Despite the global economic downturn, in the past decade Bangladesh has maintained a healthy 6 per cent plus GDP growth and it needs to accelerate to over 8 per cent with the continuation of existing remittance growth to be a middle-income country by 2021, according to ICCB.
The International Chamber of Commerce-Bangladesh (ICCB) at the editorial of its latest News Bulletin that released today also said sustained growth has generated higher demand for improved infrastructure including uninterrupted power supply, better transport and telecommunication services, which require more private investment.
It said: “to achieve higher growth trajectory, Bangladesh has to attract FDIs to address infrastructure deficit, productivity gap and diversification of export base as well as transparent and timely decision-making and ensuring stricter enforcement of government commitments.”
In the fiscal budget, the government has set a target of 7.3 per cent growth. But, the Asian Development Bank (ADB) opined the total investment should be around 34.3 per cent from the existing 28.7 per cent to achieve the target.
The editorial said FDI inflow into the country has been increasing for the last several years. It stood at US$ 1.73 billion in FY 2013, registering a 45 per cent growth over US$ 1.19 billion a year ago. According to the Board of Investment (BoI) data, the United Kingdom topped the list of FDI inflow in Bangladesh followed by Malaysia, Singapore, South Korea and USA in 2013. But, analysts believe that most of these FDIs are for expansion of existing industries.
FDI still constitutes a low share of 1.2 per cent of GDP in 2013 as against 1.3 per cent in 2012, which is considered to be much lower compared to other countries, such as Myanmar, Laos, Cambodia and Vietnam.
In order to attract FDIs, experts stressed the necessity of bringing all the services under one umbrella to ensure hassle-free investment atmosphere and provide one stop service in its true sense.
At present, getting permission for any foreign investment-related project, investors need to move several ministries and departments to obtain permission or licenses making their investments.
The BoI should formulate an Investment Policy to attract more FDI. Analysts say foreign investment would flow in to the country if BoI could assure the investors about two things — land and primary energy like power and gas.
Higher GDP growth demands higher FDI: ICCB