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The Financial Express

Unsettling regulatory action


Unsettling regulatory action

Bangladesh needs proper legal framework for addressing disputes and attracting foreign investors in Bangladesh. Many potential investors lost their interest in investing in Bangladesh reportedly due to recent arbitrary regulatory crackdowns.

Reducing regulatory uncertainties is an area where Bangladesh can improve, feel private sector specialists. Many potential foreign investors shy away from investing in Bangladesh finding regulatory uncertainties. They particularly find the laws and regulations written and implemented in clumsy ways.

Enhancement of investment arbitration, legal capacities and dispute resolution through a sound framework  would   certainly go a long way to restore the confidence of potential foreign investors.

In 2020, Foreign Direct Investment (FDI) dropped to $2.56 billion from $2.86 billion in 2019. FDI dropped by 11 per cent in 2020, according to the United Nations Conference on Trade and Development (UNCTAD).

Despite improvements in ease of doing business and attracting Foreign Direct Investment (FDI), Bangladesh lags far behind Indonesia and India in attracting start-up investments.

Among South Asian Countries, Bangladesh is ahead of only Pakistan and Afghanistan in attracting FDI. Some investors feel that the investment climate is still developing in Bangladesh. Over the last 10 years or so Bangladesh could attract about $350 million worth of FDI in tech and startup ecosystem.

In 2020, FDI in Afghanistan was $0.013 billion, in Pakistan - $2.1 billion, in Bangladesh -$2.6 billion and in India --$64 billion. In 2020, Bangladesh ranked 168th among 190 countries, according to the World Bank Ease of Doing Business Index.

In its latest crackdown, the Directorate General of Health Services (DGHS) had suspended the services of  PRAAVA Healthcare, a private healthcare enterprise, supported by several foreign investors.

However, PRAAVA was later  allowed to resume its services  as the DGHS lifted the suspension after three weeks.

But the whole exercise shocked PRAAVA Healthcare's investors and some of them have expressed concern about investing in Bangladesh in future, founder and Chief Executive officer of PRAAVA Healthcare, Sylvana Quader Sinha told a national daily.

She said that one of the investors had felt quite comfortable with his investments in PRAAVA and was considering the prospect of exploring the possibilities of making further investments, but he lost his interest after his recent experience.

Prominent investors who invested in PRAAVA include, retired US army general David H Petraeeus, chairman of KKR Global Institute, SBK Tech Venture's Wellville Executive founder Esther Dyson,  co-founder and chief executive officer of IORA Health Dr Rushika Fernandopoulle and Singapore Digital Health and Singapore Agency of Science, Technology and Research's adviser and chief operating officer of OAK Street Health Dr Jeremy Lim.

Sylvia Quader Sinha was surprised over an inspection team paying a visit. The team asked PRAAVA to make some changes without prior information and took the drastic action of suspension.

The Medical Practice and Private Clinics and Laboratories (Regulation) Ordinance 1982, permits the authorities to suspend service only after serving a show-cause notice. The law permits the DGHS to shut down an erring clinic but not a laboratory.

The DGHS, however, said its officials visited PRAAVA several times and advised it to bring needed changes,  but PRAAVA addressed some of the issues and some of the responses were not satisfactory for which the suspension followed.

DGHS officials also claimed that PRAAVA was given prior verbal notice about the investigation. They said that PRAAVA was allowed to resume its services after it had addressed the issues and the suspension was lifted after three weeks.

 

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