management of foreign trade -...

Management of Foreign Trade

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2.2 Feature of Investment Environment in Bangladesh.

Bangladesh offers conducive investment friendly environment compared to the other South Asian economics. This are listed below:

* Bangladesh is a largely homogenous society with no major internal or external tension and a population with great resilience in the face of adversity (e.g. natural calamities).

* Bangladesh is a liberal democratic country. The people irrespective of race and religion have been living in harmony for years.

* It enjoys broad non-partisan political support for market-oriented reform and offers the most investor-friendly regulatory regime in South Asia.

* Bangladesh owns a trainable, skill, enthusiastic, and hardworking and low-cost (even by regional standards) labor force suitable for any labor-intensive industry.

* Geographical location of the country is ideal for global trades with very convenient access to international sea and air routes. Bangladesh is the bridge between ASEAN and SAARC nations.

* Bangladesh is endowed with abundant supply of natural gas, coal, water and very fertile soil.

* Although Bangla is the official language. English is widely spoken as second language.

* As a result of low per capita income of only US$ 482, present domestic consumption is not significant. However, it may be considered that there exists a middle class with significant purchasing power. As economic growth picks up, the purchasing power will also grow substantially. And in a country of more than 138.8 million people, even a small middle class may constitute a significant market.

* All Bangladeshi products other than armaments enjoy complete duty and quota free access to EU, Japan, Canada, Australia, Norway and most of the developed countries. However, for apparel export to USA, Bangladesh had a quota regime which ended on 1st January 2005. Despite quota phase out, Bangladeshi apparel has successfully taken up a better position in US market and experiencing substantial growth in an even competitive market.

2.6 Industrial Policy Support: An Evolution for FDI in Bangladesh.

The Bengali Nation came in the limelight of world history on 21st February 1952, with its great language movement. After nineteen years of it the world witnessed the emergence of Bangladesh through an all out war of Independence against Pakistan in 1971. This Independence was achieved through enormous sacrifices and losses of the heroic souls of the nation. So the economy of Bangladesh was devastated and the death toll was over 3 millions. The pattern of Industrial ownership and investment policy underwent radical changes since Independence in 1971. However, starting from zero the government of Bangladesh brought fundamental changes in its industrial policy, when it tried to follow the path of socialistic economy. To achieve this objective, Bangladesh not only turned into planned economy


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development, but after the liberation, the government had taken over a large number of abandoned industrial undertakings of the absentee owners and large –scale manufacturing enterprises of Bangladeshi owners. Moreover, as a matter of deliberate policy, through the promulgation of the nationalization order 1972, the Government nationalized all the key industries of the country including Jute, Textiles and cotton, and sugar. As a result the first industries policy which was formulated in January 1973, left the private sector with virtually no other areas to operate except cottage and small industries within the investment ceiling of Tk. 25 lace and maximum 35 lace through reinvestment of profits. Since 1972 till to-date several industrial policies were pursued to develop the Industrial base of Bangladesh.

It is, therefore, appropriate to make a review of the impact of these industrial policies on the inflow of foreign Direct Investment (FDI). The Industrial policy of Bangladesh, toward the inflow of FDI, has been highlighted from time to time within the framework of analysis of the general industrial policy and in the context of the debate regarding the relative roles of the public and private sector in our economy. Gradually, upon the realization that foreign Direct Investment (FDI) is a significant vehicle for capital formation, technological development and skill development, the attitude had been changed and several policy reform measures were initiated over time. Now Bangladesh offers the most liberal treatment to foreign direct Investment (FDI) in South Asia. The foreign direct investment policy regime in Bangladesh has been critically evaluated below.

Foreign direct investment (FDI) policy was determined by the industrial policy of 1972. As enunciated in this policy FDI was allowed only in collaboration with public sector and with a minority equity participation to achieve the objectives of socializing ( i.e. nationalizing ) the country’s means of production. The Government of Bangladesh gave some conditional guarantee of repatriation of capital or compensation. In this industrial policy, foreign direct investments were allowed to enter into partnership with domestic private investors but not exclusively in projects where technological and managerial gap existed. The industrial policy of 1972 was first revised in July 1973 and again in 1975 in consideration of a sharp rise in a prices and costs. The Government of Bangladesh came to recognize the necessity of the private sector in the realm of economic development and in 1974 , additional incentives for foreign direct investment (FDI) were given along with rising of investment ceiling to Tk. 30 millions for private entrepreneurs. Private sectors (both local and foreign ) were allowed to set up industries along with public sector corporations except some basic industries viz., Jute, Cotton, Textile, Sugar and Steel, Ship building and heavy Engineering , Paper and Newsprint, Mineral oil and Gas etc. However, no other specific field of activity was excluded for participation by foreign investors. A number of directives and incentives were given like all activities of foreign collaborations were needed to be approved by the government, full freedom of transfer of annual profits after the payment of taxes was provided for, repatriation of capital spread over a number of years and a minimum dividend of 15% subject to availability of profit were guarantee. Moreover, guarantees were provided that the nationalization would not take place within a period of ten years from the placement of the investment and equitable compensation would be provided in a case of nationalization.

A dramatic shift in the policy of the Government toward foreign direct Investment (FDI) was initiated in December 1975.( after the political change took place in 15th August, 1975). This policy came into effect


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during 1976 when it was found that the reaction of foreign capital was less than enthusiastic. A review of the impact of the policy indicates that the potential foreign investors were worried about the compulsory share of majority participation by the Govt. in the equities of FDI projects. However, a positive response of the FDI to this policy may be the fact that during the tenure of the policy no foreign ventures would be nationalized in the country. Investment ceiling was raised to Tk.100 million and a series of important policy measures were initiated to increase the role of private sectors in the field of industrial development. FDI was permitted in 10 other sectors previously reserved for the public sector enterprises where joint ventures were promised to be given preferential treatment. The assurance of a moratorium on nationalization was totally deleted, as it was feared that any mention of nationalization would inhibit private sectors. By the end of the First Five Years Plan period and on the eve of launching the Two-Year Plan (1978-80) GOB announced further series of policy measures for improving the foreign direct investment environment.

