Despite Bangladesh's aspirations to become economically prosperous, the country has always lagged behind its neighbors in attracting FDI even though its FDI is currently only 0.4% of GDP, lower than much higher than the global average of 1.7%.
The Atlantic Council emphasized the urgent need for reforms to increase investment freedom and attract more foreign capital.
With a large, young workforce and a strategic location in the Asian region, Bangladesh has the potential to become a major FDI attraction center. This potential can be unleashed by addressing bureaucratic and infrastructural barriers and checking corruption. FDI decisions in 2022 are significantly influenced by three factors: security, property rights, bureaucracy and corruption.
The thinktank has drawn attention to a changing trend in global FDI known as “friendship networking,” in which countries prefer economic cooperation with trusted allies over geopolitical rivals. . Bangladesh, with its growing manufacturing sector and strategic location, is poised to benefit from this trend. However, significant investment in transport, energy, logistics and skills development is needed to take advantage of this opportunity.
Analysis by the Atlantic Council shows that FDI decisions are heavily influenced by security, ownership rights and bureaucratic efficiency. In Bangladesh, property rights have stagnated, hindering long-term investments and entrepreneurial efforts.
Therefore, the report recommended improving the land registration and granting system to create a favorable environment for investment.
Furthermore, the data shows a strong correlation between investment freedom and FDI flows, and countries with higher economic freedom tend to attract higher levels of FDI per capita.
However, despite Bangladesh's progress in investment and trade freedom, overall economic freedom has declined in recent years, requiring new efforts to restore trade policies. and investment.
Fiber2 Fashion News Desk (DR)
