Domestic investment must be increased first to encourage foreign investors, they told the seminar titled 'Danish Days in Bangladesh' organised by the Royal Danish Embassy in Dhaka at a local hotel.

"Bangladesh needs to address corruption and law and order issues for ensuring faster economic growth," Danish Ambassador Niels Severin Munk said speaking at the inaugural session of the seminar.

"I feel these issues have to be addressed. These are the barriers to foreign investment," he said. "If domestic investment does not take place, how come you expect that investment will come from outside the country?"

Echoing the envoy, Chairman of Bangladesh-Denmark Business Forum Per Heisselberg said corruption and law and order are precisely the main obstacles to attracting foreign direct investment (FDI) to Bangladesh.

Heisselberg suggested increasing efficiency in Chittagong Port and doing adequate homework for wooing investors. Bangladesh can attract Danish investment in joint venture projects if right steps are taken, he felt.

Speaking at the function, Commerce Minister Altaf Hossain Choudhury invited Danish entrepreneurs to invest in Bangladesh taking the advantage of the attractive incentive packages offered by the government.

Executive Chairman of Board of Investment (BoI) Mahmudur Rahman however presented an optimistic investment scenario saying the increase in domestic investment over the last two-and-a-half years was "phenomenal".

Actual FDI inflow to Bangladesh in 2003 was US$432 million and the growth was 31.7 percent, he mentioned.

Referring to ESCAP report, Rahman said private FDI went up by 41.5 percent in 2003 and Asian Development Bank in its latest Quarterly Economic Update also mentioned that there was a turnaround in investment.

"We talk about only negative things…and it is frustrating. Of course, there is a serious problem in infrastructure. Despite that our growth in industrial GDP in the last two years was more than two percent," he said.

"If there was no confrontational politics, industrial GDP could have been much higher."

Referring to a Jetro (Japan External Trade Organisation) study on comparative cost of doing business, the BoI executive chairman said, "the cost of doing business in Dhaka is much lower than that of New Delhi."

Commerce Secretary Suhel Ahmed said Bangladesh's products enjoy duty and quota free access to Danish market under ‘Everything But Arms’ initiative of EU and it provides a huge opportunity for the Danish investors.

"But the trade volume between Bangladesh and Denmark is low compared to potentials.

Bangladesh's export to Denmark amounts to only US$70 million while its imports worth $29 million," he mentioned.

Commercial Counsellor of Danish Embassy in New Delhi Ulrik Eversbusch made a brief presentation about 20 Danish companies while Deepa Hingorani of Industrial Fund for Developing Countries (IFU) made a presentation on IFU activities in trade promotion.