Foreign investors no threat to Bangladesh, says US envoy

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FE Report
Bangladesh should not see foreign investors as threat as the country would require more investments to generate jobs and bring in sophisticated technology, US ambassador James F. Moriarty said Sunday.
"The new government should realise that foreign investors are no threat …," he said.
"Foreign investment helps create jobs, foster technology transfer and bring in management skills. It also fuels economic growth," he told a luncheon meeting in the city.
The US envoy's comments came months after the army-backed caretaker government refused to allow India's top conglomerate Tata Group to invest nearly $3.0 billion in steel, power and coalmines.
A number of big investment proposals including UK-based Asia Energy's coal mine development plan have remained pending for several years.
Despite having one of the most liberal investment policies, economists say the annual flow of foreign direct investment (FDI) has remained pitifully low compared to its regional peers such as India, Pakistan and Vietnam.
In the first seven months of the current financial year, the country received only US$764 million in FDI, the annual flow of which never surpassed $1.0 billion in the country's history.
The more dismal picture is evident in portfolio investments flow. In the July-March period, foreign portfolio investors channelled a minuscule $67 million in the country's capital market.
Referring to the worsening global economic crisis, the US ambassador said that people around the world including Bangladeshis are concerned about the impact.
He added that Bangladeshi people wonder about the prospects of decreasing exports and remittance flows.
The US remains the country's biggest export market. It is also the second largest source of Bangladesh's annual remittances after Saudi Arabia.
"This is a time of great uncertainty; as both the United States and Bangladesh face difficult economic and political challenges, while also striving for a more secure world," the US envoy told members of Foreign Investors' Chamber of Commerce and Industry (FICCI).
Mr Moriarty said that the crisis in the financial and housing markets has affected the economy in almost every country including Bangladesh.
He, however, noted that his country was doing its part to respond to the crisis by getting the world's largest economic powerhouse moving again.
President Obama has just signed into law a $787 billion fiscal stimulus package of tax cuts and spending initiatives aimed at jump-starting the economy.
He said the just-concluded G-20 meeting also pledged $1.1 trillion to restore credit, economic growth and jobs in the world.
Even though Bangladesh was not a participant in the just-concluded G-20 summit, the ambassador said his country appreciated the role played by Dhaka as an advocate for the least developed countries in the current crisis.
He, however, said that the US-Bangladesh relationship should focus on the increasing importance of trade, not aid.
"As the Obama administration's trade team sets its priorities, you can rest assured that the US will provide due consideration to Bangladesh's desire for increased trade," he added.
He said the upcoming GSP petition review is an opportunity for the new government and the private sector to express their understanding of the need to address concerns about workers' rights in critical export sectors to ensure continued market access.
Mr Moriarty said the Bangladeshi people must decide the country's future and the shape of their own democracy.
"Democracy is not easy or painless. There will be successes and failures on the path towards a vibrant democracy. American stands by to assist Bangladesh as it moves along the path," he added.