Despite the second wave of COVID-19’s onslaught, Bangladesh’s GDP grew by an astounding 6.94% in FY 2020–21. The final result is 1.51% higher than the first estimate (5.43%), and it is significantly higher than what the World Bank (5%), IMF (4.6%), and ADB (5.5%) had predicted.
The industrial sector’s recovery, the uptick in exports, better revenue collection, and massive inward remittances are all responsible for the growth. Throughout the epidemic, the government maintained the economy’s functionality and movement with the help of several stimulus packages.
The BBS reports that the industrial sectors thrived, and agriculture did well. Then came the Ukraine war, and the world economy again got disrupted. But Bangladesh feasibly confronted the crisis, paving the way to a newer form of increasing FDI, investment, and registered companies.
In comparison to the same period in FY 2020–21, Bangladesh’s total merchandise export grew by 30.34%, from $22.67 billion to $29.54 billion. According to data from the EPB, total export revenues also came in 16.17% over budget. RMG generated $23.98 billion, a 30.3% increase over the same time in the prior FY.
But Bangladesh must search for newer sources to increase FDI, investment, and registered companies to secure stability and sustainability and ensure diversity to confront situations like the war. The next sections will shed light on it.
The Bangladeshi government actively seeks foreign investment (GOB). Among the sectors having active foreign investment are agribusiness, apparel/textiles, leather/leather goods, light manufacturing, electricity and energy, electronics, light engineering, information and communications technology (ICT), plastic, healthcare, pharmaceuticals, shipbuilding, and infrastructure.
The GOB offers a variety of investment incentives under its industrial policy and export-oriented economic strategy, with few formal distinctions between foreign and domestic private investors. Bangladesh may also become the world’s next outsourcing hub.
Improving the investment climate
The Bangladeshi government can foster a positive business environment by decreasing corruption, streamlining laws, and enhancing the infrastructure for investors. This entails streamlining the company process, cutting red tape, and fostering a steady and predictable corporate climate. A welcoming investment environment will draw more capital and open up chances for regional firms to expand and prosper.
Diversifying the Economy
Bangladesh’s economy has historically been driven by the textile, apparel, and agricultural industries, but in order to attract more foreign direct investment, the government should concentrate on diversifying the economy and promoting investment in other fields. This might apply to industries like technology, clean energy, medicine, and tourism. Bangladesh can use this to draw in new business ventures and investors as well as lessen its reliance on a particular industry.
Encouraging Investment in High-tech Industries
Because of its educated workforce and ability to market itself as a desirable location for high-tech businesses like medicines and information technology, this will not only draw in investment from international corporations but also contribute to the development of a more inventive and dynamic economy.
Fostering Partnerships with Other Countries
Bangladesh can collaborate with other nations to attract more investment from these nations. For instance, because of its strong ties to China, the nation may be able to entice Chinese businesses to invest thereby providing tax breaks and other benefits. Bangladesh can also collaborate with other nations in the region, like Japan and India, to attract more foreign investment.
Improving Access to Financing
The government of Bangladesh may assist local enterprises and promote investment by enhancing access to financing, which is a crucial aspect in luring investment. This can be accomplished by creating a robust banking industry and investment-friendly regulations, such as tax breaks for foreign investors. To help enterprises find money, the government might also encourage the growth of regional capital markets like the stock exchange.
Providing Support to Local Businesses
The Bangladeshi government should concentrate on fostering local company growth and support in order to increase FDI. Giving people access to money, education, and other resources falls under this category. In doing so, the nation will become a more appealing location for investment, and local enterprises will be better positioned to compete with foreign corporations.
Promoting the Country’s Image
Bangladesh may attract more FDI by enhancing its reputation as a secure and desirable location for investment. This can be accomplished by emphasizing the nation’s advantages, such as its expanding economy, educated workforce, and welcoming investment environment. To further boost the nation’s reputation, the government can attempt to address issues like political stability.
Bangladesh has a skilled labor force, but entrepreneurship education needs to be promoted to inspire more people to launch firms. To offer training and assistance to entrepreneurs, the government can collaborate with academic institutions and commercial organizations. As a result, there will be more registered corporations, and current enterprises will be able to expand.
Encouraging Foreign Investment
Increases in foreign investment may be a major factor in the growth of registered businesses in Bangladesh. The government can promote foreign investment by providing tax breaks and other incentives to international investors. Bangladesh can also collaborate with other nations in the region, like Japan and India, to attract more foreign investment.
Regulating the Business Environment
The business climate needs to be regulated in order to promote entrepreneurship and expand the number of registered businesses. The government can accomplish this by establishing just and open regulations and vigorously enforcing them. Businesses will benefit from a level playing field and more competition, which can spur innovation and growth.
All these cumulatively bring economic growth, entrepreneurship, foreign investment, employment opportunities, government revenue, and an improved business environment. Bangladesh can diversify its economy and ensure that there will be an upsurge of domestic organizations which promote FDI, investment, and registered companies. It will give stability to the region also.