BIDA fails to attract foreign investment, flashy English presentations offer no real solutions

Economic Desk

Despite the change in the country’s political landscape after the July riots, there has been no promising progress in investment and employment in the past year and a half. The Bangladesh Investment Development Authority (BIDA) said it will take more time to reap the benefits of the recent investment summit.

After the political change, Dr. Yunus took power on August 8, 2024. Then, from April 7 to 10 of last year, BIDA Executive Chairman Ashiq Chowdhury, a British citizen, expressed his excitement by organizing a foreign investment conference with much fanfare.

He said at the time, “We have tried our best to hold a summit of global standards.” The government was not the only organizer of the summit. The media community, private sector, embassies, foreign partners, political parties, and other government agencies all actively participated. We will try to do better in the future, God willing. We are very optimistic about the response we have received.”

Ashiq Chowdhury has shown the media his dream of foreign investment worth thousands of crores of taka in connection with the conference. He has done various things to brand Bangladesh, even parajumped from a plane, and there is a lot of media hype about all this. But in the end, the results are zero.

This conference had already generated extensive discussions about investment and employment across the country. The fact that the interim government organized such an international-standard conference at a cost of only 5 crore taka has also received a positive response from the public. Although investment proposals worth about 3,100 crore taka were received from the conference, no significant new investment proposals have been received since then.

Pictures of some unknown foreign nationals who were presented at the investment conference were circulated on social media. No information was available about their investment capacity, and even a few others were seen who had occupied seats at the conference disguised as foreigners, although they were completely Bangladeshi. Along with this, Ashiq Chowdhury’s presentation in English and the link to download it were widely trolled.

Meanwhile, fiscal year-wise calculations show that the number of domestic and foreign investment proposal registrations at BIDA in the 2024-25 fiscal year has decreased by 58 percent compared to the previous year. This downward trend still continues. However, BIDA claims that it is necessary to wait longer to get the actual results of the conference.

According to analysts, a large portion of industrialists and domestic and foreign investors are now looking towards the national elections.

According to the information, after taking charge as the executive chairman of BIDA in September 2024, British citizen Chaudhry Ashiq Mahmud bin Harun visited several countries including the United States, Japan, the United Kingdom, Qatar, China, Malaysia, Turkey and South Korea. Among them, in the 2024-25 fiscal year, he visited the United States, Japan, the United Kingdom and Qatar.

However, there was no investment from Qatar and net FDI from the UK fell by 40.71 percent. At the same time, more money was repatriated than the amount of investment from the US.

In addition, the number of investment proposal registrations from Japan and the United Kingdom in the current fiscal year has also decreased compared to the previous year. No new investment proposals were registered from Qatar.

According to BIDA data, a total of Tk 66,570 crore worth of domestic and foreign investment proposals were registered in the country’s private sector in the fiscal year 2024-25, which is 58 percent less than the previous fiscal year. At the same time, the number of proposed projects has also decreased.

Analysts say the interim government’s priority should have been to remove the main obstacles to investment, rather than hoping for big changes overnight or increasing publicity. In reality, that hasn’t happened.

Although the one-stop service has been talked about many times, its effective implementation at the field level is not there. Gas and electricity crisis is still evident. Regular load shedding is going on in the current winter season, there is a gas crisis. As a result, there has been no positive change in employment. On the contrary, after August 5, 2024, about 10 million people have become unemployed again.

According to the Bangladesh Bureau of Statistics (BBS), the country’s gross domestic product (GDP) in the current fiscal year is around Tk 55 lakh crore. However, the registration or investment interest in domestic and foreign investment is limited to only Tk 1 to 1.5 lakh crore, which is only 2 to 3 percent of the total GDP.

In reality, due to service delays, fuel shortages and logistical complications, actual investment has fallen to half or even less than the registered amount. The investment situation has not improved due to the inability to break out of the long-standing bureaucratic complexities, corruption and incompetence. In addition, the crisis of investor confidence has deepened in the absence of a political government.

China is one of the largest investors in Bangladesh in terms of FDI stock. In March last year, the chief advisor visited Beijing and many Chinese investors attended an investment conference held in Dhaka the following month.

Then in July, BIDA’s executive chairman went to China and called for investment in the power, textile and IT sectors at the Bangladesh-China Investment Seminar held in Shanghai. Although there was interest and commitment, they did not materialize. As a result, the registration of new investment proposals from China fell by 89 percent in the last fiscal year and net FDI inflows fell by 3.3 percent.

In this regard, BIDA Chairman Chowdhury Ashiq Mahmud Bin Harun said, “Foreign investment does not come to any country overnight. It takes time to create an investment-friendly environment. The same applies to Bangladesh. More time must be given to get the results of the investment conference.”

According to country-wise investment proposal statistics, China, Japan, Singapore, Saudi Arabia and Germany were at the top in the 2023-24 fiscal year, but in the 2024-25 fiscal year, no one except China is in the top five. In the last fiscal year, the highest investment proposal worth Tk 1,820 crore came from South Korea.

Then came Tk 6.2 billion from China, compared to Tk 5,730 billion the previous year. Investment proposals of Tk 4.1 billion came from the United States, Tk 3.1 billion from the United Arab Emirates, and Tk 2.2 billion from Hong Kong.

Dr. Zahid Hossain, former chief economist at the World Bank’s Dhaka office, said that the decline in investment proposals in the last fiscal year was expected because Bangladesh was going through a period of transition. Investors are naturally cautious in such a situation. Investment has not come, but rather has decreased, as long-standing infrastructural and policy problems have not been resolved.

However, he believes that if stability is maintained under the elected government, there is a possibility of improvement in the investment situation in the future.