Perhaps a major turning point came in 1976 when for a clearly defined industrial policy encouraging the private investment sectors was made by the Government to accelerate the process of dis-investment of a number of abandoned and taken over industries to those of the former Bangladeshi owners

The most significant change in the industrial policy of Bangladesh however was brought about with announcement of the New Industrial Policy (NIP) in June, 1982. The Government decided to embark on an economic development effort in which the private sector would play a dominant and leading role. The main purpose of the industrial policy of 1982 was to industrialize the country under the new industrial policy. Industries have been grouped in three categories. (i) A small reserved list for public sector investment only. (ii) A concurrent list covering mainly large scale industries where both public and private investment would be allowed , (iii) An Industrial Investment Schedule (IIS) for all industries which are opened for private investment .

The milestone in the foreign investment policy was the enactment of the Foreign Investment Promotion and Protection (FIPP) Act. 1980. The FIPP Act was passed by the parliament to institutionalize its legal framework . The Govt. expressed its commitment to make Bangladesh more attractive for foreign investment including FDI. The provisions of the Act were passed to cover identification of the field where foreign direct investment is acceptable , ensure legal protection to foreign direct investment (FDI) in Bangladesh against nationalization and expropriation, guaranteeing repatriation of capital and return from it, and equitable treatment with local investors with regard to identification, compensation etc.

As an expression of Bangladesh Government’s special drive to attract FDI in line with its environment for export oriented industrialization, The Bangladesh Export Processing Zones Authority Act 1980 was passed in the parliament. This act enacted a legal framework to create Export Processing Zones in the port cities of Chittagong & Khulna and Capital City of Dhaka. The Bangladesh Government also enacted the Bangladesh Private Export Processing Zones Act 1996” allowing setting up of Export Processing Zones in private sector with a view to attracting more foreign direct investment (FDI) in the country .As a result, Korean Export Processing Zone (KEPZ), Rangunia Export Processing Zone (REPZ) Comilla Export Processing Zone and Ishwardi Export Processing Zone (IEPZ), were established privately in Bangladesh. Now a days,. Export Processing Zone (EPZ) have become a continuously inspiring sources of confidence


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for Bangladesh to ensure effectual foreign direct investment (FDI) which is the most important tool for economic emancipation.

In the Revised Industrial policy (RIP) of 1986, the Government liberalized sanctioning procedures and provided major impetus to industrial development by granting increased incentives for foreign direct Investment (FDI) as well as large scale denationalization of industries. The revised industrial policy also attempted to rationalize the policies concerning import, export, incentives, tariff rates, industrial assistance as well as other fiscal incentives and benefits i.e. tax holiday of five years, seven years and nine years for industries to be setup in development areas and least development areas respectively.

The declaration of industrial policy of 1992, aimed at continual relaxation of direct government control on private investment and inflow of FDI. Further, a package incentive was offered to attract the inflow of FDI. Sanctioning procedures have been simplified for and foreign equity is allowed up to 100%. This policy offered the foreigners the right of remittances of pay, allowances and approved royalties including repatriation of capital, profits and dividends. From the above analysis it is clear that the main objective of the policy was to accelerate the foreign direct investment (FDI) and ensure the best use of resources prevailing in private sectors.

The main objective of industrial policy 1999 is to attract foreign direct investment (FDI) in both export oriented and import saving industries to make up the deficient domestic investment resources, and to acquire evolving technology and gain access to export markets. The policy states “foreign direct investment (FDI) will be targeted as an important vehicle of technology transfer, skill development, and promotion of management, and marketing know-how.”

The policy declares the vision of industrial development viz; “Bangladesh will have within a decade, a sizeable industrial sector where manufacturing sector will account for at least 25% of the GDP and at least 20% of the employed work-force.” These indicate a considerable rise from the figure of 10% around which the sector’s in GDP and employed population have hovered for most of the past two decades: A vibrant and dynamic private sector will be the principal actor in the industrial area of Bangladesh. In this policy, private sector investment has been kept open without any ceiling expect reserved sector. Private sector investment both local and foreign direct (FDI) or joint venture between local and foreign or with public sector is allowed. Foreign Direct Investment is specially welcome in export oriented industries in Export Processing Zones (EPZs). Export processing zones enjoy facilities and incentives for FDI. Opportunities for employment of foreign nationals and income tax exemption are offered for a period of three years to foreign technicians.

In industrial policy 2005, which was adopted by the government since 2006, has emphasized to reduce poverty and generate employment opportunities through the establishment of agro-based industries as well as raising agricultural production. Provision has been made to set up small, medium and large industries across the country in order to create employment opportunities beyond the agricultural sector. The industrial policy has also taken provisions for attracting foreign investment. Therefore, necessary steps will be taken to properly utilize the natural and mineral resources of the country. Finally, it can be said that the guideline indicated in the new industrial policy will help expand planned


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industrialization in country. As a result a sound and prospective foundation of economic development will be established. It will contribute for poverty alleviation, create employment opportunities, and decrease unemployment and achieve overall economic growth of the country.

2.7 Strengths Weakness, Opportunities and Threats for inflow of FDI in Bangladesh.

Strengths:

Bangladesh is an emerging nation with few natural resources. Her strengths relating to foreign investment are considered as

1. Abundant supply of the cheapest labor in the region. 2. Easily trained labor force in areas of manufacturing textile, agriculture. 3. Large workforce which have training in managerial and technical skills. 4. Land and power cost’s considered to be some of the lowest in the Asian region. 5. Bangladesh is one of three Asian countries offering 100% unconditional foreign equity. 6. Bangladesh offers a strong incentive program to foreign investors, Tax holydays ranging 7. 5 to12 years. 8. Bangladesh enjoys “Most favored Nation Status” with a number of countries, including UK, USA

& Germany. 9. Bangladesh enjoys “Generalized Status of Preference” (GSP) for favorable export in some of the

countries of the world.

10. Avoidance of double taxation agreements are in place with a number of countries. 11. Legal Protection to all foreign investment is provided by Act of Parliament. Non Commercial

risks of investment are insured by the multilateral Insurance Guarantee Agency (MIGA) 12. Free Convertibility of local Currency. 13. Unconditional repatriation of foreign capital investment along with profits / dividends. 14. Well-established and efficient Export Processing Zone. 15. Large local market potential linked to a small but growing middle class. 16. Substantial port facilities with worldwide linkages. 17. ‘One stop package services’ is given to the foreign investors 18. A huge number of engineers, computer specializes and MBA graduates are available to the

manufacturing sector at competitively cheaper salary & benefits. Weakness:

1. Dependence on imported raw materials.

2. Limited potential to developed industries based on local raw materials and natural resources. 3. Poor transport infrastructure to port. 4. Delays in customs processing and delivery to destination from port, unless location is in an EPZ. 5. Complicated and time- consuming bureaucratic process for telephones , power and

telecommunications output limitations .


