A NEWS report published in this daily on Saturday said foreign investors are hesitant to come to Bangladesh and many existing investors are trying to pull out. Moreover, local investors have become increasingly hesitant to invest due to the present political uncertainty in the country. It said the situation may turn into a crisis if the slowdown in investment from local and foreign investors continue amid growing political tensions.
Bangladesh achieved a significant growth in Foreign Direct Investment (FDI) in 2012, according to World Investment Report (WIR) published by UNCTAD when the net inflow was reported at US$1.292 billion. It was 13.7 percent higher over the previous year's FDI which was reportedly at US$1.136 billion. But the prospect for the current year is fading away, mainly due to a fear of political violence in the coming months.
Quoting business leaders the report laid emphasis on taking quick initiatives to resolve the problem through discussion to find a way to peacefully hold the next general election. Business leaders now openly wonder whether Parliamentary elections would at all take place and such uncertainty is only discouraging new investment and the expansion of existing plants. President of Dhaka Chamber of Commerce and Industry (DCCI) Sabur Khan fears the prospect of a severe political backlash as a hindrance to new investment. He said a big Japanese business delegation has already cancelled its forthcoming visit to Bangladesh and it means loss of opportunities for new investment in the economy.
Even small investment decisions by local business is heavily weighed now against political risks, he said. The Metropolitan Chamber of Commerce and Industry (MCCI), which is also a very powerful business chamber has voiced similar apprehensions saying that the political violence and frequent shutdowns are fuelling instability and inhibiting growth. Pointing to a sharp fall in the first ten months of FY13 in the import of capital machinery, industrial raw materials and intermediate goods; which are indicators of new industrial activity in the economy Bangladesh Bank has produced a dismal picture in this regards in recent reports. It also partly explains why the reserves at the central bank are rapidly accumulating.
Given the prevailing situation the government target for 7.2 percent growth in fiscal 2013-14 may also become uncertain. Inflation may become unrestrained and government increasing borrowing from banks may add further tension in the money markets pushing interest rates up to make new investments more risky.
The risks to business and the economy from political violence are known to all. But the question is that our political leaderships are walking on a destructive track instead of pursuing politics which is business friendly and supportive to encourage local and foreign investors to work on economic expansion and bring prosperity to the nation.
Politics itself has become a business to most politicians and to their cadres, especially to the ruling elite who are minting illegal fortunes by way of extortion, corruption and exploiting the government budget. They continue to increase their wealth even in the midst of a volatile political situation. The fact that a growing economy and business create new jobs and generate incomes for the poor and middle income people is something that does not bother them much. It explains our present political situation. We hope our politicians will realize the truth and revert to the politics of rationality and sublimate their negativity for the greater interest of the nation.