Is Bangladesh the best place for investment?

It is very encouraging to see our Prime Minister speaking at so many forums during her current visit to the United States. Her statement at the UNGA in Bangla made us proud. We remembered with nostalgia her father Bangobandhu Sheikh Mujibur Rahman's speech in our mother tongue for the first time ever when he spoke there after we became a member of the UN. In her speeches at the UN, she has effectively highlighted the adverse effect that climate is having on all of us due to global warming where we are a frontline nation is being asked by nature to pay the price for the greed and insensitivity of other nations, particularly the developed nations. We felt proud that our Prime Minister was given pride of place at the meeting of delegation heads of peacekeeping nations where she was seated next to the US President.

I am however writing this piece to focus on one issue that the PM has highlighted during this trip, namely seeking foreign direct investment (FDI) for Bangladesh. In a conference on investment held at the Bangladesh Consulate in New York she said, "Bangladesh and only Bangladesh is now the best place for investment." The phrase is a catchy one but the business and investment world is one where catchy expressions seldom bring FDI unless the ground is as attractive.

During AL's 1996-2001 term, Prime Minister Sheikh Hasina had taken the same keen interest for attracting FDI soon after assuming office. I was with her on two of her overseas visits for that purpose. In the first one, taken just two months after she became PM, she addressed an investment seminar in Hong Kong. An international consultant firm named Perigreen was given the responsibility to organise that Seminar. That was the time just before the handover of Hong Kong to the Chinese. Therefore, in the Bangladesh delegation, there was an air of great expectancy that we would be able to attract the attention of investors. Unfortunately, little investment came our way from that effort. In fact, the company that organised that Seminar, Perigreen, was busted a couple of years later.

A year after that trip, the Prime Minister went on an official trip to Japan where she addressed another investment Seminar. In that speech, she reiterated what she had said in Hong Kong. In fact at that Seminar, the Prime Minister said in a part of her speech that the Japanese should follow the South Koreans who at that point was a major investor in our country, little aware that asking the Japanese to follow the South Koreans was not exactly the right way to motivate them to come to Bangladesh.

During the visit of Khaleda Zia as Prime Minister to Japan is 2005, it was more or less a repetition of the same tone; that investors who are waiting to invest in Bangladesh were missing out on a golden opportunity. The interest of the investors in the meetings with both Prime Ministers in Japan was significant. In fact, the interest was more during Khaleda Zia's visit because at that time, the Japanese investors were seriously looking for an investment destination to relocate part of their huge investments in China for reasons of politics. Unfortunately, neither Prime Minister succeeded in bringing to Bangladesh any major FDI flow from Japan.

The reasons are there for everyone to see; only we are not looking. Our Prime Minister was absolutely correct when she said this time in New York that Bangladesh is the best investment destination. But unfortunately, her statement is correct only partly. To motivate investors, she would need to prove a little bit more; in fact a lot more. Let us for a moment see what we have to be an attractive investment destination. First, we have a geographical location that should be the envy of other countries vying for FDI. As a bridge between South Asia and Southeast Asia, we offer investors a foothold from where they can access markets of over two billion people.

As a member of SAARC and BMSTEC, both of whom are committed for free market eventually, there is really no other country that has potentially a better geographical location and potential than Bangladesh. Then we have access to sea. As a country of 160 million people, we offer investors a huge local market. Finally, we offer to investors cheap and intelligent labour in plenty. With all these "too good to be true qualifications" why then are we languishing for FDI having so far failed to draw any significant amount of it? Here is where our Prime Minister needs to do her home work before asking foreign investors to come to Bangladesh. The other day, a University Professor was telling viewers in a TV talk show that when the Singaporeans were seriously seeking FDI, they even took into the equation the drive from the airport to the hotel to motivate investors. Of course before that, they made their airport world class. On both counts, we would be out of the contest as an investment destination even before entering it. Then there is the issue of infrastructure. During the BNP time, we were told that the BoI was a One Stop destination for all the needs of the foreign investor. The Board would grant an investor the land, the electricity, the phone and all other requirements they would need to set up business. I have been told by quite a few Japanese investors with experience in investing in Bangladesh when I was an Ambassador there that that the BoI did all that, of course for a bribe, but when they went to establish their unit with BoI's approval and asked for power, phone and the rest, they were told by these departments that they did not work under the BoI and thus they would have to apply to them again and of course with the necessary additional bribes! All these points were highlighted by the Japanese Ambassador in Dhaka at that time in a confidential letter to the PMO that was leaked to the press. There was at that time another major obstacle to FDI concerning our roads that were in pitiable condition. They have not improved a bit since.

Then of course there is the issue of politics. Added to all the mentioned negative points, our politics has stood in the way of attracting FDI as a major obstacle. The over indulgence with hartal by the two mainstream parties has seriously damaged our prospects as an investment destination. Investors give top priority to a country's political stability. They are not concerned whether this is achieved by democratic or any other means. They are not even the least bit inclined to spare a cent for assisting a country's democratic aspirations if it does not bring two cents for them. Then there is of course the curse of corruption that is anathema to attracting investment. One complaint I heard from Japanese investors was that our bureaucrats take bribes but do not deliver.

FDI can change the face of a country in two to three decades, as it did to China and Malaysia. They attracted FDI by changing laws, rules and regulations. On paper, we have done pretty much the same. On the ground, it is a different story. Those who deal with foreign investment in Bangladesh feel that foreign investors are to be fleeced and often make unreasonable demands and most often do not deliver. There has to be a sea change in their mindset. But the most important change that must come is in our politics where there has to be bipartisanship in attracting FDI. Political conflicts have to come out of the streets and into the accepted institutions such as the parliament. The exact word the Prime Minister used in her New York address was: "Bangladesh and only Bangladesh is now the best place for investment." This was a very tall claim. She now owes it to herself and the nation to deliver.