations Conference on Trade and Development (UNCTAD) estimates that the flow of FDI has increased by 68 per cent in 2018. But the amount is very little if we compare with the countries which received huge amount of FDI.

In 2018, India managed to attract the highest FDI amounting to $42.88 billion which is 78 per cent of the total amount received by the South Asian nations. Bangladesh ranked third obtaining 6.60 per cent amounting to $ 3.61 billion. Maldives seized the second position. But there is a mammoth gap between India and Bangladesh.

To increase investment for any country, experts stress socio-economic and political stability as well as the improvement of infrastructure and communication.
Though there is some sort of political stability in Bangladesh, the country lags behind in some areas. It is not easy here to acquire land for industries while entrepreneurs are harassed to get necessary government approvals. Such obstacles rendered Bangladesh a bad position in the index of the World Bank ease of doing business.

USA was the top investor in Bangladesh in the past. But China recently became the leading investor. The investment of China stands at $ 1.03 billion in 2018. The Netherlands and the United Kingdom are in the second and third positions respectively.

The initiative to set up 100 economic zones is one of the measures to lure investment from home and abroad. But there are huge gaps between the government’s plan and implementation. It is not enough to declare an area as an economic zone or acquire some land. The development of the infrastructure and the communication system has to be ensured.

At the time the government is taking various initiatives to increase foreign investment, the local investment is not satisfactory. The state of private investment is stalled to the same position. The confidence of the investors is the main condition to increase investment. But the policymakers have to acknowledge that the collapse in the banking sector and the ailing share market are the obstacles to restore confidence among the investors.

When Bangladesh settled maritime disputes with India and Myanmar, the government said a revolutionary change will come in exploring marine resources. It was also said that the country would be able to earn huge foreign currencies. But we don't see any interest of foreign investment in this sector.

Cheap labour is the principal element to attract foreign investment in Bangladesh. But now only cheap labour can’t bring adequate foreign investment. We have to give much effort to generate trained manpower along with the technological development. We have to ensure necessary land, developed infrastructure and communication system to set up industries. Bureaucratic complexities have to be removed. We have to focus on the establishment of those industries which will increase capital and employment. If the pre-conditions of investment are not fulfilled, the government’s campaign ‘Role Model of Development’ will end up just being mere words.