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6. Shortage of local operations and shortage of technology has led to limited scope of local entrepreneurial experience.

7. Poor sectorial and industry support information from the board of investment and other bodies.

8. Limited local experience in international business analysis, strategic planning and market research.

Opportunities:

1. An emerging market of 140 millions.

2. Proximity to sizeable export market

3. Strategic location

4. Low cost and productive labour force

5. Favourable tax treatment

6. Favourable regulatory environment

7. Substantial gas and coal reserves

8. Agricultural potentials of fertile soil

9. Extensive coast lines

10. Educated English - speaking youngsters

11. Sophisticated and knowledgeable young and energetic engineers.

12. Professional accountants.

13. Managerial personnel with MBA degrees are available comparatively at lower compensation package.

Threats:

1. Different classic incentives offered by competitors

2. Loosing our foreign market

3. Entrance of new competitors

4. Political instability

5. More lucrative incentives given by the competing countries.

6. Imposition of different types of Tariff and non-tariff complexities by the developed countries for export of product from Bangladesh.


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7. Inconsistency of policy measures taken by the different government.

8. Enlistment of Bangladesh as one of the most corrupted countries of the world for the last seven years.

9. Involvement of most of the Government machineries in corrupt practices.

10. Deteriorated law and order situation.

3 . Competitive Sectors for Investment in Bangladesh

RMG sector:

The phenomenal growth in RMG was experienced in the last decade. In 1984-85, number of Garment factories was 800. At present with about 4000 factories and a workforce of two million, 80% of which are women, employing over 50% of the industrial workforce and having 75% of the total exports earning of the country. Bangladesh is now significant RMG supplier to North America and Europe. Bangladesh RMG sector largely depends on the imported yarns and fabrics. Bangladesh produces only 10% export-quality cloth used by the garments industry. There are enormous opportunities in setting up composite textiles industry combining textile, yarn and garments. RMG and textile sectors have enormous investment opportunities. Government provides highly favorable policy framework for investment in these sectors. Moreover, there is a huge gap between the demand and supply of fabric in the garment sector. This is fulfill by importing from foreign countries.

Spinning Spinning is the first step in textile value chain that adds value to the fibrous substances by converting them into yarn or thread through the processes of drawing. Drop spinning involves the use of a stick with a whorl or weight to stabilize the spinning of the stick (called a spindle). Development of spinning industry in Bangladesh is closely associated with the development of Textile and Clothing (T&C) sector as a whole. Power-driven modern textiles in Bengal were traced back to early twentieth century. In 1972, large-scale manufacturing units including textile mills were nationalized. After 1982, state-owned spinning mills were gradually denationalized. By 1999, spindles installed were 2.8 million (2.4 million in the private sector and 0.4 million in the public sector) with an annual production capacity of 200 million kg. BOI sectoral Survey found that in 2004, about 3.44 millions spindles are producing 382 million kg of yarn for the textile industry.

Frozen Foods The frozen foods export is the second largest export sector of the country. After some initial difficulties in terms of quality achievement, exporters have earned credibility and trustworthiness in the global market. Assurance of reliable and continued product quality is a major challenge in this sector. Technology orientation, marketing perceptions and quality improvement aspects invite foreign investment in this sector. Frozen food sub-sector has credible opportunities in Middle East, EU and North American countries and Far Eastern countries. In 2004-05, total fish production was 22.16 lack metric tons of which 8.82 metric tons were shrimp. At present, there are 868 fish hatcheries and farm of which 2.18 lack hectors of shrimp farm. Foreign investment with appropriate technology in this potential sector has been recognized as most viable area in Bangladesh.


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Leather

Bangladesh leather industry is dominated substantially by the domestic investment, which are mostly export –oriented. Footwear is more important in terms of value addition. This is the growing sector for leather predicts. Presently Bangladesh produces between 2 and 3 percent of the world’s leather market. Foreign direct investment in this sector along with the production of tanning chemicals appears to be highly rewarding. In 2004-05 total export of leather goods was 220.93 million US$ on the other hand it is 257.27 million US$ during 2005-06 FY.

Electronics The electronics industry in Bangladesh mostly produces consumer items v.z. like television, radio, VCD and CD players, refrigerator, air conditioners, oven, electronic fan, blenders etc. are being assembled to a large extent. To ensure the performance reliability, the key challenges in this sector are technical assistance and proper technology orientation of the industry. Developing the significant capacity and skill in assembly and manufacture of a wide range of electronic components and parts is crucial.

Moreover, Bangladesh does not have any telecommunication equipment industry in the private sector. However, an urgent need for diversification and modernization is felt among the existing entrepreneurs, government and professionals. Government is keen to provide and ensure enabling assistance to the development of this sector. Skilled, easily trainable and low-cost human resources are the main cost advantage of setting up electronic industry in Bangladesh In this context, relocation, outward investment and joint venture with Bangladeshi companies could be gainful strategies. To capitalize on the comparative advantages, substantial foreign investment from those countries is highly encouraged.

Agro-Based Industries

Alluvial soil, a year –round frost –free environment, Increased cultivation of vegetables, spices and tropical fruits now grown in Bangladesh could supply raw materials to local agro-processing industries for both domestic and export market. In 2005 –06, Export of agricultural products accounted for about 1.00% of total export amounting US$ 76.24 million .To avail the competitive and comparative advantages, Bangladesh invites progressive agricultural practices, improved marketing technique and modern processing facilities. The government emphasizes development of the agricultural sector through appropriate measures to increase crop sector productivity. To promote agro-based industries and attract investment in this sector, Board of Investment organized “Agri-Invest 2003 Bangladesh” In December 2003.

Information technology

Bangladesh has joined the consortium of SEA-ME-WE –4 submarine cables, which starts its commercial activities from 21st may, 2006. This will especially help prosperous data entry and software sectors. The landing station of this cable is situated at Jhelong in Cox’s bazaar. Unemployed youths can easily engage themselves in those services by taking short-term training. Bangladesh has right to land 15 landing station without charges. It will help smoother operation of E-commerce, E-governance, E-education, and Telemedicine etc. So, there are huge chances of development of ICT sector and finally government will be financially benefited.


