Investment proposals decline in 2013

The number of investment proposals registered with the Board of Investment (BoI) marked a sharp decline in the last calendar year (2013). The fall was attributed mainly to unfavourable business environment in the country, circles concerned said.

The number of investment proposals from both local and foreign sources during the period declined by more than 27 per cent and nearly 10 per cent respectively, the data showed.

According to the BoI office, proposals for 1,197 industrial units involving an aggregate investment of Tk 424.89 billion were registered from local sources during the period as against 1,655 proposals amounting to Tk 500.00 billion a year earlier (2012).

Besides, the BoI office also registered 181 proposals worth US$ 2.62 billion from foreign investors during the period against 202 proposals that involved $2.61 billion in the corresponding period.

However, high officials at the BoI blamed political instability for the decline in investment proposals. But experts said acute shortage of gas and power and shortage of industrial plots in the country were also the reasons behind the poor interest of the investors.

Besides, higher interest rate on bank loans was also cited as the major reason for local investors being lukewarm about new ventures.

"Higher interest rate on bank loans forced many domestic investors to rethink about their prospective ventures," said former advisor to the caretaker government Dr. A. B. M. Mirza Azizul Islam.

"It is really tough for an investor to make profit with such expensive funds," he added.

"Besides, scarcity of industrial plots in and outside the export processing zones (EPZs) also put investors to great difficulty. Shortage of gas and power was added to it," Dr Islam added.

The Executive Chairman of BoI, however, expressed the hope that the country would soon revive its lost glory as soon as an investment-friendly atmosphere returns.

"We took all initiatives to attract investors from both local and foreign sources. But only due to political instability, we could not reap the positive results," Executive Chairman of BOI, Dr. S A Samad told the FE.

He said the government is trying to overcome other problems like scarcity of plots and shortage of gas and power at the earliest possible time.

"The government is now actively working to implement special EPZs along with increasing gas and power production. So we can say that the scenario would give a positive look soon," he added.  

However, among the proposals from local sources, some 82.57 per cent investment proposals were registered for industrial sector. It was followed by around 18 per cent for engineering industry, 17 per cent for textile industry, 8 per cent for food and allied sector, 6 per cent for tannery and leather industry, 5 per cent for agro-based industries and rest for other industries and service sector during the period.

Besides, of the foreign and joint venture proposals, around 75 per cent investment was also registered for industrial sector. It was followed by around 28 per cent for textiles industry, 15 per cent for chemical industry, 15 per cent for engineering industry, 12 per cent for agro-based industries, 3 per cent for food and allied sector and rest for other industries and service sector during the period.