'Bangladesh's future hinges on knowledge, not cheap labour'

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FE Report
Executive chairman of Board of Investment (BoI) SA Samad Thursday said Bangladesh should turn to knowledge-based economy, moving away from traditional growth path, driven by industry.
"Sometimes, labour is too costly if we consider the productivity of workers," Mr Samad said.
"I think, it's time to move to knowledge-based, high-tech industrialisation, going beyond the production system primarily based on low-cost labour. Low-skilled workers have lower productivity and the companies end up paying higher," he told the concluding session of an investment conference in the city.
The Board of Investment (BoI) and Policy Research Institute of Bangladesh (PRI) jointly organised the conference in the city, which focused on private investment.
Mr. Samad who is the executive head of the state investment promotion agency said unlike exports, imports and foreign aid, investment is a complex issue. "Investment dollar is hard to earn. It's easier to get foreign aid," he said.
There is no guarantee or little possibility that some of the investments lost by China could find their way back into Bangladesh, he added.
"Those are more likely to go to Vietnam, South Korea, Malaysia or Japan. It's not that capital surplus moves to nations facing capital deficit. Instead, we found, richer countries control bulk of the world's foreign investment flows," Mr. Samad told the conference.
The BoI executive chairman said he is not a believer in "blind" country promotion as he noted foreign investments are often driven by supply.
Mr. Samad disputed with the argument of an IFC official who presented the case for a platform of discussion between the government and the private sector, saying the Better Business Forum has lost its relevance since it was formed to restore business confidence during the military regime that hit the bottom.
Mr Papanek, an Emeritus professor at Boston University, said Bangladesh could draw US$10 billion in foreign investments in a couple of years by exploiting its vast army of cheap labour.
"It's feasible in the short term-may be in a couple of years," he told the audience including businesspeople, donor representatives and officials.
Awami League lawmaker MK Alamgir said the country needs to frame a foreign exchange policy, saying otherwise investments would not come.
He also favoured providing transit to India and said Bangladesh couldn't sit idle while the rest of the world is opening up.
The editor of The Financial Express, Moazzem Hossain, managing partner at Asian Tiger Capital Ifty Islam, vice president of Metropolitan Chamber of Commerce and Industry (MCCI) Syed Nasim Manzur and Syed Akhtar Mahmood of the International Finance Corporation were panelists at the conference.
Moazzem Hossain said Bangladesh has a unique opportunity in the post-crisis global economy and the country must seize it to accelerate economic growth.
"Opportunities can only be seized if there is a synergy of actions to address the challenges that Bangladesh faces," he said, citing power and gas crunches as major drags on its economy.
Nasim Manzur saw no problem in Bangladesh's poor governance so far as foreign investment is concerned, saying high-risk environment has created a high-return condition for foreign investors.
"If you were already in Singapore, you wouldn't invest in Bangladesh," he said as he spoke as a panelist at the seminar, moderated by chairman of PRI Zaidi Sattar.