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Investment falls drastically: Poor infrastructure, power, gas shortage blamed
Statistics show that the first year of the Awami League government experienced a volatile investment scenario even compared with the emergency government
Wednesday January 06 2010 02:23:29 AM BDT
Syful Islam
A total of 116 foreign and joint venture investment proposals have been registered with the Board of Investment (BoI) during the 11 months of the just concluded 2009 against 139 proposals in 2008.(The New Nation )
Statistics show that the first year of the Awami League government experienced a volatile investment scenario even compared with the emergency government.
Businessmen and economists said the impact of global economic recession and weaknesses in infrastructure, power and gas supply led to the sharp decline of the investment throughout the year raising the number of unemployed people. Besides, the steps to attract both foreign and local investments were also inadequate during the period, they said.
According to the BoI statistics investment proposals worth $738.04 million were registered during the January-November period of 2009 against $2469 million in 2008.
Of the registered proposals in 2009, 31 were 100 per cent foreign investment while 79 were joint ventures. Of the proposals 2 each were for agro-based industries, food and allied, and printing industry, 31 for textile sector, 4 for tannery and rubber products, 23 for chemicals, 17 for engineering and 35 for service sector.
Of the 116 proposals 18 were from China, 17 from South Korea, 11 from Japan, 9 each from USA and India, 8 from the Netherlands, 6 from Sri Lanka, 4 each from Australia, KSA, Singapore, Pakistan and UK, 3 from Malaysia, 2 each from Denmark, Finland and Taiwan and 1 each from Canada, France, Germany, Greece, Italy, Russia, Spain, Thailand and Turkey.
On an average 60 per cent of the registered proposals finally materialised, BoI officials said.
The latest statistics of the local investment proposals were not available with the BoI but recent data show that a total of 793 local investment proposals, amounting to $986 million, were listed with the board till September, 2009 against 1,122 proposals of $2,136 million in corresponding period of 2008.
According to the Bangladesh Bank's monthly report for November Tk 33,995.15 crore were laying in the banks due to the absence of good number of investment proposals.
The number of applications for term loan during the period was very few, said an official of Bangladesh Bank. "Local investors could not make up their mind during the first year of the present government as investors in many cases were afraid of the extortionists."
Economists and businessmen of the country said that government's failure to provide power and gas and lack of infrastructure development has resulted in reduced flow of investment in the country. Especially, there was no projection of gas and electricity supply, that's why investors did not come up with proposals.
They further pointed out that uncertainty, the changed political situation, several untoward incidents and widespread extortions have together kept local investors away from new ventures. They said foreign investors got negative message over the prevailing atmosphere resulting in fall in investment.
Talking to The New Nation president of American Chamber of Commerce in Bangladesh (AmCham) Aftab Ul Islam said power, gas and infrastructure are one of the cornerstones of investment.
He said inadequate power and gas supply and under developed infrastructure are to be blamed for sharp fall in investment.
"We have huge mineral resources like gas and coal but we can't use those. The incentives given by the BoI to both local and foreign investors are enough to attract investment but fail due to lack of necessary power and gas supply."
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Abdus Salam Murshedy told this correspondent yesterday that global recession also created a negative impact on investment flow.
He said gas and power are prerequisites for new investment, but the finance minister recently said that no new connection of these utility services would be given in the near future.
Murshedy further said the government has to make it clear the timeframe when the existing industries would get 100 per cent supply of gas and electricity. Besides, the government has to give projection if new economic zones or garment villages would be given permission in the near future, to attract both local and foreign investment.
Prof Abu Ahmed of University of Dhaka said widespread extortion, political unrest and incident like the BDR mutiny kept the investors away from new investment in 2009.
"The ongoing drought in investment will raise the number of unemployed people resulting in social unrest," he said.
Ahmed said the government will have to improve law and order stop political extortion and allow administration to function without interference to bring about a positive change in this field.
Abul Barkat, a teacher of University of Dhaka said unless a pro industrialisation mindset is created among the politicians, massive investment will remain a far cry.
