Bangladesh: Facilitate FDI in IT, leather, pharmaMonday, June 01, 2015 > 09:11:47
(The Financial Express)
Local businessmen on Saturday urged foreign diplomats to pursue their companies to invest in Bangladesh, considering its incentive package and tax holiday facilities.
But the diplomats stationed in Dhaka identified under-developed infrastructure and short supply of energy as key barriers to increased inflow of foreign direct investment (FDI) in the country.
Both sides exchanged their views at a breakfast meeting on "Bangladesh 2030: Next Billion Dollar Opportunities" in the city, where president of DCCI Hossain Khaled delivered the address of welcome.
The local entrepreneurs said Bangladesh is a competitive investment hub since it has skilled, easily trainable and competitive workforce and the cost of doing business in the country is lower compared with many other countries in Asia.
Bangladesh needs substantial FDI along with local investment to become a middle income country by 2021.
The investment needs to be grown by additional 10 per cent from 28 per cent to 38 per cent of gross domestic product (GDP), they added.
"Bangladesh is set to be the 30th largest economy in the world by 2030. To gain the vision 2030 and double digit growth, the country needs additional 14 per cent investment of GDP," president of DCCI Hossain Khaled said.
President of Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka Syed Nasim Manzur said global leather market is worth $ 215 billion, where the share of Bangladesh is only 0.5 per cent. Leather sector exports last year were $ 1.29 billion, which is 4.2 per cent of the total Bangladesh export earnings.
Almost 95 per cent of country's annual output is exported. Earnings from leather goods and footwear increased exponentially, which now account for 61 per cent of the total sector's export income, he said.
He said that FDI in Bangladesh increased to $ 1.3 billion in 2013 from $ 1.191 billion in 2012.
Mr Manzur said Bangladesh is now exporting leather and leather goods to 53 countries that include China, Japan, Italy, Germany, Spain, the USA, France, UK and others.
He invited foreign investors to invest in the leather sector as the government has identified it as a thrust sector.
First Vice-President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Shafiul Islam Mohiuddin said Bangladesh had a share of 2.56 per cent of readymade garment (RMG) in 2000 and now it is 5.11 per cent. The country had overtaken Turkey and India in 2000.
"If we can increase the share to 8.0 per cent (of $ 650 billion) by 2020 then we can reach $ 52 billion worth export of RMG," he said.
He said 81.16 per cent of the country's export come from RMG that contributes more than 14 per cent to the country's gross domestic product (GDP). Nearly 4.4 million people are now employed in the sector, of which 80 per cent are female.
Managing Director (MD) of Incepta Pharmaceuticals Ltd Abdul Muktadir said Bangladesh will export medicines to almost all the countries within a few years given the quality and their competitive prices.
He said that Bangladesh is almost self-sufficient in medicines and many of its neighbours import significant part of their requirement. The country produces 97 per cent of its demand and imports only 3 per cent. Bangladesh exports medicines to nearly 90 countries of the world.
From July to April (FY 2014-2015) the shipment of medicine was US $ 59.17 million against the expected yearly export of $ 71 million.
He called upon the foreign diplomats to pursue their respective countries' businessmen to invest in the pharmaceutical sector of the country.
Former president of DCCI Abul Kasem Khan said Bangladesh's infrastructure is one of the most underdeveloped in the world, which has been hampering the accelerated economic growth in the country.
He suggested the government give priority to the development of highways, expressways, rail network, deep sea port, SEZ, LNG terminal etc.
"Private sector needs to be engaged under public private partnership (PPP) and other internationally practiced investment models," he said.
President of Bangladesh Ship Builders Association K M Mahmood Ur Rahman said Bangladesh could gain 10 per cent share of $ 400 billion global shipbuilding market.
"Shipbuilding export growth was adversely affected in the face of global recession and other internal factors of relevant shipbuilders leading to non-delivery of some vessels. However, in recent times this has picked up and we expect at least seven to nine per cent growth in the foreseeable future," he said.
President of Bangladesh Software and Information Services (BASIS) Shamim Ahsan said that information technology (IT) sector is a booming one as 65 per cent of Bangladesh's population is young (18-35 years). He invited FDI in information technology (IT) sector as the government offers investment-friendly tax policy.
Senior Vice Chairman of Navana Automobiles Ltd. Saiful Islam said lack of infrastructure and policy are some of the challenges of the automobile sector in the country. He said Bangladesh has full potential to export automobiles as finished goods.
President of International Chamber of Commerce, Bangladesh (ICCB) Mahbubur Rahman called upon the diplomats, especially of Japan, to invest more in Bangladesh.
He urged the foreign diplomats to help invest in Bangladesh by the respective countries' entrepreneurs to fulfil the vision 2021.
Ambassador of the Republic of Korea (ROK) Lee Yun-Young said Bangladesh and Korea could cooperate in the shipbuilding sector.
High Commissioner of Pakistan Shuja Alam said that Bangladesh and Pakistan could cooperate with each other for automobile sector development.
Commerce Minister Tofail Ahmed said due to political turmoil the country might not achieve its export target during the current fiscal year. He, however, said the shipment from the country will surpass last fiscal year's export.
The government set the country's export earnings target at $ 33.20 billion for the fiscal year (FY) 2014-15. The target is 8.85 per cent higher than the target of the FY 2013-14, he stated.
The country's export target was $ 30.50 billion in the last FY.
The commerce minister said in the last FY 2013-14, the country could not achieve a minor portion of the export target because of the political instability across the country. The actual export performance was $ 30.17 billion, he added.