Botched economic diplomacy and low focus on attracting foreign direct investments (FDI) are reducing job opportunities, hampering expansion of technology and hindering diversification of the country's manufacturing base, analysts said.
According to a source in an apex trade chamber, in the last three years job opportunities in foreign invested firms did not increase. There are also no new technology-based investments in the country, the source added.
The chamber leader requesting anonymity said, "Our economic diplomacy failed to attract foreign investments as per the facilities that we provide and we do have."
He said some important and promising sectors that are developing locally are yet to receive any foreign investment as initiatives have not been taken by the officials.
The current incoming FDI proposals are mainly in telecommunication, energy and textiles which do not create much employment opportunities for the young talented people coming out of universities, he said.
According to data available from the Board of Investment (BOI) in the calendar year 2012 Bangladesh received only $1.3 billion worth investments.
Data shows in the last six months of 2013 the amount was $672 million only. It goes on to add that when the full figure is available it may not cross the performance of 2012.
A trade leader analysing the FDI flow said the amount (of FDI) received in the last two years is frustrating despite the country having cheaper labour and providing other opportunities. He said such lean flow of direct investments is reducing employment opportunities. As a result latest technology is not being introduced.
He said both the government and private entrepreneurs' initiatives to attract foreign direct investment over the last decade were not enough.
"Economic diplomacy for increasing investments and export is still pretty much absent. Performances of the officials are not up to the mark," he said.
The BOI data says investments are taking place mainly in the service sector. But manufacturing sector, which could create employment opportunities, is in dire straits.
BOI executive chairman SA Samad told the FE, "Foreign direct investment is constant. It is neither increasing nor decreasing."
He said, "Political turmoil did not harm the FDI flow. We hope the new government will take initiatives to increase it."
"Land is becoming a problem. We are unable to welcome all types of investments due to land crisis," he added.
The BOI executive chairman said the privatisation board is already working to solve land crisis and is likely to recover a good amount of unutilised lands.
BOI executive member Nabhash Chandra Mandal, said, "The privatisation commission is trying to recover unutilised lands from different state owned corporations. Within a short time 1200 acres of land is likely to become available."
He said apart from privatisation commission, the economic zone authority is also trying to develop land both for local and foreign investments.
A former FICCI leader said foreign direct investments could take place in light engineering, information technology, footwear and in several backward and forward linkage sectors. He said investments in such sectors would create jobs and technology would be transferred into the country with high value additions.
The FICCI former president said once technological innovation based FDI takes place, Bangladesh will enter into new era of high value adding manufacturing sector for export markets.
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