Bangladesh seeks $100 billion in foreign investment in diversified sectors from apparel to healthcare and logistics on the strength adequate development and a conducive investment ecosystem.
Speakers on the second day of three days Bangladesh Business Summit 2023 organized by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) highlighted that a huge domestic market of 170 million and access to regional market markets of 1 billion make Bangladesh a viable investment destination.
They pointed out that the government is working on establishing 100 economic zones by 2030. The Matarbari deep-sea port, once completed in 2026, would be the real game-changer, said Salman F Rahman, private industry and investment adviser to Prime Minister Sheikh Hasina, told the session.
He highlighted numerous other infrastructure, rail, and power projects that would bring hi-tech investments other than apparel. Prime Minister’s Principal Secretary Mohammad Tofazzel Hossain Miah explained Bangladesh’s dream to become the “next manufacturing and digital hub in Asia.”
Bangladesh is accelerating its GDP growth by at least 100 basis points every decade with the help of the policies for deregulations, greater economic liberalization, and trade integration, Miah said.
To ease business and red tape, 150 services of 34 agencies are being identified for process simplification. Once completed, clients will be able to receive these services from a single point.
According to Salman’s presentation, of the $100 billion investment opportunities in Bangladesh, $25 billion can be invested in infrastructure, over $14 billion in green investments, $24 billion in PPP investment, and $15 billion in logistics. Additionally, there is a strong appetite for foreign investments in various other sectors, including apparel industries, healthcare, the digital economy, and more.
State Minister for Foreign Affairs Shahriar Alam said Bangladesh has also made significant improvements in sustainability, said the state minister. Currently, 67 of the top 100 green textile factories are located in Bangladesh.
The attractive geographic location of Bangladesh enables companies secure access to the Asia Pacific market of 290 crores (2.9 billion) people who spend $8.53 trillion a year. The country has GSP facilities in 38 countries – including 28 in the EU, Australia, Canada, Japan, New Zealand, Norway, Russia, Switzerland, and Turkey. In addition to Europe and the USA, Bangladesh has preferential trade access in both the Chinese and Indian markets.
The country is going to be the ninth-largest consumer market by 2031, according to HSBC. Bangladesh also offers a significant advantage in terms of cheap labor. The country has bilateral investment treaties with 32 countries, and double taxation avoidance treaties with 28 countries; investment here is protected by the laws against nationalization and expropriation, while it allows 100 percent foreign ownership in almost every sector.
Calling Bangladesh the next China in his book a few years back, Jong Won Kim, the Director General of the Green Growth Department at the Korea Trade-Investment Promotion Agency, said Bangladesh is going to be a manufacturing hub.
He said Korean companies which missed the investment opportunities in Vietnam earlier and are looking to relocate factories from China or from somewhere else should consider investing in Bangladesh.
In a video message, Yasutoshi Nishimura, the Minister of Economy, Trade and Industry of Japan, revealed that approximately 70 percent of Japanese companies operating in Bangladesh are keen to expand their investment by establishing one to two more units.
The UK’s Indo-Pacific Minister, Anne-Marie Trevelyan, anticipates increased British investment in higher education and financial services sectors.
Bjarke Mikkelsen, CEO of Daraz, noted that investing in Bangladesh has become more predictable, whereas a decade ago, it was akin to gambling.
Khalid Quadir, the founding managing partner of Brummer & Partners (Bangladesh), said Bangladesh can be the mini-China as it can attract foreign investors due to having cheap labor.
He said the global private capital market size is $8 trillion, of which 20% is allocated to emerging countries. But Bangladesh is still not focusing on the private capital market and running after traditional funding from multilateral donors like the World Bank and the IMF.
Still, infrastructure, red tape and corruption, poor immigration and customs, and lack of skilled labor are the main challenges investors pointed out at different sessions of the summit.
Takeshi Mamiya, Managing Executive Officer of Marubeni ASEAN Pet. Ltd, presented a paper at a session where he said Bangladesh is set to graduate from LDC status by 2026, and entering into the Economic Partnership Agreement (EPA) with Japan is crucial for the continued development of its textile industry.
“Attracting FDI is the common goal of most countries in order to create local employment and economic growth; however, it is not something achievable overnight,” he said.
Arif Khan, vice chairman of Shanta Asset Management, said foreign investors are not willing to come because they want a predictable policy for at least five years about remitting money, stable exchange rate and interest rate.
Bangladesh next manufacturing hub
