The flow of Foreign Direct Investment (FDI) into Bangladesh posted a promising 7.78 percent growth in the first quarter of the current financial year despite several setbacks including the horrific Gulshan café attack that had created a tough challenge for the economy.
Net FDI inflow during the first quarter (July-September) of the current FY 2016-17 stood at $642 million, which is $50 million or 7.78 percent higher than the $592 million fetched during the same period last fiscal, according to Bangladesh Bank (BB) data.
The inflows foreign direct investment into the country totalled $2.5 billion in 2015-16 fiscal.
The terror attack at the Holey Artisan Bakery in the capital’s diplomatic neighbourhood on July 1 has turned the world’s attention on escalating concerns over the security situation in Bangladesh, which also cast a shadow over the thriving economic activities in the country, especially exports.
“However, the unfortunate incident could not cause much damage to the economy. Foreign investors are still interested in investing in Bangladesh. And the rise in FDI inflow is the testimony of their confidence in us,” Touhidur Rahman Khan, director of Bangladesh Investment Development Authority (BIDA) said on Wednesday.
“We have overcome the challenges thanks to the prompt measures taken up by the government to tighten the security arrangements to prevent reoccurrence such incidents as well as to create widespread awareness against militancy,” he added.
BIDA started its journey on September 1 in a bid to boost the country’s investment portfolio. The new agency was formed by merging the Board of Investment and the Privatisation Commission.
Khan said BIDA promises a friendlier and easily accessible business climate in Bangladesh aimed at attracting more foreign investors by simplifying the procedures for starting a new business and getting the necessary services required for operating the business.
He said some proposed amendments to the existing procedures will reduce the number of requirements and the investors will have less time elapsed to get the ownership of land.
“Currently, the completion of all procedures to obtain the final ownership of a land requires a total of 1,256 days. This is utterly non-friendly to attract foreign investment. So the time required for land registration must be reduced. A proposal has been placed to the prime minister in this regard.”
He also said the VAT registration seems to be unnecessary at the time of registering for setting up an industrial unit whether it is a local or foreign investment.
“It (VAT registration) is practically required only when an industrial unit starts manufacturing goods. So our latest proposal recommends for curtailing this requirement,” Khan said.
He also observed that Bangladesh needs higher FDI to attain its goal of becoming a middle-income nation in the short-term and a developed nation in the long-term, adding that the government is preparing the necessary grounds to boost FDI.
“Simplifying start-up processes for businesses is one of the initiatives we are taking. And once the business climate is made to be friendlier and easily accessible, I strongly believe that investors from China, India, Japan, US, UK, Australia, Euro Zone and many African nations including Sierra Leone will flock to our country,” the BIDA director said.
As per the WTO rankings, Bangladesh moved two-notch ahead from 178 to 176 among 192 countries in respect to improving the business climate.
“Our target is to lift Bangladesh up to the 100th position initially,” he said.