Even before the deadly Covid-19 pandemic devastated Bangladesh's industry and service sectors, local and foreign investments were witnessing a significant slump.

During the January-March period this year, proposed investments had dropped below two-thirds of that in the previous quarter.

Foreign and domestic investment proposals had dropped by 37.21 percent in the first quarter of the current year, compared to the last quarter of the previous year.

As the pandemic shock caused unemployment to increase, the government started giving more emphasis on boosting employment opportunities by increasing foreign investments. However, the proposed investments are not reflecting this initiative.

Speaking to The Business Standard, Bangladesh Investment Development Authority (BIDA) officials said the country's economy had been experiencing a slowdown since the beginning of the previous fiscal year.

Several sectors such as exports, imports and private sector credit growth were on the decline even before the coronavirus pandemic started spreading. These issues have negatively impacted the investment proposals.

Local investors had mostly lost interest before the outbreak began in Bangladesh. The situation regarding foreign investments was somewhat satisfactory during January this year, despite the Covid-19 outbreak being identified in China at that time.

But the situation steadily worsened as the months passed.

After March, BIDA officials became concerned over the possibility of local and foreign investment proposals dropping by more than 50 percent in the April-June period, compared to the January-March period, because of the onslaught of the global Covid-19 threat.

To tackle the ongoing situation, BIDA officials suggested easing bureaucratic red tape and providing incentives in a bid to increase employment opportunities by boosting investment.

BIDA is working on the issue, but tangible progress is minimal due to the disinterest of other state-owned organisations, they claimed.

The prime minister's Private Industry and Investment Adviser Salman F Rahman recently at a programme said, "The Covid-19 pandemic is causing the unemployment rate to go up in the country. Many companies are sacking workers, and some have shut down.

"Under the circumstances, the only way ahead for us is to create new employment opportunities by attracting more foreign investments. Besides, we must ensure One Stop Services to improve the ease of doing business."

Urging the authorities concerned to launch initiatives in this regard as soon as possible, Salman F Rahman said, "We spend too much time holding meetings, and when we make a decision, the train has already left the station."

Shafiul Islam Mohiuddin, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told The Business Standard, "The whole world was suffering from an economic slowdown during the previous fiscal year.

"In August last year, the export earnings started to drop in various sectors, including the readymade garment sector. In this situation, the demand and capacity of local investors went down, which in turn resulted in decreased investments in the January-March period."

He continued, "The spread of Covid-19 in the country began going up from March, and it turned into a full-fledged outbreak in the following months. Presently, it has become difficult to utilise the investments that came before the outbreak.

"There is a very slim chance that local businessmen will make fresh investments under this situation."

Adding that various countries, including Japan, are now moving investments away from China, Mohiuddin said, "Although Bangladesh is trying to get a piece of that investment, if we fail to get rid of existing barriers in the sector, we might end up losing this opportunity."

A quarterly investment report, signed by BIDA Director Md Zillur Rahman Khan and issued on July 29, read, "In the January-March period this year, investment proposals amounting to Tk17,262 crore were registered in 291 industrial units.

"Meanwhile in the October-December period of 2019, investment proposals amounting to Tk27,494 crore were registered in 319 industrial units."

So, investment proposals in 28 industrial units dropped by Tk10,232 crore in the span of just three months.

According to the BIDA report, local investments dropped at the highest rate in the January-March period. During this three-month period, investment proposals amounting to Tk9,242 crore were registered in 239 industrial units.

Meanwhile, in the October-December period last year, investment proposals amounting to Tk15,832 crore were registered in 257 industrial units. That means, investment proposals from local investors have dropped by 41 percent within just three months.

In January-March of 2019, local investment proposals amounting to Tk14,218 crore were registered. So, compared to that period, local investments have dropped by 35 percent in the January-March period this year.

A BIDA official, on condition of anonymity, said, "When analysing the current scenario of local investments in Bangladesh, we can see that in the span of three months, the number of industrial units decreased by 18, but the amount of investments dropped by Tk6,590 crore.

"The data makes it clear that investors proposed a smaller amount of money in the investment proposals that were registered during the January-March period."

In the same period, 33 foreign direct investments (FDIs) and 19 joint-venture investments were registered, which amounted to Tk8,020 crore.

During the October-December period in the previous year, 62 FDIs and joint-venture investments amounting to Tk11,622 crore were registered. So, foreign investments went down by 31.23 percent in three months.

In the January-March period of the previous year, FDIs and joint-venture investments amounting to Tk8,442 crore were registered. So, compared to that period, foreign investments have dropped by 5 percent in the January-March period this year.

The BIDA report mentions that if the investment proposals registered during the January-March period this year are implemented, 33,810 new employment opportunities will be created in the 291 industrial units.

Of the investments proposals registered, 21 percent were in the service sector, 14 percent in the chemical industry, 7 percent in textile and engineering industries, 5 percent in agricultural industry and the remaining 47 percent in other industries.