The 1,376 foreign and joint venture industrial units, registered by the Bangladesh Investment Development Authority (BIDA) from January 2009 to October 2016, have proposed investment of about US$ 27.64 billion. These units may create about 431,688 employments in the country. The BIDA has also provided registrations to joint venture industries with direct foreign investment during the current fiscal 2016-17. All these were disclosed by the Prime Minister while talking about her government's initiatives in attracting foreign investment and increasing investment facilities.
Yet various business bodies are now demanding for an amendment to the BIDA Act to raise its power and give it supremacy over all other related departments. At the same time, there are also proposals for an alignment of all laws and regulations related to investment in the country and make those legally binding for other ministries and departments in acceptance of the BIDA's regulating authority.
The law now grants the BIDA regulatory authority over private investors and only advisory authority over other government departments. But, there are numerous public sector businesses that are involved in manufacturing and services and remain outside the purview of BIDA.
The Bangladesh Investment Development Authority Act 2016 was passed in Parliament in July last year creating the new national investment authority through merger of the Board of Investment and the Privatisation Commission. The new entity has already proposed a One-Stop Service Act to boost investment in the country by reducing bureaucratic tangles.
On the proposed One-Stop Service Act, there are a number of related laws and regulations that should be aligned to make the law effective. The laws are Foreign Exchange Regulating Act 1947, Customs Act, Immigration Act, Trade Control Act, Land Registration Act, Companies Act, Overseas Employment Act, ADR Law etc.
At the same time, Intellectual Property Rights, enforcement of verdict and overseas legal system, Law of Contract, Income Tax Act, Competition Commission Act, Import Policy, Export Policy and Banking Policy also need to be aligned to make the law effective.
All these laws and regulations need to be aligned to make it legally binding for other ministries and departments to accept the regulating authority of BIDA. Simultaneously, Export Processing Zones and Special Economic Zones should also come under BIDA to boost investment in these specialised zones.
However, the real problems in Bangladesh are absence of strong, independent and transparent institutions and infrastructural bottlenecks. There is a need to bring more multinational companies to the local capital market. Also, the country needs a secondary bond market for investment.
The country's goal of becoming a high income country by 2041 is an ambitious one that requires investment in all areas to be led by private sector and helped by public sector. The country needs to devise an 'indigenisation' programme in various sectors for gradual replacement of foreign workers with local manpower, as they take out a substantial sum of money. Such 'indigenisation programme' has earlier been quite successful in Africa where the foreign workers have progressively been replaced by local ones.
In fact, nobody knows how many foreign workers are working illegally in the country and how much money is going out through them. In this context, BIDA can monitor works of various business entities harbouring illegal foreign workers. It needs to monitor how many foreign workers are working illegally in which organisations.
There is no denying that the country is, at present, facing a number of challenges like inadequate infrastructure, governmental and bureaucratic delays, and concerns over workers' rights and safety for attracting foreign direct investment (FDI).
Land scarcity is a big problem for the investors to set up new industries. The BIDA needs to address this particular problem now. Keeping in mind the barriers often put by ministries to productive use of public land by setting up industries, the new law stipulates formation of an execution committee of investment related projects. It will take decision on land use in meetings with all stakeholders so that no barrier remains on its way at a later stage.
The BIDA, through a set of reform process, is expected to create a global standard business and investment-conducive environment. The ministries, divisions and agencies will enjoy full freedom in taking reform initiatives, programmes and activities to achieve the target.
Under the plan, the BIDA will conduct studies on 10 different sub-matrices related to ease of doing business. It is scheduled to finalise a plan of action in consultation with stakeholders including ministries, private sector, trade bodies and experts from local and international development agencies.
According to the action plan, the ministries and agencies will have to improve the fields where the country lagged behind in the ease of doing business environment including regulatory affairs, taxation, starting a business, getting credit and electricity, enforcing contracts, number of procedures in starting business, protecting minority investors and trading across borders.
All said and done, the BIDA's reform process should aim at an action plan that substantially improves the business climate for the advent of a new generation of enterprises and investors, expansion of existing businesses and attracting FDI.