Officials have been asked to target Japan, South Korea, Singapore, China/Hong Kong, the US, and the UK as potential investors
The Bangladesh Investment Development Authority (Bida) has made 19 recommendations, including expanding the tax holiday limit by reducing corporate and supplementary taxes, to increase foreign direct investment (FDI) amid the Covid-19 pandemic.
Other recommendations include creating a cashless society, increasing port facilities, waiving late payment fines, formulating equal policies for domestic and foreign companies, easing foreign borrowing complexities, digitisation of government service processes to ease import and export, abolishing the annual wage increase tradition at export processing zones (EPZs), expanding bonded warehouse facilities, introducing Dhaka-Tokyo direct flights, removing complexities of existing laws, and adopting long-term policies.
Abul Kasem Khan, chairperson of the Business Initiative Leading Development, described the recommendations as excellent.
"I hope the recommendations will be implemented within a specific deadline based on changes, if required. In addition to the areas identified in the report, tax reform is an important one that also needs attention.
"The Look East policy is important as well. The public-private partnership process needs deeper engagement, and it can attract FDI in infrastructure projects. A public-private sector investment team needs to be formed to do monthly review and monitor progress."
The recommendations were made in a recent report prepared by a Bida task force.
Copies of the report were sent to the Bangladesh Bank, the National Board of Revenue (NBR), the industries ministry, the commerce ministry, the shipping ministry, the labour and employment ministry, and the Financial Institutions Division on 17 January for implementing the recommendations.
A copy was also sent to the principal secretary to the prime minister.
The report said Bangladesh lags significantly behind India, Vietnam, Indonesia, and Cambodia in terms of FDI. Moreover, there are now impacts of the pandemic.
According to the report, six sectors have potential for FDI, including agro-based industries, non-leather and footwear, jute goods and handicrafts, light engineering, hospital and medical equipment, and IT and IT-enabled services (including e-commerce).
In the report, officials have been asked to target Japan, South Korea, Singapore, China/Hong Kong, the US, and the UK as potential investors.
It said road shows, fairs, and seminars can be held in those countries, and bilateral relations with them also need to be strengthened to this end.
Investors face several challenges, including inadequate infrastructure, regulatory unpredictability, constraints over sending money abroad and foreign borrowing, and complexities over taking profits abroad, the report said.
Sources said the task force had been formed under the leadership of Bida member Nabhash Chandra Mandal to attract the investment withdrawn from China in the face of the pandemic and the US-China trade war.
To prepare the report, Bida held meetings with government and non-government organisations, trade bodies, international development partners, and entrepreneurs. It is working in tandem with the United Nations Development Programme to attract FDI.
According to the report, Bangladesh received $2.87 billion in FDI among Asian countries in 2019, the lowest among its competing nations.