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Ceramics

Global ceramic tableware industry is currently going through a phase of acquisition and consolidation, as smaller industries in the developed countries are becoming uncompetitive and bankrupt. As a result, the big names like Noritake, wedge wood; Lenox, Villeroy & Boch and Royal Dolton are all individually becoming billion –dollar operations. Bangladesh, being a gas-rich and low –labor –cost economy, offers to be a strategic partner in production and supply of ceramic products. Investments in this sector are strongly encouraged.

Light Engineering

Light engineering industry in Bangladesh has grown with informal cottage status over the years. This labor-intensive operation produces a diverse range of items having an annual valuation of about US$ 120 million.

Bicycle is one of most important item in light engineering industry. Its role in the world transport system is expanding.

Pharmaceuticals

Considering the overall demand, pharmaceuticals are one of the emerging sectors in Bangladesh. Government offers different incentives for importing raw materials pharmaceutical industries. This particular sector has huge potential of growth in the future. For sustainable return, pharmaceutical sector could be a rational choice.

Jute goods (Diversified Jute products)

Bangladesh is the second largest producer of jute. A substantial amount of foreign exchange (US$300-350) million per year on average is earned by Bangladesh through export of jute products. The International Jute Organization (IJO), in cooperation with national and international research institutions, have developed a number of technologies, processes and products for diversified use of the jute. These are now ready for commercial exploitation. Prospective investors may avail themselves of the opportunity to invest in these projects for which guidance and assistance will be forthcoming from IJO. Feasibility/Viability reports of the projects can be collected from IJO, Dhaka.

Roads, Highway and Bridges

The GOB in consonance with its general policy of liberalization and globalization of country’s economy will welcome private investment in roads, highways and bridge projects. It is hopped that this measure will help improve the existing roads and bridge highways facilities and bring a good opportunity for the private sector investors to take part in implementation of various projects on Build, Operate and Transfer (BOT) basis. In this regard the government has already established Infrastructure Development Company Ltd. for financing infrastructure projects.

Power Generation


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The present government has allowed private investment in power sector from 1996. The Government encourages private foreign investment in power Generation in the form of 100% foreign ownership, joint venture and also on the basis of BOO/BOT principles through various incentives package. The existing power generation capacity is 2600 MW and 4600 MW will be required by 2005. Power generation project of 1200 MW in the private sectors are in the process of implementation. With the increasing growth in industry, commerce and household usage, the demand for electricity in Bangladesh is enormous. It is assumed that the power demand will increase at around 6% per annum in the upcoming years. More private investments will be encouraged to meet the growing demand of the country

Gas and Oil

One of the policies of the government is to involve the private sector in exploration of Gas and Oil through participation of International Oil Company (IOC) under production sharing contract. Private sectors will be involved in exploration, production, transportation and sale. Gas reserve have been estimated at 22.90 TCF of which 13.60 TCF are recoverable. There is bright prospect of private investment in Gas and Oil sector in Bangladesh. Many foreign companies including a British company are involved in oil and gas exploration. CNG is highly efficient, eco-friendly and cost-effective fuelling option for motorized vehicles. It could also make significant cross-savings in the health sector and reduce public health hazard. The increasing demand for maintaining air quality in metropolises like Dhaka has become the nation’s top-most priority. As such, two-stoke petrol fuelled taxies are being replaced with CNG-fuelled taxies. Other vehicles are also being converted to CNG orientation. At present we have 117 CNG filling station and 72 conversion workshops. The number of CNG driven cars has been increasing significantly in Bangladesh. As such steps are taken to set up more CNG filling station with the financial assistance of World Bank. In these circumstances, a huge opportunity for investment in CNG Distribution Network has become imminent.

Tourism

With growing international interest in traveling through Asia, tourism is taking roots in Bangladesh. Bangladesh offers a variety of historically significant and culturally unique sites for tourists. Additional hotel, resort and recreational facilities could be created for attracting tourists from home and abroad.

4.3 Facilities and incentives provided by BOI.

Facilities and incentives provided to investors and Non-Resident of Bangladeshis

i) Investments of NRBs treated at par with FDI and enjoys facilities similar to those of foreign investors

ii) NRBs can buy newly issued shares/ debentures of Bangladeshi Companies


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iii) A quota of 10% has been fixed for NRBs in primary public shares iv) They can maintain foreign currency deposits in the Non-residents Foreign Currency

Deposits (NRFD) account v) On fulfillment of certain conditions “Important Non- Resident Bangladeshi (INRB) is

selected.

Tax exemption on royalties, technical know-how fees received by any foreign collaborator, firm, company and expert.

Tax exemption on the interest on foreign loans under certain conditions. Avoidance of double taxation in case of foreign investors on the basis of bilateral agreements. Exemption of income tax up to 3 years for the foreign technicians employed in industries

specified in the relevant schedule of income tax ordinance. Tax exemption on income of the private sector power generation company for 15 years from

the date of commercial production. Facilities for full repatriation of invested capital, profit & dividend. 6 months multiple entry visa for the prospective new investors. Re-investment of repatriable dividend treated as new investment. Citizenship by investing a minimum of US$ 5,00,000 or by transferring US$ 10,00,000 to any

recognized financial institution (non-repatriable). Permanent resident ship by investing a minimum of US$ 75,000 (non-repartiable). Tax exemption on capital gains from the transfer of shares of public limited companies listed

with a stock exchange. Special facilities and venture capital support will be provided to export-oriented industries

under “Thrust sectors”

4.4 Facilities and incentives provided by BSCIC.

Identification & selection of entrepreneurs; Entrepreneurship development; Project selection for the entrepreneurs on the basis of his education, professional background,

financial solvency and past experience; Preparation of project proposals; Project appraisal (Technical, Financial, Economic and Management); Credit arrangement, and supervision of credits Supervision of project implementation; Infrastructure development and allotment of developed plots to the entrepreneurs. Management and skill development; Design, prototype development and distribution; Research and development; Evolve appropriate production process, adoption and transfer;


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Assist entrepreneurs in quality control and quality improvement; Prepare marketing study and provide marketing assistance (including exports); Initiate integrated programmes through Co-ordination with other agencies involved in SCI

development; Publication of information materials on SCI;

5.1.1Board of Investment (BOI)

