Bangladesh has been witnessing rapid growth in private sector investment with business-friendly policy support driving massive economic development and
employment generation.The country has become a fertile land for private investment, which has already set the stage for a steady development thrust and the country’s graduation from least developed country to a developing one.
Economists say the country’s future development prospects will largely depend on some emerging sectors like energy, apparel, pharmaceuticals, agriculture and ICT.
They said Bangladesh has proven its capacity in infrastructure development and value creation for foreign investment. The present government is implementing many mega projects, including the Padma Bridge to close the infrastructure gaps and create greater prospects for both local and foreign
Bangladeshi RMG products are now entering the US market sans the generalised system of preferences (GSP) facilities. Furthermore, Bangladeshi apparel manufacturers are exporting RMG products at more competitive prices than ever.
Experts observe that the policy support extended by the present government has enabled and encouraged the private entrepreneurs to invest in mega projects.A steady growth in local investment is attracting foreign firms to invest in Bangladesh, contributing further to industrialisation and economic growth. The country’s power and energy sector saw a rapid growth over the last few years for the business-friendly policy adopted by the government.
Bashundhara Group, one of the largest business conglomerates in Bangladesh, has taken initiatives to set up the country’s largest fuel oil refinery plant at Sitakunda in Chittagong. Once completed, the fuel oil refinery will meet 80 percent of the country’s total demand for energy, Bashundhara officials said.
In Bangladesh, around 100 paper mills, including Bashundhara Paper Mills Limited, have been producing 6-8 lakh tonnes of papers a year. The local paper manufacturers are exporting a wide range of paper and paper products to more than 30 countries after meeting the local demand. Bangladeshi paper products are being exported to India, Myanmar, Nepal, Bhutan, Pakistan, Saudi Arabia, and many Middle East and African countries.
Talking to the daily sun, Bashundhara Group Deputy Managing Director Md Mustafizur Rahman said, “Building on the investment of around Tk 50,000 crore, the paper sector has created jobs for 10 lakh people.”
He said the tremendous development in the paper sector has been possible due to the government’s business-friendly policy. “If the government increases its incentives and facilities, the sector will flourish further,” he added.
Apart from improving the investment climate, private sector investment is also contributing to employment generation, poverty alleviation and GDP growth.
According to global research think-thank, Price Waterhouse Coopers or PwC, Bangladesh has the potential to become the world’s 23rd largest economy by 2050 with the size of the gross domestic product at purchasing power parity at $3,064 billion, overtaking countries such as Netherlands, Australia, Spain, Thailand and Malaysia.
The UK-based organisation also predicts that Bangladesh would be the 28th largest economy by 2030.
In the energy sector, Summit Power has been enlisted in the Singapore Stock which is considered as a major milestone for the country’s private sector in the international arena.
Regarding investment in the private sector, former Bangladesh Bank governor Atiur Rahman said Bangladesh maintains a private sector-led economy which continues to attract investments backed by the business-friendly policy support from the government.
“Government has taken steps to establish 100 economic zones. Once the business hubs start operating, foreign direct investment will be increased and the country will see massive employment generated by the private sector,” Prof Atiur Rahman said while talking to the daily sun on Monday.
Prof Atiur also recommended for forming more flexible business-friendly policy to attract foreign investment, citing the example of Vietnam which is fetching large-scale Chinese investments.
He said the readymade garment industry will lead the economy in next few years along with the energy, ceramic, pharmaceutical, agro-processing and ICT sector.
Bangladesh is the second largest exporter of apparel products.
“Technological adaptation is crucial for the apparel sector to turn this sector into a green industry for continuing the growth momentum,” the former BB governor said.
Dr Atiur said diversified leather and jute products can be a major attraction to the investors.
Bangladesh has also flourished in some others sectors as well. In addition to garment sector, cement, pharmaceuticals, leather and shipbuilding sectors are also adding to the continued diversification of the country’s export basket.
Bangladeshi shipbuilder Western Marine Shipyard aims to export small vessels worth $250 million or over Tk 2,000 crore in the next five years.
Besides, the pharmaceutical sector is bringing new identity for Bangladesh globally. The sector is meeting 97 percent demand of local market and exporting medicine to at least 127 countries across the world.
