Delayed impact of global recession, energy crisis slow down investment
September 27, 2009
Investment in the country showed a dismal picture in January-August period as global recession and shortage of electricity and gas discouraged entrepreneurs in taking any decision.
Registration of domestic investment proposals dropped significantly to Tk 126 billion involving 971 projects from Tk 154 billion on 1104 projects in January-August of the last year.
Foreign direct investment (FDI) also dropped by 9.0 per cent to Tk 42.6 billion from Tk 46.9 billion in the last year’s period, according to Board of Investment (BoI) data.
A delayed impact of the global recession has started hurting the economy and it will take some time to recover, said BoI executive chairman Dr S A Samad on Thursday at the launching programme of the World Investment Report 2009.
“FDI will fall if domestic investment drops as foreign investors do not take risk,” he said.
Shortage of power, gas, other utility services and lands are the primary concern of the investors as they hinder the development process in the country, he explained.
He, however, said crisis in utility sector can be an opportunity for the country as the sector may attract billions of dollar, he said.
“In late 90s, the government received proposals worth billions of dollar in energy sector and it resulted in construction of Haripur and meghnaghat power plants where the government did not invest a single penny,” he added.
The country can be a suitable location for sunset industries of Taiwan, Thailand and other Asian countries, Mr Samad said.
“A Japanese chain store has registered with the BoI to set up a composite textile mills with an investment of $300 million very soon, and we have received many inquires from the investors around the world in the last couple of months,” he said.
The BoI chief said a big investment can change the whole scenario and for that Bangladesh has to sell its brand image abroad, he added.
“The country can facilitate export of Indian products through its port, and for that billions of dollars of investment in infrastructure is needed to construct roads, highways and other facilities,” the BoI chief pointed out.
He said the BoI will act as a secretariat when public-private partnership (PPP) programmes go into full swing, but for that it needs to recruit more people.
“The organisation does not have any organogram, and we have to inject fresh blood into the investment agency to promote business climate,” he said.
A professor of Jahangirnagar University Dr M Ismail Hossain in his presentation on the world investment report for 2009 said in the last year the country received FDI worth $1.0 billion for the first time.
Telecommunication sector received the highest FDI worth $641 million followed by banking $141 million and textiles and garments $126 million, he said.
Egypt was the biggest source of the FDI flow with $373 million in the last year as Egyptian telecom company, Banglalink, invested a large amount to develop its infrastructure.
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