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Friday, October 12, 2012
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IFC to invest $500m in Bangladesh this year

The International Finance Corporation (IFC), a member of the World Bank Group, plans to invest over $500 million in Bangladesh this year in energy, banking and agriculture sectors, officials said yesterday.

Karin Finkelston, IFC's first vice president for the Asia Pacific, disclosed the plans during a meeting with Bangladesh Bank Governor Atiur Rahman at Imperial Hotel in Tokyo.

Rahman is now in the Japanese capital as part of a Bangladeshi delegation to attend the semi-annual meetings of the WB and International Monetary Fund.

On the sidelines of the meetings, the governor also attended a high-level discussion forum on "South Asia and the global economic crisis: can regional cooperation buffer volatility and enhance growth?".

World Bank Managing Director Mulyani Indrawati chaired the forum, which was attended by finance ministers and governors from South Asian countries.

Speaking at the event, Rahman said countries in South Asia are all on path of growth and poverty reduction, at varying paces and with varying patterns of inequalities in income and advancement opportunities for the poor.

Larger economies like India have been growing at sustained high rates aided by huge inflows of external investment, he said.

Among the smaller economies, Bangladesh has maintained somewhat slower but steady, stable growth with much lower levels of foreign investment inflows, he said.

"On many counts of social advancement indicators, smaller economies like Bangladesh and Sri Lanka have been faring better than their larger, faster growing neighbours, indicating that growth processes in these smaller economies have been more inclusive and equitable."

The governor said problems like inadequate physical infrastructure and income poverty in large segments of population bedevil most of the South Asian countries.

Financial markets in South Asia have proven ill-equipped in intermediating the region's foreign exchange reserves into investments needed in the region.

"This picture of South Asian growth makes a compelling case for regional cooperation and integration as the way forward towards faster, more inclusive growth, stability, and poverty reduction."

"There are lots to be gained from promotion of intraregional trade and investment by way of output, income and employment."

He said there have been numerous initiatives, bilaterally as well as multilaterally in the Saarc forum.

Despite numerous rounds of extensive dialogue and agenda setting, meaningful progress in concrete terms remained slow over the decades, he said.

"Greater trade integration and removal of tariffs will expand regional markets for our exports, compensating to some extent for demand weakness in advanced western economies. Key issue here is lowering non-tariff barriers to trade."

"Greater labour mobility within the region can help enhance output competitiveness in host countries while helping income growth in source countries. This will need major easing of visa restrictions."

On Wednesday, the governor also held a meeting with Takami Onodera, chief executive for the Asia and Oceania at the Bank of Tokyo Mitsubishi UFJ Ltd.

Rahman said Onodera has disclosed his bank's plans to open a branch in Bangladesh. The bank also wants to relocate its business from China to Bangladesh, the governor said, quoting Onodera.

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