The New Nation - Internet Edition

Staff Reporter

Japan External Trade Organization (JETRO) identified that cost of investment in Bangladesh increased nominally last year.

A survey conducted by JETRO found that all the cost-components have switched to 2.45 from 2.44 of 17th survey of last year.

JETRO conducted the 18th survey during January this year like the previous one based on 32 cost-components gathered from 30 countries through questionnaire using its overseas office.

The cost-components include wages, plot of industrial estate, office space, telecommunication both land and mobile, internet connectivity, utilities covering electricity, water and gas, container transportation, energy covering gasoline an diesel and tax covering personal, corporate, Vat, interest and dividend remitted to Japan.

During the survey period it was found that the maximum corporate tax for non-listed companies in Bangladesh was 40 per cent highest among all the participating 30 countries. JETRO said introducing 2008-09 budget the government has reduced corporate tax to 37.5 per cent which will help to competitive edge to some extent.

However, it said, Bangladesh is still holding the second highest position in terms of this particular cost component of investment among the Asian nations who are also welcoming foreign investment.

"For coveted Foreign Direct Investment (FDI), Bangladesh ought to monitor closely the change of cost-components in other countries and has to carry on its endeavour to realise greater competitive edge by adjusting to cost," it said.

"To be more competitive, immediate attention should be given to the cost components that still remain less competitive to various extent especially container transportation, land price of industrial estate, initial internet connection fee, monthly basic internet connection fee, telephone installation fee, mobile phone subscription fee and corporate income tax."

The survey found that Bangladesh is the most expensive country in case of container transportation from Chittagong Port to Yokohama Port.

It said it is also necessary for Bangladesh to address and eliminate the impediments that are responsible for cost of investment.

For attracting coveted FDI Bangladesh needs to take necessary measures to listen to the opinions of existing investors and assess their level of satisfaction. Many countries used to conduct survey among the foreign investors with the objective to assess accurately the degree of their satisfaction and then try to undertake the possible measures on the basis of the outcome of the assessment.

"Government has to ensure proper care of the existing foreign investors to attract more investment."

The survey said, "Without having any exception from their views of last year, existing Japanese investors feel that hidden costs still remain one of the key elements for the escalation of cost of investment which is making Bangladesh less attractive to both existing and prospective Japanese investors."

"Comprehensive one stop service, poor law and order situation, delay in the settlement of L/C payment, sudden changes in government policies, inadequate infrastructure facilities, unethical business practices, delay in paper processing and political instabilities need urgent attention and continuous monitoring from the government to reduce the hidden cost," JETRO said.

JETRO urged for a more crystal clear government policies in case of attracting more foreign investment. "If the interpretation of the policies contradicts the practice in reality, there is a high probability to lose prospective investors," it added.

It said, the separate presence of each investment agencies without unified government strategy is making the Japanese investors confused to a great extent.