The Government of Bangladesh established the Board in Investment (BOI) as per Act of 1989 for accelerating investment in Bangladesh. The Board headed by Prime Minister of the Peoples Republic of Bangladesh includes ministries and secretaries of the concerned ministries and representatives of public and private sector. The board should be vested with adequate power to take prompt decisions for rapid implementation of new industrial projects and to provide operational support services to the existing ones. The BOI is a high-powered government apex body for promotion and development of FDI and local private investment in the country. BOI has an executive council, which consists of an Executive Chairman and Members and is responsible for carrying out the day-to-day functions. The Executive Chairmen is the member secretary of the board. It consists of 3 (three) members, 10 directors and a number of Deputy Directors and Assistant Directors. The main objectives of the establishment of BOI are to minimize the transaction costs, and reduce some of the risk costs, and extra expenses associated with the regulatory system in the field of investment. It is headed by the honorable Prime Minister/Chief Adviser. Its membership includes representatives (at the highest level) of the relevant ministries likeindustry, finance, planning, textiles, Jute, commerce, energy, power, as well as others, such as the Governor of Bangladesh Bank, Presidents of FBCCI and BCI . The Operational Head and CEO of BOI is the Executive Chairman. The key organogram of BOI is depicted below:


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Key Organization Structure of BOI

Head Office Regional Office

BOI Office

By Executive Chairman

Executive Council Chaired

Executive Chairman

BOI BOAR

Chairperson

Prime Minister


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The major functions of the BOI are below:-

o The Promotion of investment in manufacturing and service as a strategic mode for global business through publications, holding seminars and meetings with prospective investors in different countries to apprise the foreign investors about the opportunities and facilities offered by Bangladesh government home and abroad.

o Registration of industrial projects including infrastructure, manufacturing a service-oriented industries as well as foreign loan , royalty , technical know-how and technical assistance agreement where ever required.

o Approval of payment of royalty, technical know-how and technical assistance fees to foreign nationals/ organizations beyond the prescribed limits.

o Encouraging companies to use Bangladesh as a total business centre to set up plants, to design, develop; produce market, exports and services of their products.

o Encouraging existing foreign and local industries to upgrade their skill and technological levels through investment in technology, training and product developments activities.

o Development of local and foreign entrepreneurs. o Developing world-class industries and services clusters to generate meaningful jobs for

Bangladeshis that will help us attaining a developed standard of living. o To facilitate the exchange of information and co-ordination among institutions engaged in or

connected with industrial development. o To conduct effective media public relations campaign to develop a positive image of Bangladesh

for attracting FDI. o Issuing world permit to expatriate personal working in private sectors industrial enterprises. o Providing import facilities to the industrial units in the private sector. o Approval of terms and conditions of foreign private loan and suppliers credit beyond the

prescribed unit. o Allotment of land in the industrial estate/ areas for industrial purposes. o Conciliation of disputes relating to foreign investors. o Providing assistance to avoid infrastructure facilities to industries.

BOI has already started ‘one stop service centre’ to help the investors particularly in the following areas as an international support service Viz., pre investment counseling, electricity and gas connection, water and sewerage connection, telecommunication facilities, etc. BOI also offers country service to the visiting foreign investors. These services include reception at airport, hotel booking, transport arrangement and fixing appointments with government and chamber leaders in accordance with the needs of foreign investors visiting Bangladesh. BOI welcome service’ counter has been set-up to offer round the clock service to all foreign investors arriving at the Zia International Airport, Dhaka.

5.1.2 Bangladesh Export Processing Zones Authority: (BEPZA) In view of the growing need of industrialization and lower level of capital formation and the economy for financing the industrial projects the government of Bangladesh took the initiative to set up Export Processing Zones (EPZs) in different parts of the country in 1978. The decision of the government was


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later approved by the Executive Committee of the National Economic Council (ECNEC) in its meeting held on August 22, 1978. After the approval of ECNEC, the bill was placed in the parliament and passed as Bangladesh Export Processing Zones Authority Act-1980 (Act No XXVI of 1980). In pursuance of the Act 1980, Bangladesh Export Processing Zones Authority (BEPZA) has been empowered for creation, development, operation and management of Export Processing Zones under Public sector. Since then BEPZA is engaged in attracting and facilitating foreign and local investment in the Export Processing Zones of the country.

Investors willing to invest is EPZS are required to deal only with BEPZA for sanctioning of their projects and all other operational purposes. It performs different function like approval of the projects, allotment of land and factory building within the EPZs, issues work permits to foreign nationals, and take care of all other matters necessary for operation of industrial enterprises. In fact BEPZA is providing “One Window Same Day Service” for foreign and local investors. Rules and documentation procedures have been framed to make them easy and accessible to relevant parties with minimum formalities. BEPZA set up its first EPZ in the port city of Chittagong. The first EPZ in Bangladesh was established in 1983 in Chittagong and the second one in Dhaka in 1993. Five more EPZs in Mongla, Ishwardi, Uttara (Nilphamari), Comilla and Adamjee (Narayanganj) are in operation. Another EPZ named karnaphuli EPZ in Chittagong was inaugurated on 12th September 2006. A regulatory agency called Bangladesh Export Processing Zones Authority.

(BEPZA) is there to monitor the EPZs in the public sector and look after the investors’ interest, with a senior civil servant as its executive head; a powerful Board of Directors guides it, which is chaired by the Prime Minister.

Board of Governors (Formulates Policies, Reviews Activities, and performance and Issues Order)

Executive Board Operation and Management of the Authority and the Zones

CEPZ Mongla EPZ

DEPZ Iswardi EPZ

Comilla EPZ

Uttara EPZ

Adamjee

EPZ

Karnaphuli

EPZ


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Three types of investment i.e, A type, B type & C type are allowed in the EPZs. A type deals with a fully foreign owned units having 100% foreign investment. Under this type of investment all sorts of cost and working capital for a project will have to be borne by the concerned foreign investors. B-type covers joint venture project, which is owned jointly by foreign investors and Bangladeshi investors. Under this type of investment, project cost will be shared in accordance with the agreement made between local and foreign partners. C-type represents fully locally owned where 100% Bangladeshi investors make investment. Under this type investment is made by local investors. Existing investments in EPZs represent 30 countries like South korea, China, Japan, USA, Germany, Pakistan, Malaysia, Taiwan, India, Singapore, Panama, Denmark, Thailand, France, UAE, Sweden, Italy, Belgium, the Netherlands and Canada etc. At present 252 industries are operating and producing different famous brand products, which are exporting throughout the world.

