The government has decided to devise a strategic plan on incentives and other benefits to be offered to prospective foreign investors who will relocate their businesses to Bangladesh in the post-Covid-19 period.
A taskforce will also be formed to deal with the incentive issues, especially in the implementation stage, so that the investors do not feel offended when they come here practically.
The decisions were taken at the seventh meeting of the ‘Advisory Committee on Trade Assistance’ on Wednesday, with commerce minister Tipu Munshi in the chair.
Industries minister Nurul Majid Mahmud Humayun, secretaries, and heads of different trade bodies attended the meeting held at the secretariat in the capital. Foreign minister AK Abdul Momen and Prime Minister’s private industry and investment adviser Salman Fazlur Rahman joined the meeting virtually.
Briefing the media after the meeting, the commerce minister said that due to the adverse impacts of coronavirus pandemic, many big companies would relocate their factories to those countries where the cost of doing business was low.
“If we can attract them by offering tax incentives, we would be able to grab a good chunk of investment,” he expressed the hope.
“It will help us cope with the pressure of job cuts, which are now taking place,” said the minister.
“We may miss the train unless proper steps can be taken immediately,” he added.
Mr Munshi said the Bangladesh Investment Development Authority (BIDA) and other organisations concerned are doing their job to attract investment.
“But we have to take special measures to attract more investment at this point,” he pointed out.
Various issues such as unemployment and the country’s performance on the Ease of Doing Business Index came up at the meeting for discussion, said the minister.
He also said, “The main point is how much investment we can attract when the factories will be relocated.”
And the considerations will be what types of incentives should be offered and whether they will be higher than or equal to those extended by the country’s competitors, he added.
Mr Munshi cited the example of Indonesia, where investment up to $7.0 million gets 50 per cent tax holiday for five years, investment up to $71 million gets 100 per cent tax holiday for five years, investment up to $356 million enjoys 100 per cent tax holiday for seven years, and investment worth over $2.1 billion gets 100 per cent tax holiday for 20 years.
“Indonesia has emerged as our big competitor in global trade and investment,” the minister said.
He referred to the speech of Shafiul Islam Mohiuddin, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), who said several Indian states have frozen the labour law, giving employers the flexibility to hire and fire workers, fix wages and reduce their liabilities for three years to help businesses recoup the losses.
“…such steps will attract many investors. At least in the next three years there will be no labour unrest there,” said the minister, who is a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Nowadays, he said, factories in Bangladesh are damaged by workers and owners are gheraoed; and “we are unable to send a positive picture to investors” and all these have negative impacts
“We speak a lot — you will get this and that — but when they (investors) come here, they see a totally different picture and go back,” said the minister.
“We have said we will offer one-stop service, but the reality is there is no such arrangement practically; instead, they need to run from one table to another,” he said.