The demand for Bangladeshi leather and leather products is increasing in the international market. Shoes made in Bangladesh are being exported to Europe and the US markets.
Apart from this, many other industries including plastic industries, shipbuilding, light engineering, electrical equipment, food processing, cosmetics, housing and manufacturing sector are reducing the country’s import dependency.
Policy Research Institute Executive Director Ahsan H Mansur said Bangladesh experienced large-scale public investment amid the expansion of annual development programme, which also encouraged the entrepreneurs to invest in mega projects.
“Foreign direct investment also increased last year as $2.4 billion investment came into the country. However, there are many opportunities to boost the FDI,” Ahsan H Mansur told the daily sun.
Ahsan, a former senior official of the International Monetary Fund, also emphasised on reforms at policy and institutional levels to bring transparency in private sector investment.
“Bangladesh will become developing country naturally within the timeline. We should focus on increasing foreign investment and private sector credit flow to achieve the goal,” Ahsan said, expressing hope that Bangladesh will also graduate from the developing country status within a short period of time riding on a rapid private sector growth.
Bangladesh fetched $800 million from ICT products and services in 2017 which is projected to reach $1 billion by this year and $5 billion by the next four years, according to the estimation of the ICT Division.
Two hi-tech parks, Jessore Sheikh Hasina Software Technology Park and Bangabandhu Hi-tech Park in Gazipur, have already started operating to accelerate growth in the ICT sector.
Bangladeshi tech firm Augmedix provides scribe services to physicians in the US through outsourcing. The Google glass-based firm aims to provide scribe services to 4,000 US physicians by the next two years.
Industry insiders said Bangladesh is an attractive business hub for foreign investors as there is a huge market base of 16 crore people.
Regarding the growth in the ICT sector, ICT State Minister Zunaid Ahmed Palak said the policy support from the government has paved the way for endless prospects of the ICT sector.
“We made remarkable progress in our endeavour, such as - the establishment of Janata Software Technology Park and Jessore Sheikh Hasina Software Technology Park. We are building another 26 hi-tech parks across the country and expanding the Optical Fibre Cable up to the union level through the Info Sarker-3 Project,” ICT State Minister told the daily sun on Monday.
Zunaid Ahmed Palak also informed that the government announced cash incentives and reduced import duty by up to 25 percent for the ICT sector, which encouraged many tech firms to set up manufacturing plants here.
“ICT exports have crossed $800 million from only $26 million in 2008. The number of internet users increased by more than 100 folds in last 9 years. The ICT sector played a crucial role, directly or indirectly, in the process of ensuring the country’s readiness for graduating to the developing country status under the leadership of Prime Minister Sheikh Hasina,” Palak added.
Japanese automobile giant Honda has made its footprint in Bangladesh while Bangladeshi motorcycle Runner is being exported to Nepal.
At least five global mobile brands including Samsung and Xiaomi are expected to set up manufacturing plants in Bangladesh by the end of this year. Bangladeshi electronic brand Walton set up a computer manufacturing plant where 60,000 unit laptops, 30,000 desktops and more 30,000 unit monitors are being produced a month. The company started exporting computers to Nepal and Nigeria.
More than 10 Bangladeshi companies – including REVE Systems, Tiger IT, DataSoft, Dohatec, eGeneration, Southtech – have set up offices in India, Nepal, Bhutan, Malaysia, Japan, UK, US and various African countries.
BASIS President Syed Almas Kabir said around 15 to 20 local companies have expanded their operations to other countries. “They are doing well. Apart from earning foreign currency, they are also brightening the image of Bangladesh. That is a good branding for the country,” he said, adding that some problems still persists when opening offices abroad.
Around 85 percent of the country’s total jobs are attached to the small and medium industries, which is the driving force to eliminate poverty.
The cottage industries have been producing processed food, beverages, textiles and small garments, leather products, wood and furniture, printing, chemical and chemical products, rubber and plastic products, basic metal, electronics glasses, transport equipment, handicrafts, repair factories, honey and salt.
Small and medium-sized industries are also booming in Bangladesh. These include block, screen print industry, jute goods industry; textile industry, leather and doll industry, potteries, metal industry, etc.
Many small industries have been established at the district level and these industries are producing flour, rice, bread, biscuits, cloth bags, bed sheet, cloths jute bad and wooden furniture.