Investments cannot be secured under volatile circumstances

Despite steady economic growth in Bangladesh over the past decade, foreign direct investment or FDI has been comparatively low in Bangladesh compared to regional peers. As compared with USD 2.9 billion FDI inflow in Bangladesh in 2022, FDI inflows amounted to USD 141.2 billion in China, USD 50.6 billion in India, USD 23.9 billion in Indonesia and USD 16.1 billion in Vietnam. The rate of FDI inflow in Bangladesh is only around 1 percent of GDP, one of the lowest in Asia. While even during the pandemic (2020), FDI flows to developing countries in Asia increased by 4 percent to USD 535 billion, according to figures from the UN Conference on Trade and Development (UNCTAD), Bangladesh could not achieve the expected FDI. In 2022, foreign investors invested around USD 17 billion in Vietnam, USD 64 billion in India, approximately USD 18.58 billion in Indonesia, whereas Bangladesh received USD 2.56 billion and of the amount, USD 1.6 billion accounted for reinvested earnings by the already existing foreign companies in the country.
Government agencies in Bangladesh often claim that they are sincere and very keen on promoting investment. However, government claims do not often reflect ground reality. A foreign investor generally evaluates a country based on its ease of doing business ranking and overall economic climate. Although Bangladesh advanced eight notches in the World Bank's ease of doing business 2020 ranking to 168 out of 190 countries, there are still significant bottlenecks in doing business. For instance, transferring a property title in Bangladesh takes an average of 271 days, almost six times longer than the global average of 47 days. Resolving a commercial dispute through a local first-instance court takes an average of 1,442 days, almost three times more than the 590 days' average among OECD high-income economies. According to the World Bank, to get electricity connection in Bangladesh, a new business needs 150.2 days, whereas in Vietnam it takes 31 days, in Singapore 30 days, in Malaysia 24 days and in neighbouring India 55 days.

There are allegations that some investors have gone back to their country after finding long periods of waiting and hassles of overcoming many obstacles a bit too much. Industry experts say, the deterrents that discourage foreign investors include time-consuming bureaucracy, poor socio-economic and physical infrastructure, unreliable energy supply, corruption, absence of good governance, low labour productivity, undeveloped money and capital markets, high-cost of doing business, complicated tax system, frequent changes in policies on import duties for raw materials, machinery and equipment, delays in decision-making and so on.