Kazi Zahidul Hasan :
Some business leaders said the government should allow local entrepreneurs to invest abroad, showing poor infrastructure and shortage of gas and power in the country hindering new investment.
They believe if there were enough infrastructure support in the country they would not have thought of making overseas investment. In the existing environment even fewer foreign investment is coming blaming poor infrastructure and energy supply.
Besides banks are now sitting with idle fund, high interest rate is different issue, but the main bottleneck as experts said to investment, is lack of political stability and a risk free investment climate.
The question is that the government is absolutely failing to remove these shortcomings thus slowing both the local and foreign investments. So when foreign direct investment is not coming enough, locals are also looking for ways to put their money in good use abroad.
The problem here basically lack of leadership to quickly address the basic investment issues and improving the political climate. But an inept government busy in political fights with an equally politicized and inefficient bureaucracy is failing to bring improvement in the situation. They are almost failing to retain local investors and encourage more foreign investors to come.
Given the investment risks coming down, local entrepreneurs may go for setting up more industries and services to create more jobs for income generation of the local people. Now the nation is also missing enough job creation from slow down in foreign investments.
In this situation, if Bangladeshi nationals start overseas investment, it means they would create more prosperity including jobs and income generation for foreign nationals depriving the poor Bangladeshi nationals of such benefits.
The investment potentials of Bangladeshi entrepreneurs are quite high now with their own capital accumulation and borrowing credibility. So they want to shift the investment abroad as the government is persistently failing to create the risk free investment climate.
Meanwhile almost all state owned banks have been swindled to the extent of over Tk 12,000 crore in some estimates and there is no trace of this money in the economy. Alone the Hall-mark Group robber Tk 36,00 crore from Sonali Bank, Bismillah Group swindled Tk 1250 crore from five banks. BASIC Bank lost Tk 4,500 crore to fictitious business firms. The list is hefty but money remained untraced.
Now many fear that if overseas investment is allowed capital flight may become pervasive under the cover of different investment proposals.
Economists fear that allowing investment by local entrepreneurs abroad may pave the way of unabated money laundering from the country, in addition to transfer of fund under formal channel harming the national economy.
Opposing the move, they hold the view that when the country has huge scope to make investment in various fields, businessmen should invest in the country to boost the economy.
“They should not be allowed making overseas investment when immense scopes are here,” Dr Salehuddin Ahmed, a leading economist and former Governor of Bangladesh Bank told The New Nation on Thursday.
He said the first choice should be accelerating local investment to make the economy more vibrant and sustainable. Therefore the government must do everything quickly to remove the infrastructure bottleneck and red-tapism.
The government must address these issues to encourage local investors. Once a smooth business and investment climate is created they may not feel interested for going overseas.
Moreover outward investment for lack of congenial environment may discourage more foreign direct investment to Bangladesh, he feared.
Dr Salehuddin Ahmed said that if there is a need to allow the local entrepreneurs to invest overseas, the concerned authorities first formulate effective policies and an appropriate regulatory body to monitor foreign investment activities.
Without it such investment may turn out suicidal for the national economy. “Businessmen can misuse the facilities making shadow investment proposals paving the way of illegal fund transfer,” he apprehends.
“There is no justification to for overseas investment when the country’s own investment scenario is showing signs of stagnation,” Dr AB Mirza Azizul Islam, a former adviser to the caretaker government told The New Nation.
He further said that once the country opens its doors wider to invest local entrepreneurs abroad, it could hurt its economic growth and job creation.
He said the possibility of money laundering can’t be ruled out if such a facility opens up. “Risk may be associated with the facility, but this can also curb illegal capital flight from the country, which is already taking place under many covers ” he added.
He however, believes that since the country lacks congenial investment climate, it has created an appetite to the local entrepreneurs to make overseas investment. They can’t be blamed. So, the government must improve overall investment climate soon to allow the entrepreneurs to make good of their resources in the country.
Dr Zahid Hussain, lead economist at World Bank’s Dhaka office said, everything is possible in the free market economic environment. What is important is that the government should carefully weigh out each proposal to find out its justification.
He added: There should a proper policy in this regard with developing institutional and administrative capacity to deal with the matter.
Dr Zahid Hussain also said that local businessmen raised the demand considering the overall investment climate of the country. They may not be satisfied with the investment returns given the risks. They want to invest their idle money overseas to make more profit.
