The New Nation - Internet Edition

IT comes as rather worrying news that foreign direct investment (FDI) into Bangladesh that had been otherwise showing slow but steady uptrends in the present decade declined by some 16 per cent in 2007. The flow of FDI was no better in 2008. The slowdown in the FDI flow may have been caused by multiple reasons. The new government should take stock of the situation and identify the main factors discouraging foreign investment. Such assessment would surely point to the insufficiency as the main disincentive. Foreign investors not only must have assurances of good energy supply by the time their enterprises aim to go into operation.

The caretaker government has done some good work in the last two years in the sense that some 1,000 mw of power would be added to the national grid by June of the present year from the coming into operation of a number of small power plants which are at different stages of installation. So, the new government will not face a major power crisis in its first year. But it must get down to work to establish some big power plants at the fastest.

The potential foreign investors must get assurance of expanding energy supply. Thus, the government must gird up its loins and go all out to improve the supply of energy. Doing of this can be the best stimulus for FDI and even local investment. The government also will have to create confidence among investors that they are willing to sincerely contribute towards a stable political environment. Foreign investments are attracted when relevant authorities remain engaged in maintaining the optimum performance of key infrastructures such as ports and roads and there is greater and diverse infrastructure building activities to facilitate investment.