Policy choices in the FDI domain

Published in the Daily Star’s 9th Anniversary issue (24 Feb 2010)

Bangladesh is an atypical country where a very favourable foreign investment policy and reasonably attractive investment incentives remain untapped merely for its lack of infrastructure, primarily in the power sector. Over the last one and half decades, attracting foreign direct investment (FDI) in the power sector has been a priority to break the vicious circle of low FDI and energy shortage. Numerous writings and dialogues have already highlighted drawbacks in infrastructure, different forms of corruption and administrative complications being the major obstacles to FDI inflow.

Let me focus on some policy choices that the government needs to make to attract and balance the FDI flows in a post-recession global economy.

Recent trends
May be it’s the ‘Wall-Mart effect’ whereby our ready-made garments sector performed well from the western consumers turning to cheaper alternatives, or may be it’s just a very low benchmark, but Bangladesh’s performance in attracting FDI was not too bad during the recession. According to UNCTAD’s latest Global Investment Trend Monitor report, world’s FDI flow declined by 38.7 percent in 2009, with FDI flow towards developed and developing economies declining by 41.2 percent and 34.7 percent respectively. Developing economies of South, East and South-East Asia also witnessed a 31.8 percent decline in FDI flow.

What’s in a name?

Published in BDNews24 on February 22, 2010

For those who were wondering why the government had to rename the Zia International Airport, the prime minister, Sheikh Hasina, has this answer — “[BNP] needed to be taught a lesson.” What is the lesson exactly? That, when BNP was erasing Bangabandhu’s name from many institutions including the Bangabandhu Bridge and Bangabandhu Conference Centre, “they should have learned from history and seriously considered what might happen after they went out of power”.

One can’t disagree with the prime minister that every incumbent should learn from history and remember that one day they will go out of power too — and this includes the AL, as well as the BNP.

The name-game used to be very subtle until the last decade. For instance, instead of renaming Bangabandhu Avenue, tactful practice was to refer to it as ‘BB Avenue’. It’s mainly during the last decade that we witnessed the all-out indiscreet approach in renaming new and old institutions. Even if we agree that BNP played this name-game quite carelessly, AL’s move to ‘teach BNP in their own language’ needs to be scrutinised from different perspectives.