What’s next for Bangladesh's investment climate after a landmark summit?
While the interim government attempts to reform the investment climate, reaping its full benefit falls in the hands of a future elected government
At the investment summit on Wednesday, Bangladesh Investment Development Authority (BIDA) Executive Chairman Ashik Chowdhury delivered a presentation that impressed the nation. His storytelling and eloquent portrayal of Bangladesh before foreign investors sparked a wave of admiration across social media platforms.
The Bangladesh Investment Summit 2025 began on 7 April and concluded on 10 April. It drew consistent attention and remained at the centre of national discourse throughout its run.
But the real question is how impressed were the foreign investors? After all the glitz and glamour of the summit, can we truly hope for a new dawn in our investment climate?
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Dr Syed Akhtar Mahmood, economist and former lead private sector specialist at the World Bank Group, believes that without proper follow-up, we won't reap the full benefits, just like what happened in the past.
BIDA Executive Member Shah Mohammad Mahbub also admitted this in a post-summit press conference. "The number of investment proposals we received at the summit is not the main focus. The primary objective of this event was to build a pipeline of potential investors so that we can track them and ensure actual investments in the future. In previous investment summits, we received many promises as well, but since there was no follow-up, those promises remained unfulfilled."
In an earlier interview with TBS, Dr Mahmood said, "We Bangladeshis probably have a thing for big, glamorous events. However, we often lack the focus on the implementation process that should follow, which is painstaking, not glamorous. But that's where the real work needs to be done."
The investment summit reportedly drew in some 450 foreign investors and representatives from 40 countries. During the four-day event, two investment deals were signed, while many pledged future investments.
Dr Mahmood highlighted that there are several intermediate steps between 'attending a summit' and actually 'opening a factory'. He suggested developing an "investor tracking system" to track down these potential investors. Such a system would keep track of where each investor is in the process and check if anyone is stuck at any stage.
Nahiyan Rahman Rochi, head of BIDA's Business Development Department, has already made assurances that the agency will maintain regular communication and monitoring with the investors to ensure foreign investment commitments translate into action.
A key reason this investment summit is significant is that it is the first of its kind since the fall of the authoritarian Sheikh Hasina regime. Could the political shift have an impact on investment attraction?
"Investors are likely to be reluctant to commit substantial funds during an unelected interim government's tenure. This is fact or reality," mentioned Asif Khan, president of the CFA Society Bangladesh and chairman of EDGE AMC Limited.
"Investors are likely to be reluctant to commit substantial funds during an unelected interim government's tenure. This is fact or reality. However, if the new elected government can maintain continuity, we may be able to reap the benefits of today's summit in the future."
Given the current situation in Bangladesh, several uncertainties remain. We do not know when the next election will be held, which political party will come to power, or whether the newly elected government will uphold the deals and policies being set now. These major concerns loom large.
"However, if the new elected government can maintain continuity, we may be able to reap the benefits of today's summit in the future," Khan noted.
He paints a hopeful picture — historically, our major barrier has been that the economy suffered due to wrong economic policies, but we are now recovering from those challenges. Our inflation rate has declined, and both foreign reserves and the currency have stabilised.
"These are the prerequisites for investment. Moreover, the interim government is taking commendable steps to improve the ease of doing business in the country, which will boost investor confidence," he said.
Dr Akhtar Mahmood points out that when investors express concerns about political instability, they are often referring to the policy and regulatory uncertainty that comes with it. Therefore, it is essential to streamline our policy and regulatory framework.
"A major problem that I want to emphasise is the lack of coordination between various sectors of the government," he noted.
To illustrate, he explains how BIDA could say one thing but Bangladesh Bank or NBR could take a different approach. This potential contradiction, or lack of coordination, is a big problem. BIDA's efforts may fail to produce results if the Bangladesh Bank suddenly starts restricting the repatriation of profits or NBR imposes a tax on a foreign investment with retroactive effect.
"Additionally, the sudden imposition of regulations without thinking about their long-term effects also creates uncertainty. We must remember that FDI attraction is the entire government's agenda, not just BIDA's," Mahmood said.
But the conversation does not end with FDI alone. While large-scale investors are crucial, the vitality of Bangladesh's economy also depends on the growth of its domestic entrepreneurship scene — particularly start-ups.
For Bangladesh, a country which grapples with employment crisis, promoting a start-up culture could be a game-changer. Bangladesh currently has 1,200 active startups providing 1.5 million jobs across various sectors. These companies have collectively raised nearly $1 billion in funding, with 76% of that coming from venture capital, according to ICT Division Secretary and Startup Bangladesh Limited Chairman Shish Haider Chowdhury.
In the start-up scene, challenge lies in the ease of doing business. The interim government has now declared moves to ease business operations with key reforms in trade licencing, internet access, finance etc. Bangladesh Bank has plans to set up a dedicated fund of nearly Tk900 crore to provide capital support to start-up companies, Governor Ahsan H Mansur announced at the Bangladesh Investment Summit.
"To be honest, I'd say the previous government's work on start-ups was arguably successful. While many other sectors were plagued by corruption, the distribution of start-up grants and investments was relatively fair. Most of the support went to promising ventures. Now, the interim government must also ensure that the most promising and groundbreaking start-ups receive this support," Asif Khan concluded.
Dr Akhtar Mahmood believes all businesses must be monitored regularly. As a member of the interim government's economic reform task force, in light of their report, he recommends establishing a Regulatory Reform Commission (RRC). Its role will be to maintain regular communication with businesses to identify areas where our regulatory system has issues, identify reforms, and advocate for their implementation.
Additionally, there are several areas where we need new regulations. This is because, if a new type of business and technology emerges in Bangladesh, the existing regulatory framework will not be able to cover it effectively. The proposed commission can identify such regulatory gaps.
