Less red tape, more investment

Prime Minister Tarique Rahman has announced that Bangladesh will soon open the country's first investment office in China to attract investment from the world's second largest economy. It is a welcome initiative as China is the third largest source of foreign investment globally and holds the potential of emerging as the top investor.

At a time when Bangladesh is striving to accelerate industrialisation, create jobs and diversify exports, attracting greater Chinese investment should be a national priority. However, opening an investment office abroad, by itself, will not significantly increase investment inflows unless the country addresses the structural problems that continue to discourage foreign investors.

For years, successive administrations have boasted the "highly favourable" investment climate of the country while investment promotion agencies have held roadshows and summits in various continents. Huge resources have been devoted to projecting the country as a prime choice for foreign investments.

While the country has experienced strong economic growth in recent years, its level of foreign direct investment still appears modest when compared with other regional economies. According to media reports, fresh foreign direct investment (FDI) in Bangladesh remained largely stagnant in 2025.

The reasons are not difficult to identify. Investors seek fast processing of their files, predictability, efficiency and transparency. If they can work in a stable environment, they will certainly come. Unfortunately, this is where Bangladesh is lagging behind many of its peers.

A former Deputy Chief of Mission of the Chinese embassy in Dhaka once highlighted the barriers Chinese investors were facing in Bangladesh. As per his statement, an investor from his country had to wait for around two years to complete necessary registration and licences from departments concerned before starting operation, much to the frustration of the very investor, his peers and Chinese mission here.

As far as today's fiercely competitive global environment is concerned, investors have ample choices available to them. Many countries in Asia and Africa are actively seeking foreign investments. If it takes several years for the investment project to receive necessary approvals and licences in Bangladesh while investors could achieve the same in weeks or months elsewhere, then there would be no point in investing in Bangladesh.

Another example of China's mistrusting of the Bangladesh system is the discontinuation of China Radio International's agreement with Bangladesh Betar for FM broadcast of CRI programmes in Dhaka and Chattogram. It was the end of a long-term relationship between the two state-owned radio stations. Due to an alleged bureaucratic bottleneck, CRI (a part of China Media Group) left Bangladesh Betar and collaborated with a private radio station.

No matter whether it is related to manufacturing, infrastructure, technology, or media, such instances lead to an impression that working with the bureaucracy of Bangladesh is often more challenging than it should be.

Impressions play a huge role in making any kind of investment. Apart from the taxation rate, cost of labour, market size and other factors, investors assess file processing time, extra permission and regulation to make impressions concerning the ease of conducting a business.

If Bangladesh really wants to attract Chinese investors, several reformation initiatives need to be introduced. Despite the fact that some one-stop services have been created officially, many investors still face the necessity of going to different ministries, departments and regulatory agencies. All the approvals should be obtained through a single electronic portal.

The way the bureaucracy works should be changed radically. It is essential to review all the licences, permits and approvals and decide which of them are necessary at all. Reducing unnecessary regulatory layers would significantly lower the cost and time required to establish businesses.

Another area is the consistency in policies. Investors are usually concerned about any changes in regulations, changing taxes, and administrative uncertainty. Long-term investments need long-term certainty. Procedures for utility connections need improvement. Investors still find it difficult to get industrial power, gas, and other services. 

Bangladesh has many advantages over its peers as a foreign investment destination -- a big market, strategically good location, low labour costs, and increasing consumer needs. These could make the country an attractive choice for foreign investments.

The establishment of a new investment office in China should be regarded as the start, but not the end of the task. The difficult work is ahead -- institutional reforms, streamlining of procedures, and creation of favourable conditions for investments.

Only then, Bangladesh will be able to use all its chances.

rahmansrdk@gmail.com