Some business leaders said the government should allow local entrepreneurs to invest abroad, showing poor infrastructure and shortage of gas and power in the country hindering new investment.
They believe if there were enough infrastructure support in the country they would not have thought of making overseas investment. In the existing environment even fewer foreign investment is coming blaming poor infrastructure and energy supply.
Besides banks are now sitting with idle fund, high interest rate is different issue, but the main bottleneck as experts said to investment, is lack of political stability and a risk free investment climate.
The question is that the government is absolutely failing to remove these shortcomings thus slowing both the local and foreign investments. So when foreign direct investment is not coming enough, locals are also looking for ways to put their money in good use abroad.
The problem here basically lack of leadership to quickly address the basic investment issues and improving the political climate. But an inept government busy in political fights with an equally politicized and inefficient bureaucracy is failing to bring improvement in the situation. They are almost failing to retain local investors and encourage more foreign investors to come.
Given the investment risks coming down, local entrepreneurs may go for setting up more industries and services to create more jobs for income generation of the local people. Now the nation is also missing enough job creation from slow down in foreign investments.
In this situation, if Bangladeshi nationals start overseas investment, it means they would create more prosperity including jobs and income generation for foreign nationals depriving the poor Bangladeshi nationals of such benefits.
The investment potentials of Bangladeshi entrepreneurs are quite high now with their own capital accumulation and borrowing credibility. So they want to shift the investment abroad as the government is persistently failing to create the risk free investment climate.
Meanwhile almost all state owned banks have been swindled to the extent of over Tk 12,000 crore in some estimates and there is no trace of this money in the economy. Alone the Hall-mark Group robber Tk 36,00 crore from Sonali Bank, Bismillah Group swindled Tk 1250 crore from five banks. BASIC Bank lost Tk 4,500 crore to fictitious business firms. The list is hefty but money remained untraced.
Now many fear that if overseas investment is allowed capital flight may become pervasive under the cover of different investment proposals.
Economists fear that allowing investment by local entrepreneurs abroad may pave the way of unabated money laundering from the country, in addition to transfer of fund under formal channel harming the national economy.
Opposing the move, they hold the view that when the country has huge scope to make investment in various fields, businessmen should invest in the country to boost the economy.
“They should not be allowed making overseas investment when immense scopes are here,” Dr Salehuddin Ahmed, a leading economist and former Governor of Bangladesh Bank told The New Nation on Thursday.
He said the first choice should be accelerating local investment to make the economy more vibrant and sustainable. Therefore the government must do everything quickly to remove the infrastructure bottleneck and red-tapism.
The government must address these issues to encourage local investors. Once a smooth business and investment climate is created they may not feel interested for going overseas.
Moreover outward investment for lack of congenial environment may discourage more foreign direct investment to Bangladesh, he feared.
Dr Salehuddin Ahmed said that if there is a need to allow the local entrepreneurs to invest overseas, the concerned authorities first formulate effective policies and an appropriate regulatory body to monitor foreign investment activities.
Without it such investment may turn out suicidal for the national economy. “Businessmen can misuse the facilities making shadow investment proposals paving the way of illegal fund transfer,” he apprehends.
“There is no justification to for overseas investment when the country’s own investment scenario is showing signs of stagnation,” Dr AB Mirza Azizul Islam, a former adviser to the caretaker government told The New Nation.
He further said that once the country opens its doors wider to invest local entrepreneurs abroad, it could hurt its economic growth and job creation.
He said the possibility of money laundering can’t be ruled out if such a facility opens up. “Risk may be associated with the facility, but this can also curb illegal capital flight from the country, which is already taking place under many covers ” he added.
He however, believes that since the country lacks congenial investment climate, it has created an appetite to the local entrepreneurs to make overseas investment. They can’t be blamed. So, the government must improve overall investment climate soon to allow the entrepreneurs to make good of their resources in the country.
Dr Zahid Hussain, lead economist at World Bank’s Dhaka office said, everything is possible in the free market economic environment. What is important is that the government should carefully weigh out each proposal to find out its justification.
He added: There should a proper policy in this regard with developing institutional and administrative capacity to deal with the matter.
Dr Zahid Hussain also said that local businessmen raised the demand considering the overall investment climate of the country. They may not be satisfied with the investment returns given the risks. They want to invest their idle money overseas to make more profit.
