CURING THE IMAGE PROBLEM
Foreign direct investments (FDIs) into Bangladesh continue to be not so impressive whereas other countries in its neighbourhood continue to be major beneficiaries of FDIs. China is at the top in receiving FDIs. But India and Pakistan are also receiving FDIs which are much bigger than the amounts received by Bangladesh although these subcontinental countries are probably not offering remarkably better conditions of investment or returns to the foreign investors than Bangladesh.
Thus, it is time to analyse what are the major constraints standing in the way of attracting a much greater volume of FDIs by Bangladesh and to address them promptly and effectively.
Any sound analysis in this respect is very likely to show up that the biggest bottleneck ‘apparently’ is the country’s inadequate energy supply. Investors in many cases get scared by tendentious or poorly written pieces in the media about insufficient power and gas in Bangladesh.
For example, there is hardly knowledge abroad that in recent years government has been able to increase power generation from a paltry 3,500 mw to nearly 6,5000 mw. This added generation capacity is meeting largely the current demand for electricity. More significant is the fact that government remains engaged dedicatedly in a fast-track programme to boost power production to the neigbourhood of 10,000 mw by the time it ends its tenure in 2018.
A similar energetic programme and its execution is noted to increase gas production and find new reserves of gas. Already, some gas fields have been discovered and gas from the same is being readied for sending to the national gas grid .
Thus, the energy situation is looking up as a whole and foreign investors can expect steady and reliable supplies of energy in Bangladesh in the mid and longer terms. But how many potential foreign investors know about this improving energy situation in Bangladesh ? A few perhaps.
It would not be an overstatement to say that Bangladesh has been suffering–most undeservedly–from an unfavourable perception abroad. There are many determinants of FDIs such as a positive macro economic environment, sound state of infrastructures, easily trainable workers, good terms and conditions for repatriation of capital and profit by the investors, etc. Bangladesh is not lacking so much in these aspects in relation to its neighbours. In fact, its labour cost is lower than even China or other countries in the South Asian region. Its infrastructures need upgrading and improvement but are not so bad as to divert foreign investments on a large scale. Its macro economy, with some slumps, has been stable on the whole for a long period. The macro economic indicators, specially the foreign currency reserve, improved a great deal in recent years.
Besides, the aptitude of its workforce to adapt to the requirements and training of foreign funded enterprises is noted to be relatively good. Certainly, the conditions for FDIs in Bangladesh can be further improved or need to be improved. But the same can be no reasons for greater foreign investments not coming into the country.
Bangladesh should have been a notable investment destination for foreign investors by now from whatever opportunities it presently extends to them. Why the investors have not responded yet to these opportunities, if one main answer is sought to this question, it could be that potential investors are mainly ignorant about what this country has to offer to them or they are demotivated by an image problem of the country that does no justice to it.
First of all, there is much information gap about Bangladesh abroad. It is not known by many intending investors that Bangladesh has developed a world class export-oriented apparel industry, that it exports high quality shrimp and frozen foods, that it has much potential to make and export a wide range of environmentally friendly products which have rising demand in the world market and that the biggest components of production costs, wages to be paid to labour, are the cheapest by world comparisons in Bangladesh that should help them to be very competitive.
The local press and local correspondents of the foreign media, operating from Bangladesh, should take the lead in reporting extensively the success stories of Bangladesh in the economic spheres instead of emphasizing only the negatives of the country.
The chamber bodies should also work together to project the country regularly in favourable light through organising international seminars, publicities in international business media, greater holding of exhibitions of Bangladeshi products abroad and circulation of information about the good rates of return from investment in Bangladesh.
The publicities ought to singularly counteract the canard that Bangladesh is a singularly law and order problems ridden country and credibly expose it to the foreign investors that law and order conditions in Bangladesh are at least equal to, if not better, compared to the other countries of South Asia.
MARCH 12, 2014