Poor infrastructure, political wrangling stymie FDI flow |
Star Business Report
Poor infrastructure, bureaucratic complexities and confrontational politics are main hindrances to foreign direct investment (FDI) in the country, speakers at a roundtable said yesterday.
Despite attractive incentives offered by the government, the country fails to woo substantial amount of FDI due to these hindrances, they said.
The discussants also stressed the need for media role to attract FDI.
The roundtable titled 'Promotion of FDI in Bangladesh through development of private EPZs, role of media, investment and private sector' was organised by Bangladesh Enterprise Institute (BEI) in Dhaka.
The speakers also noted corruption is a big threat to businesses in Bangladesh.
They said as Bangladesh's track record on macro-economic stability has been superior, the country should have attracted hefty amount of FDI.
If Bangladesh wants to elevate its position in the world as an FDI-destination, it has to raise the skill of its labour force, reduce corruption and burden of excessive regulations, improve infrastructure and ease domestic finance flow, they suggested.
In his keynote paper Shamsul Huq Zahid, deputy editor of The Financial Express, said the high cost of finance in the form of higher lending rate is yet another obstacle to stronger export performance across the board in Bangladesh.
From the late 70s Bangladesh has been offering lucrative incentives to foreign investors. But the country has so far failed to attract significant number of investors, he said.
However, during the same period, Southeast Asian countries like Thailand, Malaysia, Indonesia and the Philippines with their cheap and skilled labourer and better infrastructure facilities attracted a huge number of investors from developed economies, he added.
The keynote paper admitted that the year 2005 has turned out to be a year of good omen for Bangladesh in terms of FDI flow. Foreign investors, including Tata Group of India, Asia Energy of the UK, Dhabi Group of UAE, High-tech Group of Saudi Arabia and Vulcan Energy of USA, have shown active interest in investing around $12 billion in Bangladesh.
Speaking on the role of media in attracting FDI, the discussants said media can play a very important role in presenting a positive or a distorted image of a country both domestically and internationally. But the international media has not been that fair in projecting Bangladesh, they said.
BEI President Farooq Sobhan said, "Media is a watchdog of a country. A prospective investor is influenced by the image of a country projected in media," he added.
He said the media should project the country abroad in a more attractive way. It must understand the key issues that relate country's image.
"We have a lot of opportunities for attracting FDI. But due to lack of transparency and good governance, we have lost our position in the world market, Sobhan said adding that cashing in on our failures, Vietnam and Mayanmar have now been able to attract notable amount of FDI."
Mahbub Alam, editor of The Independent, presided over the roundtable, which was also attended by media professionals and representatives from government organisations and NGOs.
Farooq Sobhan (L), president of Bangladesh Enterprise Institute (BEI), speaks at a session of a roundtable organised by BEI in Dhaka yesterday as Mahbub Alam (C), editor of The Independent, and Shamsul Huq Zahid, deputy editor of The Financial Express, look on. PHOTO: STAR