Reformation of Arbitration Act a must to attract FDI

We know a stable business environment comprising an efficient dispute resolution system is one of the prerequisites for attracting FDI. Bangladesh must put in place sound and enforceable commercial laws and affordable commercial dispute resolution systems and ensure adequate protection to investments to remove barriers hindering businesses and creating investment opportunities. Experts at an event in the city have underscored establishing a legal framework to enable swift and efficient contract enforcement, particularly in cross-border commercial disputes.
Experts said the experience and evidence show that despite overwhelming challenges, it is possible to reform the commercial laws and it is possible to deliver specific improvements, which can make it easier to do business. Weaknesses in the commercial legal environment, including irrelevant laws and regulations, have been hindering business and investment opportunities. In the post-LDC period, Bangladesh will compete with other developing countries, and confidence is the key to attracting foreign direct investments. Sound and enforceable commercial laws and affordable commercial dispute resolution systems are vital to attracting FDIs.
According to the latest World Bank annual ratings, Bangladesh rose to a rank of 168th among 190 economies in the global ease of doing business index in 2020 from 176th in 2019. As per the World Bank Report, reduced registration fees, improvement in case of getting new electricity connection and improved access to credit information helped the country to level up by 8 notches. FDI is essential for transferring technology, creating employment opportunities, and enhancing a country’s finance and technology sectors. In Bangladesh, FDI accounts for approximately one percent of the country’s GDP. This figure can be improved by developing clarity in existing policies and increasing the trustworthiness of government officials by adhering to both national and international laws. Bureaucratic issues, infrastructure shortfalls, high tax rates, and difficulty in accessing finances all impede the ease of doing business in Bangladesh.
Foreign investors require protection for their investments and protection against the pretty risks of expropriation, protection through dispute settlement mechanisms, and protection of their intellectual property. Therefore, it is essential to reform the Arbitration Act as the first step towards addressing such challenges existing in our legal atmosphere.