Executive Director of Centre for Policy Dialogue Mustafizur Rahman said job creation is a must in this present situation of global economic change. To this effect the government has to accelerate investment both from local and international level, he said.
http://www.bangladesh-web.com/view.php?hidRecord=299622
Statistics show that the first year of the Awami League government experienced a volatile investment scenario even compared with the emergency government
Wednesday January 06 2010 02:23:29 AM BDT
Syful Islam
A total of 116 foreign and joint venture investment proposals have been registered with the Board of Investment (BoI) during the 11 months of the just concluded 2009 against 139 proposals in 2008.(The New Nation )
Statistics show that the first year of the Awami League government experienced a volatile investment scenario even compared with the emergency government.
Businessmen and economists said the impact of global economic recession and weaknesses in infrastructure, power and gas supply led to the sharp decline of the investment throughout the year raising the number of unemployed people. Besides, the steps to attract both foreign and local investments were also inadequate during the period, they said.
According to the BoI statistics investment proposals worth $738.04 million were registered during the January-November period of 2009 against $2469 million in 2008.
Of the registered proposals in 2009, 31 were 100 per cent foreign investment while 79 were joint ventures. Of the proposals 2 each were for agro-based industries, food and allied, and printing industry, 31 for textile sector, 4 for tannery and rubber products, 23 for chemicals, 17 for engineering and 35 for service sector.
Of the 116 proposals 18 were from China, 17 from South Korea, 11 from Japan, 9 each from USA and India, 8 from the Netherlands, 6 from Sri Lanka, 4 each from Australia, KSA, Singapore, Pakistan and UK, 3 from Malaysia, 2 each from Denmark, Finland and Taiwan and 1 each from Canada, France, Germany, Greece, Italy, Russia, Spain, Thailand and Turkey.
On an average 60 per cent of the registered proposals finally materialised, BoI officials said.
The latest statistics of the local investment proposals were not available with the BoI but recent data show that a total of 793 local investment proposals, amounting to $986 million, were listed with the board till September, 2009 against 1,122 proposals of $2,136 million in corresponding period of 2008.
According to the Bangladesh Bank's monthly report for November Tk 33,995.15 crore were laying in the banks due to the absence of good number of investment proposals.
The number of applications for term loan during the period was very few, said an official of Bangladesh Bank. "Local investors could not make up their mind during the first year of the present government as investors in many cases were afraid of the extortionists."
Economists and businessmen of the country said that government's failure to provide power and gas and lack of infrastructure development has resulted in reduced flow of investment in the country. Especially, there was no projection of gas and electricity supply, that's why investors did not come up with proposals.
They further pointed out that uncertainty, the changed political situation, several untoward incidents and widespread extortions have together kept local investors away from new ventures. They said foreign investors got negative message over the prevailing atmosphere resulting in fall in investment.
Talking to The New Nation president of American Chamber of Commerce in Bangladesh (AmCham) Aftab Ul Islam said power, gas and infrastructure are one of the cornerstones of investment.
He said inadequate power and gas supply and under developed infrastructure are to be blamed for sharp fall in investment.
"We have huge mineral resources like gas and coal but we can't use those. The incentives given by the BoI to both local and foreign investors are enough to attract investment but fail due to lack of necessary power and gas supply."
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Abdus Salam Murshedy told this correspondent yesterday that global recession also created a negative impact on investment flow.
He said gas and power are prerequisites for new investment, but the finance minister recently said that no new connection of these utility services would be given in the near future.
Murshedy further said the government has to make it clear the timeframe when the existing industries would get 100 per cent supply of gas and electricity. Besides, the government has to give projection if new economic zones or garment villages would be given permission in the near future, to attract both local and foreign investment.
Prof Abu Ahmed of University of Dhaka said widespread extortion, political unrest and incident like the BDR mutiny kept the investors away from new investment in 2009.
"The ongoing drought in investment will raise the number of unemployed people resulting in social unrest," he said.
Ahmed said the government will have to improve law and order stop political extortion and allow administration to function without interference to bring about a positive change in this field.
Abul Barkat, a teacher of University of Dhaka said unless a pro industrialisation mindset is created among the politicians, massive investment will remain a far cry.
Executive Director of Centre for Policy Dialogue Mustafizur Rahman said job creation is a must in this present situation of global economic change. To this effect the government has to accelerate investment both from local and international level, he said.
http://www.bangladesh-web.com/view.php?hidRecord=299622