Bangladesh needs huge investment in different sectors to reduce unemployment and poverty as well as to attain Sustainable Development Goals. With the upcoming budget in mind, the government should focus on encouraging and promoting private investments, both from home and abroad
Rafiqul Akter: Bangladesh needs to improve corporate governance for attracting institutional and overseas investors, said experts.They have underscored the need for ensuring corporate governance to raise the existing investment flow for attaining higher economic growth.
Improving corporate governance practices and standards is especially important for listed companies looking to attract investment. It can also help state owned businesses by encouraging more independent rather than political appointees to their boards, they said.
Much attention has been given by regulators towards reforming the capital market, by for example introducing stricter rules for auditors under the Financial Reporting Act. The Bangladesh Bank has also been proactive in promoting broader CSR goals. These are all worthwhile initiatives, but more stress still needs to be placed on establishing an effective corporate governance culture in Bangladesh.
Good corporate governance practices can benefit all shareholders and other stakeholders by increasing transparency and improving the accountability of boards. They build confidence among institutional investors and are vital for improving access to capital from global markets.
For companies themselves, following best practice in Board governance structures can build long term value by helping to guard against reputation risks and improving decision making processes.
This works best when implemented not as a bureaucratic box-ticking exercise, but as part of a process of continual improvement in managing risks and opportunities by the companies involved.
As more asset managers and international investors are looking for opportunities in emerging markets, it is an apt time to encourage and implement best practice standards on corporate governance.
‘In the absence of timely implementation of projects, the government’s efforts to attract foreign investors go in vain, said experts. With the upcoming budget in mind, the government should focus on encouraging and promoting private investments, both from home and abroad, to create better employment opportunities in order to retain economic growth, they suggested.
As in previous fiscal years, this year’s Foreign Direct Investment (FDI) and local investment have seen little growth.
To attain Sustainable Development Goals (SDGs), Bangladesh needs huge investment in different sectors to reduce unemployment and poverty.
According to private sector investors and economists, attracting investments is going to be the bigger challenge, as the current state of investment in the country is in poor shape.
They also stressed upon an appropriate fiscal and economic environment to draw in investments, and emphasized upon the need for clear directions to end bottlenecks in case of starting businesses.
In the absence of an appropriate investment environment caused by insufficient infrastructure, port congestion, and poor transportation facilities, desired investment is not flowing into the country, claimed experts.
Research Director of Centre for Policy Dialogue (CPD) KhondakerGolamMoazzem said: “FDI is only moving forward because of the reinvestment of current investments.”
He said: “No new investments are taking place as entrepreneurs are not getting utility services such as gas and electricity connections. But paving way for newcomers might be the only key to enhancing investment income.”
Moazzem urged the government to take steps to attract new investments and create opportunities for expansion of the existing industries.
“In the absence of timely implementation of projects, the government’s efforts to attract foreign investors go in vain,” said the research director. “The government has to pressurize the implementation of projects to see they come to life.”
He added: “Actually, the focus should be given on improving the capacity for implementation, as every year, funds as well as projects remain under-utilized and unimplemented”.
Without increased investment flow, Bangladesh might fail to realize its SDG objectives, said experts. Increasing investment on infrastructural development, especially in the power and energy sector, and enhancing port, road, and highway capacities are required to attract investments from home and abroad, said Abdus Salam Murshedy, former president of Bangladesh Garment Manufacturers and Exports Association (BGMEA). “The government should prioritize the emerging investment sector,” said Murshedy. “It should also come up with attractive packages to lure new investments.