FICCI president upbeat on FDI prospects in Bangladesh amid challenges #newage

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The country’s potential to attract foreign direct investment should not be defined by its near-term challenges but should be viewed in the context of its growth prospects, according to Naser Ezaz Bijoy, president of the Foreign Investors’ Chamber of Commerce and Industry (FICCI).

‘I strongly believe that Bangladesh offers a compelling growth story,’ said the FICCI president in an interview in the capital ahead of the celebration as the FICCI turns 60 this year.

Naser Ezaz, also the chief executive officer of Standard Chartered Bank, Bangladesh, noted that the existing large market, space for growth in traditional sectors, and untapped potentials were the basis of the growth prospect.

To ensure maximum returns from the country’s growing market, new foreign investors should follow the path laid by successful foreign companies, overcoming challenges and adhering to transparency and compliance, he said.

His views come at a time when the country is grappling with political violence ahead of the next general election, scheduled for January 7, against the backdrop of sharp economic downturns.

The country’s overall credit ranking has been downgraded by the US credit agency Moody’s, citing the ongoing scarcity of dollars and the decline in foreign exchange reserves to below $20 billion recently from $48 billion in August 2021.

The FICCI president expects that the current political uncertainties will conclude shortly with the holding of a free and fair election, with collaboration from all sides.

Moody’s ranking is not good for the country, said the FICCI president, describing that the public debt-to-GDP ratio is still at a comfortable level due to 80 per cent of loans taken by successive governments at fixed rates.

The government applied for a loan worth $4.7 billion from the International Monetary Fund to tackle the forex reserve shortage.

The country has already received the initial tranche of $468 million in February, while disbursement of the second tranche of $681 million is due next month.

The FICCI president said the International Monetary Fund is expected to disburse the second tranche shortly.

He hopes that the committed funds from the Asian Development Bank and World Bank will be disbursed in the current financial year.

The long-term potential of the country will help the government to keep borrowing from foreign lenders, said the FICCI president, highlighting the country’s economic size, which has grown almost fourfold over the past 12 years.

He said the FICCI has identified three areas as the new growth drivers: agriculture, sustainable finance, and the digital economy.

Giving an example of the Netherlands, which exports agricultural products worth $132 billion on land almost half the size of Bangladesh’s cultivable land, the FICCI president noted that the country’s overall annual agricultural output was $49 billion.

‘This implies that technological improvement is a must in the agriculture sector’, he said, adding that more investments are required for the adaptation to climate change and achieving the Sustainable Development Goals.

Besides, the government should start planning on industries linked to the production of semiconductors, an integral part of the growing digital economy, he added.

According to the FICCI president, a country should give the impression that it will do well in the future, not just for today, as investments are always meant for multiple years.

During the interview, he also highlighted the government’s efforts to improve the business climate, as the country’s ranking on the World Bank’s ease of doing business is 168 among 190 economies.

A ‘one-stop service’ has been established by the Bangladesh Investment Development Authority, which, according to the FICCI president, is all right, but there is a lack of synchronisation elsewhere.

He said there should be improvement in this area.

For full interview, click the link:

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