TDS Desk:

Investment proposals fell nearly 72% in the July-September quarter from the previous three-month period, thanks to the July-August political upheaval and subsequent uncertainty over the new government’s economic policies.

Investors are now on a wait-and-see approach, believes experts including Dr Zahid Hussain, former chief economist of World Bank’s Dhaka office.

Economists and industry insiders have said investors base their investment plans on long-term economic outlook. They are still unsure about the duration of the current interim government’s policies, which are still emerging. There is also uncertainty over how long the government would stay in power, as government changes also decide the fate of economic policies.

As a result, Dr Zahid has noted that greenfield investment proposals were very few in the July-September data. The majority of those who did submit proposals already had factories and other business establishments in Bangladesh, the veteran economist commented.

There is no alternative to investment in sustaining and growing a national economy. However, in Bangladesh, bureaucratic red tape, land scarcity, poor infrastructure, fuel shortage, and most importantly repeated changes in government policies as well as the lately short-interval political shakeups have repeatedly discouraged investors.

According to data from the Bangladesh Investment Development Authority (BIDA), during July-September last year, investment proposals amounting to approximately Tk19,552 crore for 153 domestic projects and Tk2,433 crore for 33 foreign projects were submitted. These proposals were estimated to create employment opportunities for 52,702 people through domestic investments and 2,679 people through foreign investments.

Among the data for July, a combined total of Tk13,707 crore investment from domestic and foreign sources was proposed. However, this amount decreased to approximately Tk3,089 crore in August, following the ouster of Awami League authoritarian government and the formation of an interim government. In September, it rose slightly to Tk5,188 crore.

On the other hand, during April-June 2024, investment proposals were submitted for 220 domestic projects worth Tk74,715 crore and 34 foreign projects worth Tk2,648 crore. According to sources at BIDA, these proposals are expected to create employment opportunities for 47,105 people.

According to related sources, the highest number of investment proposals was received in the service sector, followed by the chemical industry, food and related industries, engineering industries, and the textile sector.