Three types of investment i.e, A type, B type & C type are allowed in the EPZs. A type deals with a fully foreign owned units having 100% foreign investment. Under this type of investment all sorts of cost and working capital for a project will have to be borne by the concerned foreign investors. B-type covers joint venture project, which is owned jointly by foreign investors and Bangladeshi investors. Under this type of investment, project cost will be shared in accordance with the agreement made between local and foreign partners. C-type represents fully locally owned where 100% Bangladeshi investors make investment. Under this type investment is made by local investors. Existing investments in EPZs represent 30 countries like South korea, China, Japan, USA, Germany, Pakistan, Malaysia, Taiwan, India, Singapore, Panama, Denmark, Thailand, France, UAE, Sweden, Italy, Belgium, the Netherlands and Canada etc. At present 252 industries are operating and producing different famous brand products, which are exporting throughout the world.

Strategic Uses of FDI in Bangladesh Many underdeveloped and developing countries have increasingly recognized the economic growth of a country through proper utilization of foreign direct investment (FDI). These developing countries increased their per capita income as a result of foreign investment. The shortage of capital in underdeveloped countries is recompensed with foreign investment. It enables achievement of higher external economic scale through the managerial ability, technical knowledge, entrepreneurial skill, innovation and effective production techniques diluted by the multinational corporations. So every nation formulates strategy for better utilization of FDI for the rapid economic growth and development of the country.

Bangladesh is a developing country, where there is a crying need for FDI for the economic growth and development of the country. For this reason, the government of Bangladesh has undertaken necessary policy reforms, strategies and various steps. And these reforms and measures are also constantly reviewed and updated to adapt with the changing needs of the inflow of foreign investment environment. But the inflow of FDI in Bangladesh is not up to the mark. So an attempt has been taken to identify the areas where the utilization of FDI would be more effective for the nation as well as for the company. The study highlighted the strategic utilization of FDI for the country in respect of following aspects:


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FDI in labour intensive industries:

One of the objectives of Fifth Five-Year Plan of Bangladesh is to create employment for the increasing number of educated, young and energetic people. In order to create such employment the FDI may be motivated to invest in labour intensive industries. Bangladesh is a country of abundance supply of cheap, efficient and skilled manpower. Besides, a huge number of women workers, who are also working at a lowest wages are entering the job market continually. A good number of business graduates such as MBA, ICMAs, CAs and a good number of B.Sc. engineers and graduates in computer science are also available to the organizations at a competitive cost. A number of computer training organizations are also creating a substantial number of information technologists. Different polytechnic institutions are produce in skill technicians, diploma holders who posses sufficient competency to meet the need of the industry. All these opportunities can be availed by foreign investors by establishing labour intensive manufacturing and service organizations. The utilization of FDI in different developing countries like Malaysia, Brazil and Indonesia supported the investment for creation of employment. In these countries significant number of employment has been created through utilization of FDI in labour intensive industries. It is also reported that foreign affiliates tend to pay higher wages than that of domestic terms. By providing on –the- job training they develop the skill & efficiency of women and technicians. It improves their future employment opportunities elsewhere in the country.

FDI in Technology Transfer:

Many countries have witnessed the technological development through the contribution of multinational corporations. The multination companies have helped development, absorbed and disseminated modern technology for economic development of many under developed and developing countries. It contributes to develop unique product for the company, which in turn helps to gain competitive advantages. Technology is also considered to be the key to economic development. Bangladesh can use the FDI for the development of its technologies. This technological development in the field of infrastructure sector can contribute greatly to the development of its economy. The multinational corporations may be encouraged to develop technology- based manufacturing organization viz power sector, mineral sector, oil and gas sector, telecommunication etc. The inflow of FDI in the form of technology transfer in Bangladesh will increase the quality of manufacturing products, increases efficiency and quality of production, expedite business activities, boost of the volume of exports and develop the living of standards. All these will contribute to increase GDP of the country. The introduction of advanced and sophisticated technology would help to meet the competitive requirements of the world market. Care should also be taken that investment in technology would not compete with indigenous technology. A regulatory supervision may be introduced and necessary motivational steps may be taken to induce the foreign investors to invest their FDI in those sectors, which are strategically significant for the development of the country as well as where huge amount of investment is required and where there is a dearth of technological know-how.


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FDI in Quality Development Quality is considered to be a most significant ingredient for getting competitive advantage in all respects. The export volume of a country boost of with maintaining quality of goods and services. The proper utilization of available resources of the country would help to increases GDP. The quality of goods and services manufactured in our country is not up to the mark and the productivity of the human resources of our country is not equal to the international standard. All of these are due to dearth of quality in this sector. So there is an ample scope to utilize FDI for the quality development in different sectors of the country. Specially the investment in research and development, and technology may contribute to increase the efficiency and effectiveness to ensure production of quality goods and services. Bangladesh can increase her productivity of manpower, expert volumes, gain competitive advantages, ensure optimum or maximum utilization of available resources, provide the people with standard products and build the confidence and create good-will by adopting proper measures to employ FDI in these strategic areas.

FDI in Executive Development The maximum productivity of an organization can be ensured by proper utilization of human efforts. A good and efficient manager is an asset for an organization. He can add value to the activities of the organization through his innovative and creative works. So there must be room to impart training to the executives to boost their skill, capability of drawing inference to exploit competitive advantages and to formulate strategic policy for the organization. Many developing countries encouraged use of FDI in this sector in order to create a group of professional managers, engineers, entrepreneurs, accountants, information specialists and computer programmers. There knowledge and personalities contribute for making an industrial base for the country, which in turn increase the volume of production, generate employments and helps to develop and apply indigenous technologies. So in Bangladesh it is better for the government to create an environment to motivate the foreign investors to invest for the development of top and mid-level managers.

FDI in Export Development The inadequacy of domestic saving and scarcity of foreign exchange are considered as major constraining factors for the development of economy. Moreover, country’s export development strategy largely depends on the ability of developing and diversifying export products. Although about 120 products were listed as having been exported, a core group of 6 products viz, readymade garments, knitwear, raw jute, Jute goods, frozen foods, leather and leather goods constitutes about 90% of export earnings. There is an ample scope to boost exports from these sectors by ensuring production of quality products through the employment of sophisticated technology. The foreigners may have a scope to invest in all categories of export-oriented industries. FDI may also be utilized in the field of non-tradition items such as artificial flowers, cane and bamboo products, stuffed toys, jewelries cutting and diamond cutting and handicrafts which will contribute to increase GDP of the country. FDI may also be effectively utilized in computer software development and data entry, where the potentiality is very high. Moreover, the investment is exportable industries by the foreigners would help to enter and as well as to expand global market share because most of the multinational corporations have free access to different international market in today’s free market economic environment.


