The New Nation - Internet Edition

A FOREIGN investor who decides to set up an industry in Bangladesh may count on cheap labour to give him an edge over rival producers in other parts of the world. This powerful pull factor should have worked in drawing a far greater foreign direct investments (FDIs) into Bangladesh. But this has not been happening. FDIs have declined very notably in the last two years according to assessments and the same led to a search on the causes. The reasons were pinpointed in several studies and reports issued by donor organisations and foreign investors' bodies respectively.

The factors mentioned are unreliable power, political uncertainty, bureaucratic delaying factors, the high interest rates on borrowing, weak state of the present infrastructures in some areas, inadequate number of new infrastructures, government's fluctuating policies, among others. The point is, this country will not transform into an attractive investment destination till these major stumbling blocks on the path of stepped up investment operations are well addressed. The private sector has little or nothing to do with treating the above conditions which are holding back investments. It is for the government to act quickly and vigorously in relation to each of the factors.

Nothing has been done practically to minimise bureaucracy which is a major disincentive for entrepreneurs. In the realm of energy supply, little of value was done during the last nearly two years to ensure uninterrupted energy for industries and services. The implementation of various schemes for additional power generation and improvement of transmission and distribution capacities are progressing at a snail's pace. Thus, the real improvement of the rate of investment depends crucially on urgent steps taken by the government in response to the factors working against investment, simultaneously in a package.