Experts on Wednesday said reducing the cost of doing business and reforming policies were important to attract foreign direct investment (FDI) from the United Kingdom (UK).
They termed some of the challenges for Bangladesh in this regard, including export diversification, inadequate policies and strategies, weak collective action of non-apparel sectors, weak enforcement of intellectual property rights, slow implementation of infrastructural projects, including special economic zones (SEZs) and least developed country (LDC) graduation.
They made these remarks at a webinar, titled “Exploring Trade & FDI Opportunities with the UK”, which was organized by the Dhaka Chamber of Commerce and Industry (DCCI).
DCCI President Shams Mahmud moderated the webinar while Minister of State for Foreign Affairs Md Shahriar Alam was the chief guest.
British High Commissioner in Dhaka Robert Chatterton Dickson and Bangladesh High Commissioner to UK Saida Muna Tasneem also joined the webinar as special guests.
Prof Selim Raihan, executive director of South Asian Network on Economic Modeling (Sanem), presented the keynote paper.
The UK has been a key trade and investment partner of Bangladesh, whose export to the UK stood at $3.45 billion in FY 2019-20. But this was a 28.57% drop from $4.83 billion in FY 2018-19.
The UK became the second largest foreign investor in Bangladesh, registering an accumulated FDI stock of $2.45 billion as of March 2020, said DCCI President Shams Mahmud.
He added that the government might introduce infrastructure bonds to attract investment from the UK for developing large infrastructure projects.
“Continuation of Duty-Free Quota Free (DFQF) access to the UK and investment are inevitable to revive our export-led economic growth and employment generation, especially in the Covid-hit economic circumstances,” Shams remarked.
FDI from the UK to Bangladesh in 2018 was $370 billion, which is 10% of total FDI in Bangladesh. Whereas FDI from the UK to Asia in 2018 was £186.46 billion, but the share of Bangladesh in that was only 0.37%, he stated.
Prof Selim Raihan in his presentation said that some of the challenges for Bangladesh to attract FDI from UK were export diversification, inadequate policies and strategies, weak collective action of non-RMG sectors, weak enforcement of intellectual property rights, high cost of doing business and slow implementation of infrastructural projects, including SEZs and LDC graduation.
He also suggested initiating a dialogue for signing FTA with the UK in the post-LDC graduation era.
British High Commissioner to Bangladesh Robert Chatterton Dickson said that diversification of products was necessary to increase export competitiveness.
He said pharmaceuticals, IT, education, healthcare, service and financial sectors had the potential to attract UK investments.
He also said that reducing the cost of doing business and policy reforms were important to attract FDI.
“Bangla Bond in the London Stock Exchange creates an opportunity for the business community of both countries to work closely together. We are also keen to strengthen our existing trade relations with Bangladesh”, he added.
Minister of State Md Shahriar Alam said that the UK would give Bangladesh duty and quota free access till 2027.
“Regarding the new tariff regime, Bangladesh is in the process of discussion. In the post-pandemic situation, our export is on the right track,” he added.
“We also need to frame a new post-Covid-19 market strategy and establish a digital marketplace to promote innovative Bangladeshi products in the UK market,” the minister suggested.