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FDI in Import Substitutions Industries

Bangladesh is importing huge quantities of consumer and industrial goods from different countries of the world. The amount used for import is Tk. 642.6 billion in FY 2003-04, which increased Tk.695.8 billion in the FY-2006-07 (up to Feb. 07). It indicates a rising trend of input volume by 8.28%2006-07 over than in 2003-04. So the government has spent huge amount of foreign exchange to feed this increasing import volume. This results in the constant negative balance of payment of the country. The situation can be rectified by pursuing appropriate policies for increasing investment in export oriented and import substitute industries viz oil, seeds, edible oil, crude petroleum, chemicals, pharmaceuticals, textile, yarn, capital goods etc. in the country. The foreign investors can utilize their FDI in these import substitute industries. This will increase profitability of their companies and save the valuable foreign currency of our country.

FDI Infrastructure Sector

Many developing countries have considered infrastructure facilities as a vital aspect for attracting FDI. In the infrastructure developments, foreign investors played a predominant role in many countries. The role of British investors is the expansion of the American railroads is but one example. There is also evidence of FDI by foreign entrepreneurs in the infrastructure development of different countries in the world. However, the infrastructure facilities in Bangladesh are not well developed. There is an ample scope for attracting and utilizing FDI in this sector particularly in the area of development of power, roads & highway, ports, energy and telecommunication sectors. Now this sector has been opened for foreign investments.

7.1 Policy Direction for Investment and FDI in Bangladesh

Foreign investment is considered to be crucial for the industrial and economic development of a country. It is particularly more significant for the economic well being of developing countries. We are in need of FDI for meeting the financial requirement of a number of investment projects. But the inflow of FDI is not up to the mark due to some constraint. So an attempt is made to give some suggestions to overcome the problems of foreign direct investment in Bangladesh. The following suggestions and strategies may be worthwhile and provide some guidelines to the policy makers, investors, researchers and the academicians for the satisfactory inflows of FDI in Bangladesh.

1. Political Stability

The political stability of a country is the pre-requisite of attracting FDI and maintaining congenial investment environment in a country. The different types of strikes, hartal, road blockade, and gherao called by different political parties and trade unions may be minimized through cultivation and practice of democratic norms, culture, behavior and upholding the rules of law. The Government should play a positive role in this respect. The government should be careful enough to cheek violation of human rights in the country. All political parties must have their commitment to ensure the political stability in the country; otherwise the foreign investors’ confidence to invest here shall remain shaky.


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2. Development of Infrastructure Facilities

Steps should be taken to develop infrastructural facilities in the country. The government may contribute to a large extent for the improvement of industrial facilities. Necessary facilities and incentives should be given to the private sector for the improvement of some aspects of this sector so that the infrastructure of the country particularly in the investor’s zones/areas may be developed rapidly. The policy of the government for encouraging foreign investment in this sector may be worthwhile. All sorts of obstacles against proper communication and transportation system must be removed. Water, gas and electricity supply must be improved to meet the demand and needs of foreign investors. The port facilities must be developed to serve the needs of the foreign investors. Telecommunication facilities must be up-dated to serve the needs of foreign investors.

3. Development of Skilled Manpower

Skilled human resources of the country are the vital element, which contribute toward attracting FDI. So necessary training institutions and facilities should be created to develop cheap abundant human resources available in the country. These human resources are reported to be more adaptive to the rapidly changing environment. Massive reform in education, extensive drive for improving literacy can contribute to create favorable investment environment.

4. Development of Investment Climate

A congenial and dynamic investment climate has been found to be much significant for attracting FDI. Therefore effective steps must be taken so that government plays promotional rather than regulatory roles in the economy. To ensure a regular, meaningful and effective dialogue between government agencies and business community, a high level Government – Business Consultative Committee should be formed with representation from both the sectors.

5. Development of Capital Market

Government as well as the business community must work neck-to-neck to develop a sound financial sector, especially a capital market in the country. Private sector-led and export oriented economic growth requires sound financial intermediaries such as banks and insurances. Financial markets such as money markets for short term funds and equity and bond markets for long term funds, and foreign exchange market for international transactions, financial institutions must be reorganized so that payments can be facilitated, savings can be mobilized, credits can be allocated efficiently, risks can be appropriately shared, and market information can be made available to all concerned. All these are a sine-qua-non for rapid industrialization and inflow of FDI.

6. Increasing Efficiency and Effectiveness in Banking System

Banking institutions must be thoroughly recast for fostering entrepreneurship as well as acceleration of the pace of industrialization in the country. The following measures need immediate consideration:


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a) Bank in most cases, demonstrates a risk-averse behaviour. Modern banking system requires appropriate sharing of risks with entrepreneurs.

b) Currently bank calculates interest by using a compound method, which provides disincentives to many potential investors. Introduction of simple rate of interest is conducive for smooth promotion of entrepreneurship and expansion of in the country.

c) An appropriate share of all bank capital should be earmarked for investment fund. d) In order to promote productive investment in the country both the nationalized commercial

banks and private banks should come forward to provide collateral-free capital to the potential entrepreneurs. The Banks may take into consideration the reputation of the entrepreneurs and certificate of merits of their sponsors in selecting potential investors and investment portfolios.

e) Currently interest rate structure remains largely discretionary in nature. Both high formal and informal costs of bank credits discourage many existing and potential investors. Step must be taken to encourage staff-productivity and professional banker client relationship in order to enhance operational efficiency of Banks.

In this context, the banking sector should be strengthened and modified keeping in view the changing pace of global business environment.)

7. Reform of Law Commission

The law commission formed for the modification, revision and updating the existing laws and judicial system should be enacted. It should continuously review the issues of legal system particularly, which are relating to trade, business and investment. Special law may be formulated to protect the interest of the foreign investors. The disputes of the foreign nationals, i.e., foreign investors should be settled within definite time limits. The different legal reforms done by the government should be executed as early as possible.

8. Decreasing the Rate of Corporate and other Tax and Determination

Foreign Exchange Rates through Market Mechanism The rate of corporate and other taxes in Bangladesh is reported to be high. It is found very unfavorable as compared to many South East Asian countries. A stable, automatic tax system with reasonable rate and without any discrimination is conductive to both the investors and the host country. It helps reducing administrative complexities and ensures effective tax administration. The determinations of foreign exchange rate as well as interest of bank on the basis of market mechanism is appreciated by the foreign investors which in-turn encourages inflow of foreign investment in the country.

