The government has outlined a plan of action to woo foreign investment to boost the country’s investment in the face of sluggish investment climate caused by the corona pandemic.
As part of the new action plan, the government-formed Investment taskforce has put forward 19 new recommendations for retaining existing investors, rebuilding investors’ confidence and attracting new investors.Investment Taskforce and Bangladesh Investment Development Authority (BIDA) have made the recommendations in a report.
“Pandemic might have disrupted many investment opportunities but it has also opened up many horizons for emerging investment. Bangladesh has to promptly analyze the actions taken by the competitor countries for devising strategy by counteracting and seizing the impacts of the pandemic and supersede other countries in attracting and increasing FDI,” said the report.
The report also mentioned that rising protectionism and shifting preferences are the biggest challenges for FDI outflow. A set of recommendations were made in stakeholder consultations since lockdown. Execution of the recommendations will be significantly decisive for attracting FDI, the report added.
After a series of meeting with different stakeholders including foreign agencies, ministries, investment authority; investment taskforce, the report emphasized cashless society, increasing port facilities, waiving penalties, reducing taxes, increasing warehouse facilities, abolishing mandatory wage hike and consistency of equal policy.
The report said that all ports should be equipped with advanced equipment. One-stop online processes should be introduced to reduce lead time and cost.“Corporate taxes can be reduced to recover the loss. Supplementary duties on imports can temporarily be waived and tax holidays can be extended,” said the report.
The report also stressed for equal regulatory treatment for local and foreign investors and abolishing mandatory wage hike even in EPZ.
Recommending for ensuring cashless payment system, the report said processes related to project office opening, telegraphic transfer, LC payments, have to be digitized for smooth, trouble-free and prompt G2B services.
“Neighboring countries are offering more incentives to investors which are affecting business in Bangladesh. It is required to enhance the competitiveness of Bangladesh compared to neighbouring economies such as Vietnam and India by relaxing regulatory requirements,” the report cited in its recommendations.
The report also suggested reviewing policy with a long term vision and mission to attract FDI, as frequent changes in policy affect the country’s image.
“It is quite difficult to persuade investors to come to our country instead of going to other countries. If we do not offer better fiscal and non-fiscal incentives of better investment environment, there is a lesser chance to attract investors in bulk numbers and in big projects”, reads the report.
The Executive Director of the Policy Research Institute (PRI) Dr Ahsan H. Mansur said foreign investment cannot be attracted only by providing incentives rather addressing the major problems.
Developing infrastructure, introducing state-of-art technology to increase the port capacity, and regulatory transparency can play a major role in attracting FDI, he added.
Along with the recommendations, the report found some major challenges for retaining and increasing FDI such as fall in firm productivity, lack of infrastructure, and regulatory unpredictability.
Bangladesh needs to prepare a benchmark of its investment climate in the context of corona pandemic for attracting FDI more competitively.
The report also asked the concerned authorities to prepare a list of prospective countries and initiate targeted roadshows, fairs, seminar and other mechanisms. Bilateral relations with such prospective countries like Singapore, China, Hong Kong, South Korea, and Japan should be considered.
It is mentionable the government formed a seven-member task force to prepare a report by designing a strategy to attract investment.