The development of Bangladesh's infrastructure sector is drawing foreign investment while the construction of a deep seaport, in particular, will be the key player to this end, according to experts.
They stated this at a virtual discussion entitled "Corona's Impact on Foreign Investment: Is Bangladesh the New Destination?" organised by the Lawyers and Justice Foundation, MMH and The Business Standard on Friday night.
Salman F Rahman, non-governmental industry and investment adviser to the prime minister, attended the programme as the chief guest.
In his address, Salman F Rahman said foreign investment was coming in the agricultural sector as well as the industrial sector.
"We need more investment here. In the last discussion with America, we sought investment in agriculture," he said.
Referring to big projects like Padma Bridge and Karnaphuli Tunnel, he said at one time no one could have imagined that Bangladesh could carry out such projects on its own.
"We have now reached a stage. The target is now to reach a middle-income country status in 2030 and a developed country in 2041," he added.
Mentioning that the development work is going on in the infrastructure sector, he said the Matarbari project will be a game-changer since it will be the country's first deep seaport. The Japanese have already begun work there.
Noting that the allegation of increasing project costs was correct, he said it was due to some problems, but it is also a kind of lesson for all. This is being reviewed at the weekly ECNEC meetings.
The seasoned business tycoon said a long-term bilateral arrangement is being made with Japan to bring in foreign direct investment (FDI). Bangladesh was not on the first list of factory relocations from China. There ASEAN countries get top priority while the next list includes Bangladesh and India.
Focusing on the IT sector, he said, "We are not able to reap the full benefit of the capacity developed in IT services. This sector's exports have now crossed $1.8 billion. The position of freelancers in Bangladesh is now after India. Foreign investment is also coming here."
"This will be the next big hope after RMG [ready-made garments]," he mentioned, saying that attempts are being made to provide all digital services under a one-stop service.
Executive Chairman of Bangladesh Investment Development Authority (BIDA) Mohammad Sirazul Islam said there are some problems with the regulatory framework and work is going on to address the issues.
"We have already done small work on the 'Ease of Doing Business,'" he explained.
He added that company law is changing dramatically and reform to bankruptcy law is underway. There is also a secure transaction law in the country.
There are some pre-conditions for FDI and if foreigners want to invest, they check those conditions and then invest, he said.
"In this case, we have to prioritise infrastructure. About 90% of our import-export trade is dependent on seaports and almost all of it is done through Chattogram Port. Although its capacity has been steadily increasing over the last few years, it is still under increasing pressure," he continued.
Mohammad Sirazul Islam mentioned that work is underway on several seaports. Dhaka Airport is being expanded. After that, the crisis in the infrastructure sector will end and FDI will increase, he hopes.
The BIDA executive chairman expressed his firm belief that the government is also considering incentives to bring in FDI during this period.
Chief Executive Officer (CEO) at Standard Chartered Bank Naser Ezaz Bijoy said the way Bangladesh has tackled Covid-19 will create great potential for foreign investment.
"When it comes to investing in Bangladesh, we think of investing in three parties – the East, the West and the Middle East. Since the western countries are shattered by Covid-19's impact, investment from the Middle East is now likely to come. However, due to low oil prices, they will also have a shortage of liquidity," he explained.
He said many European RMGs are trying to come to Bangladesh after withdrawing their focus from China.
There are five things to keep in mind for foreign investment. The economy is one of them where growth, foreign exchange availability, liquidity, and the capital market situation are very important, observed the CEO.
Investors think that regulations here fluctuate a lot, but in case of long-term investment, they have to be given this assurance, he said.
"Growth rate, higher returns and valuation are the three issues that foreign investors seek before entering in emerging markets like us," he added.
Bangladesh Economic Zones Authority (BEZA) Executive Chairman Paban Chowdhury said steps were taken to create a land bank all over Bangladesh.
"We have set up this land bank with more than 50,000 acres of land for the convenience of industrialists all over Bangladesh," he explained.
The largest industrial city in the region is being built on more than 30,000 acres of land, he said, adding that in the last three years alone, more than 6,000 acres of land has been allotted for this industrial city built in the name of Bangabandhu. More than $19 billion has already been invested.
Many local and foreign companies, including Asian Paints, are working there. The amount of foreign investment here is increasing daily. There is huge investment potential around these industrial cities, said Paban.
Head of Chamber of The Lawyers & Jurists Barrister A. M. Masum, FCI Arb said foreign investors invest considering how safe their investment will be. They also consider the ease of doing business.
Mahmud Hossain, the organiser of the discussion, said the plan to increase EDI should be carried out according to the plan.
Bangladesh will be established as an investment-friendly country through the joint efforts of both the government and the private sector, he added.