9. Establishment of Regional and Sub-Regional Zones

The regional and sub-regional zones would be helpful to get raw materials, natural resources and access to wide market for the investors particularly the foreign ones. So to strengthen the existing regional zone i.e., SAARC and creation of new regional and sub-regional zones on the basis of economic interest may contribute to boost inflow of foreign investment in the country. More and more economic zones i.e., EPZs within the country with well-equipped facilities and incentives should be established. It appears that the facilities i.e., infrastructural facilities available in these zones are adequate and the


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inflow of foreign investment is also satisfactory. So these zones may be more attractive for foreign investors. In these zones all types of services and facilities are available in the same roof of BEPZA office. It also contributes in correcting unfavorable balance of trades.

10. Improvement of Law and Order Situation

The law and order situation of the country particularly in the industrial zones should be improved to create confidence among potential investors. The demolition of private sector enterprises in the country by the miscreant for undue money creates scare among the foreign investors. Unfortunately there is laxity in maintaining law and order situation due to underhand dealings and political purposes. Cases of attack and violence by criminals at the Monnu Ceramic and Dhaka Dying Caused large scale damages to production which seriously abrade confidence of potential and prospective investors of both domestic and foreign countries. The repetitive occurrence of such incidents must be checked fairly, and necessary instructions should be given to the law enforcing agencies to check these miscreants indiscriminately.

11. Development of private Sector Industrial Base.

Aggressive privatization programs should be implemented. The state owned enterprise must be privatized without delay. This would ensure strong private-sector industrial base, which would help to increase domestic investment as well as help to create confidence in foreign investors about the investment climate of the country. This would augment foreign investment in the country. Moreover, accelerating the pace of privatization and broadening the domestic investment base will facilitate the development of the capital market in the country.

12. Formation of Independent Commission Against Corruption

Complexities relating to investment are to be removed for attracting FDI in Bangladesh. An independent investigation commission should be formed to remove corruption prevailing every where in the country. A separate commission will also be formed to investigate the compliant against police. It should be arranged to appoint an ombudsman. FDI is comparatively more attractive in a corruption free country.

13. Establishment of Information System Centre

Presently there is hardly any institution in the country for providing information about various kinds of industrial activities in Bangladesh. An industrial census is needed on an emergency basis to disseminate information relating to demand and supply condition of industrial goods and service, production capacities and their actual utilization, classifications of laborers on the basis of shop floor scheme etc. Both government and private sector must work jointly in this regard. There is also no research center or data bank in the country that can provide information for establishment or operations of industries. The entrepreneurs depend on sheer personal commonsense and intelligence to guess the business environment or investment climate. An Industrial Research Center (IRC) should be established in the


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country with help from the government, private sector, and international agencies. Foreign direct investment has been alarmingly low in the country. A thorough Research in needed to find out the reasons for the fall in foreign direct investment and its relationship with local investment.

14. Empowerment of BOI:

The Board of investment (BOI) has been created to provide one-stop services to industrial enterprising. But so far it has failed to provide such a package deal. Directives of BOI should be mandatory for concerned agencies and authorities. Currently provision for infrastructural arrangements depends on various authorities and agencies and lack of coordination in providing approach road, electric, gas and telephone etc. hinder industrial development. The BOI‘s monitoring activities should be extended to the last stage of establishment of and industry. Besides this BOI should be given full authority and responsibility to deal promptly with all FDI related issues. The co-ordination between BOI and all other relevant ministries, agencies should be ensured under the chairmanship of Prime Minister who is looking after the FDI in the country.

15. Rebuild the Image Problem:

To improve the image problem for Bangladesh and for better understanding the country by foreign investors, Bangladesh Embassy at abroad may undertake aggressive propaganda and publicity, organizes fact-finding missions of Bangladesh through press, conduct seminars, symposium, introduces newspaper and magazines, and participates in trade fairs. All these would contribute toward rebuilding the country. The leading Chamber of Commerce and Industries can take initiative to organize seminars and workshop on the issue relating to FDI at home and abroad. These seminars, workshops, symposiums, press conference and package programmes in the international media can help the foreign investors to acquire a first hand knowledge about Bangladesh. These may be helpful to build a positive image of the country.

16. Remove Bureaucratic Complexities:

Bureaucratic Complexities constitute a major hurdle for attracting FDI in Bangladesh. After approval of a foreign or local project by BOI, it takes a long time from getting license to commissioning production. As a result, FDI is interrupted. For mobilization of FDI quickly, bureaucratic complexities must be removed, secondly, accountability in administration should be ensured. Besides, the government should take appropriate steps to bring forth and overall change in attitudes and behavior of the bureaucracy. Bureaucratic rent-seeking, abuse and misuse of power and undue privileges must be stopped for attracting FDI.

17. Improvement of Administration:

The administration and its procedure should be transparent for attracting FDI in Bangladesh. When foreign investors would fine no complication to follow the existing rules and resolutions then they will be interested to invest their capital in Bangladesh. However, in Bangladesh, divisions/ agencies responsible for issuing permission or registration of a foreign project are not easily accessible to foreign


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investors. The duration for taking permission or registration also remains uncertain and it takes time to complete the total procedure. Several interpretations of rules and resolutions cause a lot of arguments. The procedure for import export, particularly pre-shipment inspection as well as the custom clearance, is very complicated and time consuming .So the above complexities and formalities must be made easy for boosting the inflow of FDI.

18. Improvement of Living Environment

Living environment must be improved, so that the families of foreign investors could feel it comfortable to stay for a long time. For the improvement of living environment the following should be considered in Bangladesh.

Leisure facilities for the foreigners such as golf court, swimming pool, jogging place, shopping centre of high quality and fixed price goods etc. must be expended Preventive measures against pollution air

Pollution and waste management in Dhaka in Chittagong are to be taken as soon as possible.

19. Continuity of the Investment Policy

The continuity of the investment policy must be needed for attracting FDI in Bangladesh so that the foreign investors becomes confident of their future prospect along with the investment policy. However, in Bangladesh the major provisions of equipment has been modified continuously which adversely affect foreign investors. The sudden change of the rules and resolutions and its procedures, e.g. price increases of petroleum, gas, electricity and water supply etc. without prior notice of detailed explanation has been increasing the impression of uncertainty regarding the investment policy. Rapid change of high officials viz., BOI, BEPZA, Ministry of Commerce, Ministry of Industry also creates inconsistency of investment policy. So the above complications must be removed for attracting FDI in Bangladesh.

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