DHAKA NEWS
Foreign entrepreneurs shy away from investing in Bangladesh for confrontational politics, strikes and mass demonstrations, an EU envoy said yesterday.
"These are scaring for investors," Svend Olling, the Danish ambassador to Bangladesh, said at a dialogue on Bangladesh-European Union relationship and scenarios for the next decades.
Problems of poor infrastructure, energy shortage and corruption also discourage foreign investment. "These are also technical barriers to trade," Olling said.
The Centre for Policy Dialogue (CPD) organised the discussion at the Lake Shore Hotel in the capital. The Head of the EU Delegation to Bangladesh William Hanna, leading businesspeople, and diplomats also spoke there.
CPD Chairman Rehman Sobhan presided over the discussion while CPD Distinguished Fellow Debapriaya Bhattacharya moderated it.
Olling made the remark after discussants pointed out that investment from European companies remains low here though EU is Bangladesh's largest export market and the single biggest source of aid.
In 2011, foreign direct investment (FDI) from EU accounted for one third of the total FDI here, said CPD Executive Director Prof Mustafizur Rahman while presenting a paper on Bangladesh-EU relations.
"Except for the UK and Netherlands, FDI from EU countries has tended to remain low," said Rahman.
Participants said an increased investment from EU companies will benefit both the trading partners since Bangladesh and the EU together make a market of 65 crore (650 million) people.
Saiful Islam, former president of Bangladesh German Chamber of Commerce and Industry, said the EU should encourage its investors to put money in businesses here, as Bangladesh has the potential to become a regional trade and economic hub.
On the government initiative to establish special economic zones, he said the EU should offer assistance for SEZ's infrastructure development and other issues.
Md Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said European companies can get a huge market in the region by investing in Bangladesh.
Discussants also underscored the need for an increased EU support for skills development of Bangladeshi workers, mitigation of the impacts of climate change, and addressing the problems of malnutrition and gender disparity.
They proposed that the EU should hire more Bangladeshi workers. The bloc is the third biggest source of remittances for Bangladesh to date, mainly for the migrant workers in the UK.
"Remittance inflows from the EU are not very encouraging. Bangladesh's dependence on EU aid can be reduced if it gets more remittance," said former ambassador Ashfaqur Rahman.
Syed Nasim Manzur, managing director of footwear exporter Apex Adelchi, said the EU spent $21 million to help Bangladesh develop infrastructure. "If you [the EU] want Bangladesh to create more jobs and cut poverty, you need to support infrastructure development."
Manzur feared that Bangladesh might face tough competition in the Eurozone market in the future, as the EU is cutting average tariffs and signing free-trade deals with different countries.
Prof Meghna Guhathakurta, executive director of Research Initiatives Bangladesh, said the eastern border will be important for Bangladesh, as issues of regional connectivity, ethnicity, and maritime boundary will revolve around the eastern part.
William Hanna said Bangladesh has taken the advantage of zero-duty export facilities provided by the EU.
He said the EU will continue to work closely with Bangladesh to support its development, strengthen democracy and ensure human rights. The two sides should talk about mutual interest and engage at global forum.
Rehman Sobhan said the EU should support Bangladesh for agrarian reforms and distributing khas land to the landless.
He proposed that the EU should link the issue of market access with the benefit of workers, and said the EU can have provisions to make workers direct beneficiaries of profit from duty-free export to the EU market.
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