Trade summit yields $1.16b in intended investment

A trade summit meet Bangladesh just hosted yielded investment interests worth US$1.16 billion in various sectors of the country from investors, besides spotting potential exports, sponsors said.

The second-major outcome of the weeklong Bangladesh Trade and Investment Summit 2021 is that 26 products have been identified as potential exports from the country that is expected to help in much-needed export diversification to widen its slim export basket.

Under the focus are sectors like infrastructure, pharmaceuticals, baby bottle, umbrella, agro-and food- processing, and IT.

At the investment summit, jointly organized by the Ministry of Commerce and Dhaka Chamber of Commerce & Industry (DCCI), 20 companies from 13 countries showed their interest in undertaking joint ventures for putting in their money.

DCCI president Rizwan Rahman Monday shared the outcomes of the summit wherein 552 local and foreign companies from 38 countries participated in 369 B2B (business-to-business) sessions.

"The potential investment-interest size in the summit was US$1.16 billion. Of the interest, one Chinese company has expressed its interest to invest US$ 1.0 billion in railway infrastructure," he said.

They found huge demand for export of 26 Bangladeshi products to 14 countries while 5 countries showed their interest in direct investment in Bangladesh.

Power, energy, renewable energy, dairy products, FMCG, RMG, leather, automobile and jute are some of the sectors that have foreign investment opportunities, the business leader told the media.

In terms of potential joint-venture partners, he said, they mostly come from Asia and the Pacific region wherein the future of global economic growth lies.

He said various industries are moving out of China that Bangladesh needs to capture as many as possible.

"Don't forget, we have failed to attract Chinese sunset industries earlier. Now, this is our time because Bangladesh has shown they are the champion in terms of economic recovery," the DCCI chief said.

To net expected outcomes in the area of trade and investment, he underscored the need for improving ease-of- doing-business ambiance, policy reforms, technology adaptation, skills development, fiscal and non-fiscal incentives, strong economic diplomacy and signing FTA or PTA with potential trading partners.

Mr Rahman notes that Bangladesh has the ability to grab the huge opportunity from African, Asia-Pacific and Middle- Eastern countries in terms of inward or outward investments.

"The most important thing is to enhance our export- competitiveness on the global market after the LDC graduation," he said.

Although Bangladesh is already a member of some regional blocs like SAFTA, APTA and D-8, the country needs to go for PTA or FTA with other major trading partners, according to him.

Replying to a few questions from the journalists, Commerce Secretary Tapan Kanti Ghosh said Bangladesh after LDC graduation may need to sign FTA or PTA with potential trading partners like EU countries, the UK, Canada, Japan, Australia etc.

But averaging duty structure on both sides is a critical thing before going for FTA, he said, adding that "the average duty is around 15 per cent while the average duty structure in countries with whom we are planning to sign FTA is hovering in-between 3.0 per cent and around 6.0 per cent".

"If these countries cut 6.0 per cent, we have to cut down 15 per cent as the main objective of FTA to bring down the duty to zero. So, it could result in huge revenue loss for us. I think we need to cut the duty gradually," he said.

For FTA, a drastic duty cut is not possible as it may hamper internal revenue generation and local manufacturers but it may be considered gradually, he added.

Besides, the trade official suggests, the government has to be calculative in reducing the duty to zero so that overseas products do not hamper prospects of local industries.

"It is the duty of the government to safeguard the interests of local industries. It will be challenging but the government is working on this matter," he told the reporters.

Regarding ease of doing business, he said the government is trying to bring all its major services, for instance, land registration, mutation, and company registration, in joint stock companies under automation that will ease the process in the near future.

Addressing a separate question, he said that the government will surely consider the demand for an economic zone especially dedicated to the leather industry as demanded by the businesses at the summit.

"Some eight to ten special economic zones are functional while others are in developing stages. We can choose one of them in a suitable location because leather and footwear is the second-most export-earning sector. We will certainly work on it," the commerce secretary said.

Regarding the businesses plea to replicate successful RMG model to enhance competitiveness in other potential sectors, the commerce secretary said bond facility plays a key role behind apparel industry's boom here.

"We're trying to replicate it but there are products that are not cent-percent export-oriented. In that case, it is problem to implement because it might cause leakage in revenue collection," he said on the flipside.

At the same time, he added, if the industries riding on the bond facility used the raw materials for domestic consumption, it would severely hamper growth of the local industries concentrating on domestic market.

"So there are huge complexities, we need a right balance. The government is working on it but it might take time," he added.

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