Bangladesh holds potential to attract huge FDI: ICCB

Bangladesh can attract huge foreign direct investment if the country can implement major infrastructure projects in time and government agencies become more proactive, said the International Chamber of Commerce-Bangladesh or ICCB.

"With the timely implementation of various projects, Bangladesh will definitely be able to attract more FDIs in the near future," the chamber said in its News Bulletin (July-September). 

The government agencies have to be more vibrant and proactive in order to attract FDI, it said.

The recent merger of the Board of Investment and the Privatisation Commission into one single body -- the Bangladesh Investment Development Authority -- hopefully will be able to provide "One Stop" service in real sense to attract FDI, said the chamber.

To achieve the goal of middle-income country status by 2021, accelerate inclusive growth and reduce poverty and income inequality, Bangladesh will require a substantial increase in yearly investments to 34.4 percent of GDP by 2019-20 from 29 percent in 2014-15.

More than $11 billion in external resources will be needed for public sector investment.

"For its strategic location Bangladesh has huge potential to attract more foreign direct investment as the central point of eastern part of South Asia, being a connector between South and East Asia."

The government has given priority to 10 fast-track mega projects in fiscal 2016-17 and allocated Tk 18,727 crore for eight out of the projects. In the first quarter of 2016-17, many fast-track projects have attracted foreign investment.

Three major economies in the region -- China, Japan and India --proposed to make huge investment, mainly in infrastructure development including energy.

The Asian Development Bank announced a $1.5 billion fund to build a key train line from Dohazari in Chittagong to Cox's Bazar. The new railroad is part of the Trans-Asia Railway network and will improve Bangladesh's access to Myanmar and beyond.

China Rail Group has signed a contract for the Padma rail link project. DP Rail, a British company, has proposed to invest $7.5 billion in the Dhaka-Payra seaport rail link project.

"The rail link between Dhaka and Payra is crucial, as the government plans to build it as the main seaport of the country by 2022," said the ICCB.

The chamber said in the last seven years $8 billion was invested in the power sector in public-private partnerships, and another $13 billion are in the pipeline. The investment has resulted in access to electricity for nearly 80 percent of the population.

"But still there are unlimited opportunities of investment in the power sector, as we will need to generate some 24,000 MW power by 2021."

The chamber said Bangladesh economy is moving on a stable path, despite external and internal challenges.

The country is among the top 12 developing countries which achieved 6 plus percent growth in 2016. Bangladesh's economy grew 7.11 percent in the last fiscal year. 

By any standards, Bangladesh economy is doing well and expected to achieve above 7 percent in the current fiscal year, according to the ICCB.