The lifeblood of any country’s economy is investment. Currently, Bangladesh is in a deep crisis regarding investment due to political uncertainty, mob violence, administrative weakness and inflation. Foreign investment in the country is declining because of high interest rates and local entrepreneurs are also turning away. Existing industries are also shrinking.
To protect industries in the country, strong initiatives are needed to address these hurdles. These will not only strengthen the economy but also enhance our global competitiveness and sustainability. According to media reports, investment has hit rock bottom due to political instability and mob violence. Besides, the sector has been thrown into crisis by the imposition of new taxes on the textile industry. These issues are raising concerns about the country’s overall economic future.
The political instability prevailing in the post-uprising period, worker dissatisfaction in industries, and the deterioration of the law and order situation have created a crisis of confidence among both foreign and domestic investors. According to Bangladesh Bank data, foreign investment from July to April of the recently concluded 2024-25 fiscal year has fallen to $910 million, the lowest in the last 14 years. Domestic investment has also stalled due to high inflation, a dollar crisis, and high interest rates on loans.
Economists and business leaders believe that the investment situation will worsen unless an elected government comes to power and ensures long-term policy and political stability. The Bangladesh Textile Mills Association (BTMA), a textile sector organization, has said that the imposition of a new 2 percent advance income tax on cotton imports will act as the ‘final nail in the coffin’ for the country’s textile industry. BTMA President Shawkat Aziz Russell and other leaders have alleged it a ‘blueprint’ of a neighboring country, aimed at strengthening its industry and weakening Bangladesh’s textile industry.
This is not only putting at risk the country’s $22 billion investment in the textile industry, but also threatening the employment of millions of people involved in this sector. While neighbouring countries are providing incentives of up to 40 percent to their textile industries, this rate is being continuously reduced in Bangladesh, which is sinking the country’s competitiveness. At the same time, the problems of important sectors like the textile industry must be seriously considered and effective solutions must be found. Unless unreasonable taxation is withdrawn and industry-friendly policies are formulated, the country’s economy will gradually move towards destruction.
