Abu Sazzad: Country’s total investment to GDP is low compared with the trade rival countries or even the neighboring countries. The neighboring countries total investment is between 35-45 percent to their respective countries GDP, said experts.
The investment ration should be at least 45 percent to attain the mid-level status country by 2030, they opined.
The investment ratio to GDP is 31.56 percent in the last fiscal year 2018-19, followed by 31.23 in 2017-18, 30.51 in 2016-17, 29.65 in 2015-16 and 28.58 in 201-15, according to the statistics of Bangladesh Bureau of Statistics (BBS).
Out of 31.56 percent investment in GDP in the last fiscal, the share of private investment was 23.40 percent, while the public investment was 8.17 percent.
With 6.7 percent GDP growth in China, its investment is 44 percent to the GDP. Vietnam has its GDP growth rate at 6.6 percent (2018), having 88 per cent of GDP coming from export which is only 15 percent in case of Bangladesh. Bangladesh needs to concentrate on attracting more private investment and diversify export base. The private sector needs a much business-friendly environment.
Both local and foreign investors are showing go and slow policy to invest in the country mainly because of the rising corruption, claimed experts. They have underscored the need for eliminating corruption to attract investors to invest in the potential sectors of the country.
Weak infrastructure, burdensome bureaucracy, rampant corruption, lack of transparency and the slow pace of the judicial system are the major setbacks for higher investment in Bangladesh, they said.
Apart from this, policy consistencies, favourable environment for businesses, speedy service delivery by the relevant agencies, and proper coordination among the government entities, taxpayers friendly attitude, and hassle-free export-import activities are the major requirements of the investors.
Talking to Daily Industry, Asif Ibrahim, former DCCI president recommended for ensuring ease of doing business to attract more investment in the country.
The corporate tax is high in Bangladesh which is discouraging the global investors to invest in the country, he said adding the neighbouring India is reducing the corporate tax.
Bangladesh need a huge investment for basic infrastructure like roads, rail and ports; power stations; water and sanitation and also for sectors like agriculture and rural development, climate change mitigation and adaptation, health and education to attain the goals of SDG as well as to ensure the mid-level status country by 2030, Asif Ibrahim said.
Dr AB Mirza Azizul Islam, former caretaker government adviser said that the private sector investment is 22 percent to 23 percent in the last few years mainly for infrastructure deficiency, lack of good governance and inefficient port services.
The authorities concerned will have focus to reform the basic economic institutions especially the banking sector.
Along with sound financial institutions, strong capital market is needed to ensure more investment in the country.
Bangladesh is still lagging behind in areas like property rights, electricity, transportation, credit and land, and security for businesses, Islam opined.
However, the experts have underscored the need for increasing the private investment to boost the economy. They said the private investments are constrained by a lack of land, reliability of energy supply, poor connectivity, cumbersome regulatory processes as well as regulatory unpredictability, high corporate taxes, limited access to long-term finance and shortage of skills, said experts.
Without removing the constraints, it will be difficult to achieve a sustained increase in the private investment rate, they opined.
They said private sector investment is crucial to reduce poverty and employment generation. The current credit flow to the private sector is not satisfactory because of the rising NPL in the banking sector. Infrastructure deficit and political uncertainty are the two major reasons behind the reluctance of foreign investors.
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