SDGs may not achieve
Abu Sazzad: The current FDI inflow is contradictory to attain the sustainable development goals (SDGs) for Bangladesh as the country needs at least US$10 billion landmark FDI annually to reach such status, said experts.
Although the FDI is increasing every year but the net FDI inflow is far behind the required amount to ensure SDG. In the recent year, the FDI is contributing slightly over 1 percent to gross domestic product (GDP) but the share should be at least 3 to 4 per cent to GDP to attain SDG, they said.
On the other hand, FDI inflow is supposed to be 3 percent of GDP and it should be about $9 billion as per the target of seventh five-year plan of the government but Bangladesh is far behind achieving such target, claimed experts.
However, Bangladesh received US$1.12 billion net FDI in the first five months (July to November) of the ongoing fiscal 2019-20 while it was $1.08 billion during the corresponding period of the last fiscal 2018-19. The country received 1.18 billion net FDI in 2014-15, followed by $2 billion in 2015-16, $2.45 billion in 2016-17, $2.58 billion in 2017-18, $3.89 billion in 2018-19, according to Bangladesh Bank data.
Bangladesh has a lot of scope to attract more FDI but multifarious factors are hindering FDI inflow in the country including bureaucratic interference, irregularities in processing papers, overlapping administrative procedures, absence of a transparent system of formalities, continuity and prevent timely implementation of strategic, procedural, and evenroutine duties, poor infrastructure support, lack of professional personnel, lack of commitment on the part of local investors, unexpected delays in selecting projects in studying feasibility, frequent changes in policies on import duties. Apart from this, lack of investors’ confidence and congenial environment, unavailability of land, institutional weakness, and corruption are hampering FDI inflow, said experts.
Efficient bureaucracy, simplification in procedures for FDI registration, improvement in legal framework can boost FDI, they opined.
Foreign investors are also concerned about inconsistency in the government’s policy, they said adding that government’s agreement with foreign investors should be watertight and it should not be changed along with the changes of governments.
A strong partnership between the public and the private sectors is needed to solve the problems faced by the foreign investors and for creating better business environment to attract more FDI, they pointed out.
Former Dhaka Chamber of Commerce and Industry (DCCI) president Abul Kasem Khan said Bangladesh still lags behind in ease of doing business which is hindering FDI inflow. “There is political commitment but it gets stuck when it comes to execution, which may be for lack of cooperation among the ministries. So, in improving ease of doing business and removing infrastructural deficiency, quicker implementation is a must,” he suggested. In boosting the investors’ confidence, economists as well as businesspeople also urge the government to address corruption and ensure good governance in all sectors.
Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem has underscored the need for improving the supply chain to attract more FDI in the country. Continuation in policy regime is needed to boost confidence of foreign investors, he mentioned.
As a whole, Bangladesh is yet to reap the best out of its potential in attracting FDI. For this, the government should stop corruption and ensure good governance in every government agency,” said Moazzem.
