Govt bets on local investors amid global headwinds: BIDA

Bangladesh is shifting its investment strategy towards domestic investors as geopolitical tensions and global economic uncertainty continue to dampen foreign investment flows, according to the country’s top investment promotion official.

Speaking to reporters at a workshop titled “Bangladesh’s Investment Flows and Investment Facilitation”, organised by the Bangladesh Investment Development Authority (BIDA), Executive Chairman Chowdhury Ashik Mahmud Bin Harun said the government is placing greater emphasis on local investment while continuing efforts to improve the country’s business environment.

The move comes as global investment sentiment remains subdued amid ongoing conflicts, volatile energy prices and heightened uncertainty in international markets.

“We are focusing more on Bangladesh rather than looking outside Bangladesh at this moment,” Ashik said, noting that global investors are increasingly delaying investment decisions until geopolitical risks ease.

The BIDA chief said government efforts to attract foreign investment have yielded some positive results, citing a roughly 40% increase in foreign direct investment (FDI) and a rise in gross investment following the investment summit held earlier this year. 

However, he acknowledged that many investment commitments are taking longer than expected to materialise.

According to him, the investment pipeline generated from the summit was initially expected to translate into projects more quickly. 

However, political uncertainty over the election timeline, coupled with renewed global conflicts and concerns about oil prices, has prompted many investors to adopt a wait-and-see approach.

“Until the current geopolitical situation improves, global investment activity is likely to remain weak,” he said.

Against this backdrop, BIDA is prioritising domestic investment and exploring ways to unlock value from underutilised state-owned and closed industrial assets through privatisation and monetisation initiatives.

Ashik also highlighted persistent structural challenges affecting Bangladesh’s investment climate, particularly delays in obtaining licences and regulatory approvals. 

He said investors often spend months dealing with multiple government agencies before being able to start operations.

To address these bottlenecks, BIDA is pursuing an ambitious digitalisation agenda aimed at streamlining investment-related services and reducing approval times.

“We cannot improve service quality without digitalising the system and monitoring service standards,” he said.

The agency is working to bring a range of licensing and approval services under a centralised framework and hopes to introduce visible changes within the next three months.  The goal is to reduce the time required for key approvals from several months to a matter of days.

Ashik stressed that the country’s challenge is not necessarily the absence of laws or incentives but inconsistencies in implementation.   He argued that policy predictability and regulatory clarity matter more to investors than generous incentive packages.

“Our incentive schemes are broadly comparable with those offered by competing economies in the region,” he said. “The problem arises when investors interpret a policy one way and implementing agencies interpret it differently.”

He added that ensuring consistency in policy implementation and maintaining long-term certainty for investors would be critical to sustaining investment growth. On environmental concerns, the BIDA chairman said Bangladesh’s regulatory framework is broadly aligned with international standards, but enforcement remains a challenge. 

He argued that digitalisation and greater transparency would improve compliance and reduce opportunities for discretionary decision-making.