Md. Joynal Abdin
The Financial Express on January 11, 2010
ECONOMIC reforms can bring sustainable growth for Bangladesh. It has to diversify its exports and reduce dependence on readymade garment for forex earning. Bangladesh can revive its jute goods’ export market. At the same time, it should make its RMG more competitive in the global market. The country got ample opportunities over the last three decades to diversify its export basket to create options for survival in a competitive global market.
Due to fallouts from the global financial crisis, workers from Bangladesh, like other countries, are losing jobs abroad. The government should concentrate on spotting alternative job markets abroad for the workers. Trained manpower export can boost remittance earnings.
The reasons for failure to attract foreign investment, despite offering incentives, need serious probing. The economy awaits massive investment, domestic as well as foreign, for faster growth. To attract foreign investment, not many countries offer tax holidays for 12 years, 100 per cent foreign ownership, permanent residentship and full repatriation of investment and profit.
Why Bangladesh’s competitive worker wage and duty free access to the European Union (EU) and US markets, cannot attract foreign investment to Bangladesh call for serious study for corrective steps.
Inadequacy of infrastructure and red-tape need to be addressed. Government policy continuity would provide better assurance to the potential investors. Faster decisions and corruption elimination would better motivate them to invest in Bangladesh. Law and order and lending rates are important factors to either encourage or discourage investment.
The AL-led government is concentrating more on its political agenda than development pledges, made in its election manifesto. Delays in the automation of the government’s investment facilities like those of the Board of Investment has been taking a toll. The government should review, at least once a month, the investment picture for taking remedial measures wherever the environment is found to be not conducive to investment.
The world investment report– 2009 (WIR) states, Bangladesh got $1.09 billion US foreign investment in last financial year, or 60 per cent more than that in the previous fiscal. It compares poorly with $41.56 billion India got. The same year Pakistan got foreign investment worth US $5.4 billion.
Big companies are relocating their productive facilities in developing countries to take advantage of cheaper work force. Why Bangladesh cannot exploit the situation to its advantage remains a valid question.
During the last fiscal year, Bangladesh’s tele-communication, textile, weaving, banking, food processing, agriculture and fishery got foreign investment. It should be able to attract investment for power generation, ship building, infrastructure development and agro-processing. A more investment-friendly policy framework could possibly draw the needed investment, both domestic and foreign.