Private sector investment in the country has virtually come to a halt in the recent days due to the prevailing political unrest, industry insiders said.
According to them, entrepreneurs are in a dilemma over making fresh investments and undertake business expansion plans as frequent hartals and blockades have already created an adverse impact on the country's trade and industrial activities.
 "The country's present environment is not at all investment-friendly which forced entrepreneurs to adopt a wait and see policy," Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Kazi Akram Uddin Ahmed told the FE.
He said the unstable political situation has been taking a toll on the fresh investments or expansion plans.
The FBCCI chief said, "Unstable political situation is not a good sign for any country's economy. So the investments are declining."
He said, "Now all the banks have huge amount of idle money but entrepreneurs are not borrowing mainly due to frequent shutdowns and vandalism."
The FBCCI president said the foreign investors have totally halted their new investments and the local investors are also losing interest for the same reason.
"We had seen a positive growth in investment for the last two years, but the latest confrontational political situation broke the continuity," he added.
Bangladesh Bank (BB) data showed in October last that import orders for capital machinery came down to $168.28 million from $173.77 million.
Executive Director, Policy Research Institute of Bangladesh (PRI) Ahsan H Mansur told the FE that the businessmen were facing gas and electricity crisis for a long time but restive politics is now the main obstacle for new investments.
He said all business activities including export, import and investment have drastically slowed down for unstable political situation.
Mr Mansur said the primary requirement for any investor is a stable political environment, but the present situation is far from it. So people are losing interest in making fresh investments.
He said, "The government has set a target of 7.2 per cent gross domestic product (GDP) growth for fiscal 2013-14 but I don't think it can be achieved".
Investments have witnessed a decline by 60 per cent compared to that of the corresponding period last year, according to Board of Investment's (BoI's) January-November 2013 data.
Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told the FE that during the last two years the investors were facing shortage of infrastructure, gas and power but now investments have plummeted due to the volatile political situation.
He said if the political unrest persists then investments may face further decline.
The foreign and local investors will go away if the present situation does not change quickly, Mr Murshedy added.
Bangladesh Textile Mills Association (BTMA) president Jahangir Alamin told the FE that their supply orders had dropped by 60 per cent due to political uncertainty in the last six months.
He said the investors need healthy political environment for smooth production but now the country is passing through a volatile situation.
Meanwhile, employment generation also plunged by 50 per cent during the first four months of the FY 2013-14, according to BoI data.
Private sector investment virtually comes to a halt
Shah Alam Nur | Published: December 26, 2013 00:00:00 | Updated: November 30, 2024 06:01:00
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