Tuesday, May 21, 2019 | ePaper

Pvt investment remains stagnant

Move to improve business climate

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Kazi Zahidul Hasan :
The government has undertaken a slew of initiatives to deal with the stagnant state of private investment and to improve business climate.
Experts earlier identified the stagnant private sector investment as one of major challenges for Bangladesh on its way to smooth transition from the LDC status.
 "The government has taken a number of reform measures to unlock investment to grow the local economy and create jobs," Kazi Aminul Islam, Executive Chairman of Bangladesh Investment Development Authority (BIDA), told The New Nation.
The initiatives are institutional and administrative overhaul, tax reform, single digit interest rates, incentive for exporters, eliminate red tape and improve the ease of doing business.
As part of its effort, Kazi Aminul Islam said, the government has already enacted the One-Stop Service Act 2017 to facilitate investment from home and abroad. At the same time, it is establishing special economic zones to attract more foreign investment.
"BIDA has already pushed for a number of tax reform measures to encourage foreign investment," he added.  
Bangladesh received over $28 billion in investment from 45 countries in the last 5 years.
According to the BIDA, the top ten countries that have made the highest amount of investment are: China ($8107 million), the UAE ($7836 million), Saudi Arabia ($2461 million), Singapore ($2261 million), the UK ($1962 million), The Netherlands ($1744 million), the USA ($1219 million), India ($976 million), Thailand ($637 million) and Japan ($384 million).
"We have also engaged with local entrepreneurs and businesses to assess all the possible ways to restore investors' confidence and improve ease of doing business," said Kazi Aminul Islam, adding, "We have had the first  
round talk with the business leaders recently. Similar engagement will have to be done in the days to come to tap potential investment from private sector's entrepreneurs."          
He also said that private sector investment remained stagnant as a result of inadequate infrastructure development and shortcomings in the power and energy sector. But the situation has improved rapidly creating opportunities to boost the private investment further.
"The government is seriously working to revive the current investment cycle to help sustain the economic growth and the country's smooth transition from LDC status," a senior Finance Ministry official told The New Nation yesterday, preferring anonymity.
He said the Ministry of Finance has already directed the revenue board to bring necessary reform in tax measures to promote business confidence as well as local industries.
"The NBR has been asked to review the rates of corporate and personal income tax along with introducing multiple VAT rates for businesses. These new tax measures will be launched from the upcoming fiscal year," he added.  
The finance ministry official further said that the government is also working to fix the piles of bad loans in the country's banking sector and improve governance of the troubled state-run lenders.  
"The Finance Ministry is working on banking reforms and special audit of banks to give a pause on ever-rising non-performing loans. It will expected to bring positive impact on the country's investment climate and improve investors' confidence."
 "We need business-friendly policies to encourage investment and speed up economic activities in the country," said Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI).
He said, the business community has already recommended for necessary policy actions in this regard. "We hope the government will consider demands of the business community to help promote a bright investment climate so that investment and trade can grow in line with the country's long-term vision.     
Commenting on the issue, former Governor of Bangladesh Bank Dr Mohammed Farashuddin said that private-sector investment in terms of GDP ratio remained stuck for years causing concern for the economy.
"The government should engage all-out measures to promote private investment with the view to achieving a higher economic growth and create necessary jobs for the vast number of the country's unemployed population.
In my knowledge, it has already pushed for necessary reform measures to have a better governance and regulatory regime to woo private investment," he added. 

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