Pandemic spooked businesses everywhere from investing

Amid the pandemic, 918 local and foreign entrepreneurs made investment proposals worth $7.1 billion in 2020, down by half, as the coronavirus restricted people’s movement and hindered the exploration of new investment opportunities in the country. 

The proposed investment would create employment opportunities for about 1.30 lakh people in the country, according to data from the Bangladesh Investment Development Authority (BIDA).

Of the total investment, 806 were local investors, whose proposals amounted to $4.9 billion, down 51.7 per cent year-on-year.

On the other hand, 112 fully foreign-owned companies and joint venture companies made investment proposals of $2.26 billion, down from $4.65 billion a year earlier.

“Investment decisions depend on the prevailing economic situation as well as the investment climate of the country,” Sirajul Islam, executive chairman of the Bangladesh Investment Development Authority (BIDA), told Dhaka Tribune. 

Since March last year, Bangladesh and the global economy have gone through a turmoil, which was not conducive to making investment decisions.

“Businesses were in uncertainty about the recovery and the future. Plus, people’s movements were restricted, so businesses were not willing to invest without making physical visits to Bangladesh.” 

However, the damage is not as severe as expected due to the government’s response to tackling the economic fallout, Islam said.

“Global foreign direct investment declined by 42 per cent but we have been able to retain our investment,” he added. 

Between January and September, FDI inflows stood at $1.7 billion, down 19.4 per cent year-on-year, according to data from the Bangladesh Bank.

On the other hand, global FDI collapsed 42 per cent last year to an estimated $859 billion, as per the United Nations Conference on Trade and Development (UNCTAD).

However, economists called for gearing up investor confidence by taking bold measures to attract more investment in the post-Covid-19 era.

There will be new investment opportunities for Bangladesh and to cash it the government has to remove barriers and improve the business climate to lure both local and foreign investors, said Ahsan H Mansur, executive director of the Policy Research Institute.     

“We have the opportunity to attract the investment that is being relocated from China as well as Chinese investment,” he added.

Business people also said they did not move for expansion as well as fresh investment as they had to bear extra expenses for doing business thanks to the pandemic.  

“More or less, every successful entrepreneur had a plan to expand their business, while others had new investment plans,” said Abdus Salam Murshedy, president of the Exporters Association of Bangladesh.

But they did not do so as the demands for products fell both at home and abroad.

“Since the vaccination drive has started, we are hoping for a better business environment at home and abroad. The new investment will flow in soon,” he added.