Investment climate again

This time the observation has come from the head of the Japan-Bangladesh Joint Committee for Commerce and Economic Cooperation, and contemplates specifically investment from Japan, but his larger point holds true for all those, both foreign and Bangladeshi, who wish to invest money in the country only to find the political and governance climate unfavourable.

In the Japanese context, due to tensions between Japan and China, Japanese investors are looking to diversify their investments to other Asian countries, and Bangladesh is seen as a prime candidate. In many ways, we are a potentially attractive destination for investors. The Japanese are enthused about our low labour costs, potential to benefit from quota-free access to the EU, and our two governments sharing good relations.

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In addition, due to Japanese courting of Bangladeshi support for their bid for a permanent place on the UN Security Council, Japan is very interested in even better mutual relations.

However, there remain significant problems. Some of these have to do with the political instability. It is only natural that foreign investors would be discomfited by hartals and the fact that contracts have been cancelled upon change of government. One such incident mentioned was the DAP-2 deal, signed during the AL tenure, and cancelled by the current administration.

The other main problem cited is corruption in the system, which takes the form of tender manipulation, and the government's lack of emphasis on developing infrastructure and setting out a complete and focused trade and investment policy. This is a reasonable point. Investors can see that there is no focus on how policies are pursued and money is spent by the government. This ad hoc approach to governance is no good. What is needed is a cohesive and coherent policy.

Now is a good opportunity for Bangladesh. Investors are starting to come in. But we need to stabilise politically, albeit along bipartisan lines, and the government needs to clean up the investment climate if we wish the trend to take hold. The most important need is a unified policy tied to a vision of where the country is heading. The lack of focus in our policy-making is a big part of what is holding us back.