Bangladesh is grappling with significant obstacles in attracting foreign direct investment (FDI), including energy limitations, logistical hurdles, and complex regulations, according to industry stakeholders. These challenges have left the country lagging behind its regional counterparts in FDI attraction.
At a seminar titled Japan-Bangladesh Collaboration: Enhancing FDI & Economic Partnership, Iwama Kiminori, Japan’s ambassador to Bangladesh, emphasised the urgency for the interim government to adopt swift reforms to position Bangladesh as a competitive investment destination in comparison to its neighbors and other East Asian countries.
“The interim government has limited time to implement necessary reforms and attract FDI, including investments from Japan,” Kiminori noted during the event, which was organised by the Foreign Investors’ Chamber of Commerce and Industry (FICCI) in collaboration with the Japan External Trade Organization (JETRO), the Japan Chamber of Commerce and Industry Association in Dhaka (JCIAD), and HSBC Bangladesh in Dhaka.
Kiminori highlighted that while he has heard of several positive proposals from the interim government, effective implementation is critical. He pledged Japan’s support for necessary reforms in the country.
Lutfey Siddiqi, special envoy on international affairs to the chief advisor, acknowledged that prolonged inflation has been a stumbling block for foreign investors but expressed optimism about creating a conducive investment environment.
Ashik Chowdhury, executive chairman of the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Economic Zones Authority (BEZA), identified key areas for improvement, including public service quality, industrial consultation, policy consistency, and resource accessibility, all vital for attracting FDI.
Atsushi Hirakuru, president of the JCIAD, reiterated the commitment to sustainable economic growth through collaborative efforts between the two nations. Yuji Ando, country representative of JETRO Bangladesh, provided insights into the increasing interest among Japanese SMEs in expanding operations in Bangladesh. According to a report, 45.5 per cent of Japanese SMEs plan to expand in the next one to two years, with 61.2 per cent identifying Bangladesh as a primary target.
However, Ando pointed out critical issues that need addressing, with 70.8 per cent of respondents unhappy with the current business environment, which calls for improvements in customs clearance, transparency, and local procurement practices. He also highlighted that production costs in Bangladesh are competitive, being roughly 60 per cent lower than in Japan.
Ichiguchi Tomohide, chief representative of JICA Bangladesh, discussed ongoing initiatives aimed at diversifying industries and enhancing the investment climate, particularly through vital infrastructure projects like the Matarbari deep-sea port.
