Confidence-building campaign for private investors

Business leaders and policy researchers have expressed their deep concern at the fall of private investment at its lowest in a decade in the fiscal year (FY) 2025. The revelation that such investment plummeted to 22.03 per cent of the gross domestic product (GDP) is hardly surprising considering the overall investment environment during the period. It was a time of great political uncertainties, chaotic law and order not helped much by social disorder dominated by what is called 'mobocracy' well beyond the control of demoralised law enforcement agencies. The period under review was witness to outrageous passivity of the administration. In a situation like this investors' confidence in the financial system marked already by banking scandals and laundering of money during the deposed regime cannot but be at its lowest.

It is against this backdrop, a seminar titled, "Biannual Economic State & Future Outlook of Bangladesh Economy---Private Sector Perspective" was hosted by the Dhaka Chamber of Commerce and Industry (DCCI) on Monday. Quite naturally, the speakers dissected the investment climate obtaining then and now, in order to ride out of the messy situation. With the raging war in Iran spreading fast in the Middle East (ME), the fallouts could not be more deadly for the business environment and investment climate. Already, the garment export has experienced a sluggish demand as reflected in the lower revenue earning for consecutive seven months. If the war gets protracted, global commerce and trade will suffer further. Countries like Bangladesh only more so as they depend mostly on export of a single commodity like the readymade garment (RMG). Although the finance and planning minister has stated that the budget is being prepared with due consideration for the volatility of international market due to the ME war, it is hardly going to assuage public anxiety. 

The fact is, the country's economy did not have enough time for a turnaround in the post-Covid period before breaking out the Ukraine war. Then the billions of non-performing loans (NPLs) and looting of money from banks for laundering abroad weakened the country's economy. This government is unlucky to confront a more hostile regime of global trade and commerce thanks to Donald Trump's aggressive reciprocal tariff and war on Iran. So, Bangladesh has to navigate a more tortuous course of export of commodities and import of energy, capital machinery and raw materials for running industries. 

Admittedly, this is no auspicious time for new investment anywhere. Yet Bangladesh has to ride out  this crisis. The government has initiated a move to expand the non-tariff base of revenue. While the income from this internal source can lessen dependence on foreign and multilateral organisations, a fare share of it should go to new investments. This should be used as a confidence-building campaign for private investors. The target areas for such investments should be carefully selected. Pharmaceutical industry, leather and leather goods, light engineering, jute, home textile and frozen foods are deserving candidates for such investments. The lacunae that hold back the growth of such industries should be addressed as early as possible. For example, the faulty central effluent treatment plant (CETP) at Savar leather industrial park can be taken up for rectifying or replacing immediately. Import of its capital machinery will not involve deadly war zone. There is no option other than getting the options right.