StanChart wants to be catalyst for bringing in more FDI

Group chair optimistic of BD economy

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Mehdi Musharraf Bhuiyan | Published: October 27, 2018 22:53:13

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The ongoing "trade war" between the United States and China can offer both risks and opportunities for countries like Bangladesh, group chairman of Standard Chartered José Viñalshas said.
"This trade war does not have any winner, it only has losers," Viñals, who was on a visit to Dhaka last week, told a group of reporters during an interview.
Bangladesh is not that much connected to the China supply chain. So, one could think that if China trades less with the United States, there may be an opportunity for Bangladesh to export more as a result of this, he said.
However, one needs to be mindful of the fact that if this trade conflict dents global confidence, this is going to reduce global demand everywhere, he added.
He was referring to the possible impact of this trade war on countries like Bangladesh.
The demand for all products exported by all nations including Bangladesh will be going to the negative direction, he cautioned.
So, I think that one should be very careful. There may be some opportunities but there are also some risks, the group chief of the global financial giant noted.
When asked whether this trade war would result in businesses getting relocated to Bangladesh from China due to the former's advantageous position in terms of tariffs, Viñals said that such a scenario is unlikely in the short term.
It is possible that there would be some delocalisation of production to countries like Bangladesh which are not subject to trade restrictions or tariffs, he said.
However, he argued, delocalisation of production takes time because it needs investment, manpower and commercial structures.
Viñals, who has worked for the International Monetary Fund (IMF) before joining Standard Chartered, was, however, optimistic about Bangladesh and its economy.
My visit is a signal that how important Bangladesh is for Standard Chartered, he said.
Bangladesh is an economy with tremendous potential and that potential needs to be realised," he added.
"We are in the prosperity business -- and that's what we are trying to do in Bangladesh -- to make the country more prosperous."
The Standard Chartered group chief said his bank wants to be a catalyst for bringing more foreign direct investment in Bangladesh.
We want to act as a bridge between Bangladesh and the rest of the world by bringing in more of the foreign direct investment this country needs, Viñals said.
We want to help Bangladeshi companies become more global and make the global companies come here.
However, he identified several prerequisites that are critical to drawing more FDI into the country.
It is critical to have a business-friendly environment where domestic and foreign investors feel that they have stability, predictability, necessary infrastructure and right skills.
"It is important to have an institutional framework that is regarded as solid by the foreign investors," he added.
The fact that Bangladesh is at the 177th place in the Ease of Doing Business ranking of the World Bank is a testimony to the fact that how much change is needed, he observed.
The Standard Chartered top boss laid special emphasis on enhancing the country's skill base for attracting more investments.
At the end, the most important asset that a country has is its people. And Bangladesh has lots of people. But you have to equip them with the tools to deliver on this fantastic demographic dividend.
Let us not forget that with the ongoing fourth industrial revolution, skills of the new economy are not going to be the same as the skills of old economy, he said.
Businesses will need to recruit people that are fit for the new production world, he added.
When asked about the possible solutions to the ongoing difficulties in the local banking industry, Viñals, who was also the deputy governor of the central bank of Spain during his long illustrative career, called taking a long term approach in solving such problems.
A strong banking system is important for sustaining growth, he said, adding the problem needs to be tackled as soon as possible.
"But most importantly, you should not only solve the problems of the past, but you should also make sure that these problems do not reappear in the future".
So, it is critical to providing sufficient time for the problems to be addressed in a way which provides permanent solution, he added.
Headquartered in London, Standard Chartered has a strong presence in the banking scenario of Asia, Africa and Middle East.
In Bangladesh, it has more than a hundred years' presence and currently operates through a network of 26 branches and booths and 83 ATMs while employing over 2,000 people.
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