Bangladesh will remain the most resilient and continue to attract foreign direct investments (FDI) to live up to its image as a favourite place for global investors, despite the Covid-induced economic downturn.
This inference can be drawn from a new report released by the US Department of State, reports UNB.
The US Department of State released the '2021 Investment Climate Statements' on Wednesday that mentioned Bangladesh's sustained economic growth over the past decade, a large, young, and hard-working workforce, strategic location between the large South and Southeast Asian markets, and the presence of a vibrant private sector.
The government's efforts in Bangladesh to improve the business environment in recent years show promise but implementation has yet to materialise, according to the report that analyses the investment climate in more than 170 global economies that are current or potential markets for US companies.
Bangladesh has made gradual progress in reducing some constraints on investment, including taking steps to better ensure reliable electricity, but inadequate infrastructure, limited financing instruments, bureaucratic delays, lax enforcement of labour laws, and corruption continue to hinder foreign investment, the report stated.
Slow adoption of alternative dispute resolution mechanisms and sluggish judicial processes impede the enforcement of contracts and the resolution of business disputes, as per the report.
Buoyed by a young workforce and a growing consumer base, Bangladesh has enjoyed consistent annual GDP growth of more than six percent over the past decade, with the exception of the Covid-induced economic slowdown in 2020, the report mentioned.
Much of this growth continues to be driven by the ready-made garment (RMG) industry, which exported $28.0 billion of apparel products in FY 2020, and continued remittance inflows, reaching a record $18.2 billion in FY 2020, as per the US report.
However, the country's RMG exports dropped more than 18 percent year-on-year in FY 2020 as Covid depressed the global demand for apparel products.
The government of Bangladesh actively seeks foreign investment in sectors like agri-business, textile, leather goods, light manufacturing, power and energy, electronics, light engineering, information and communications technology (ICT), plastic, healthcare, medical equipment, pharmaceutical, ship building, and infrastructure.
Bangladesh offers a range of investment incentives under its industrial policy and export-oriented growth strategy with few formal distinctions between foreign and domestic private investors, as per the report.
The report, however, highlighted the "diminishing space for the political opposition, undermining judicial independence, and threatening freedom" of the media and NGOs.
Bangladesh continues to host one of the world's largest refugee populations, more than one million Rohingya from Myanmar, in what is expected to be a humanitarian crisis requiring notable financial and political support for years to come.