Policy gaps barrier to FDI inflow

Highlights

• FTA with various countries can liberalise Bangladesh's economy
• Separate court to resolve commercial disputes demanded
• Government urges Nordic countries to invest in Bangladesh 

The existing regulatory unpredictability has appeared as a stumbling block to creating a foreign investment-friendly atmosphere in Bangladesh, speakers said at a virtual event on Wednesday.

"Predictability is very important to attract an investor in a country. So, the country should have a predictable policy framework so that investors show interest," said Salman F Rahman, private sector industry and investment adviser to the prime minister at the event titled "Building a Sustainable Business Environment for Foreign Direct Investment: Outlook and Opportunities for Bangladesh".

The Nordic Chamber of Commerce and Industry (NCCI) in Bangladesh organised the discussion, which was co-hosted by Embassy of Denmark, Royal Norwegian Embassy and Embassy of Sweden. 

Salman F Rahman emphasised not changing the policy guidelines very frequently. 

"A foreign investor needs to know the exit policy from a host country. The widely expected exit way is the capital market," he added.

The PM's adviser said, "The diversification of the capital market can enable an environment suitable for foreign direct investment (FDI). Our capital market is much more active than before as there have been major changes in the administration of the Bangladesh Securities and Exchange Commission." 

"The FTA [Foreign Trade Agreement] with various countries can liberalise our economy more," he said urging the National Board of Revenue to increase the country's revenue base by expanding the tax net.
  
Md Sirazul Islam, executive chairman of the Bangladesh Investment Development Authority, said, "We want to attain a double-digit ranking in the World Bank's Doing Business Report-2021. The government is reviewing its Foreign Exchange Regulation Act to make easy trade and investment."

"We are ready to support FDI. If investors approach us, we will take necessary steps," he added. 

Replying to a question, he said, "Our legal system is very time-consuming. So, our law ministry is going to set up a separate court to resolve commercial disputes."

Abu Hena Md Rahmatul Muneem, chairman of the NBR, said, "The Bangladesh Economic Zone Authority is endeavouring to establish more than 100 economic zones in the country's potential areas to encourage rapid economic development through diversification of industries and augmentation of employment, production and export. We have high-tech parks as well."

"There are VAT exemption on several services have in the EPZs."  

He mentioned that they have given the opportunity of duty-free export. "Even our VAT rate is zero for all export items," he added.  

He urges the Nordic countries to invest in Bangladesh by taking all opportunities.  

Swedish Ambassador Alexandra Berg von Linde, said, "Bangladesh has potentials to become a modern business destination. We are committed to our partnership with Bangladesh."  

Tareq Rahman, president of the NCCI, focused on the importance of setting up an economic zone by Nordic countries in Bangladesh. 
As the keynote speaker, Miah Rahmat Ali, senior private sector specialist at the IFC, emphasised bold- and evidence-based reforms to ensure a safe environment for business operation.