A multi-faceted approach to promote investments

Sustained economic growth can ensure both income generation and job creation on a steady basis. For this, a multi-faceted approach is needed. Economic growth may be lower in one particular year in a certain area, say, manufacturing, from insufficient energy but that can be compensated by higher growth in agriculture and services. However, this is not to say that the government ought not to be so anxious about energy sector's development. While giving the highest priority to augmenting power supplies, it should also pay serious attention to other growth supporting factors. In the Bangladesh context, corruption and bureaucracy are also known to be big hurdles to attracting both local and foreign direct investments (FDIs). Hence, its policy-makers must make it a priority to reduce corruption at all levels of the government and to improve the efficiency of the administration. Bureaucratic red-tape must be cut down. Furthermore, poor shape of existing infrastructures or the sheer lack of them, is an impediment to investments. Government must take the lead in improving and adding to infrastructure building. Macro-economic stability is an important condition for influencing investment decisions. Government has the biggest role to play in this area by executing its policies with efficiency to retain this stability and improve on it. Foreign investors and even many local ones are sophisticated and look for markets that are friendly for the long-run security of their investments. Therefore, the risk elements -- political instability and conflict -- must be controlled to project signs of political stability long into the future. But this prospect of maintaining and enhancing political stability must not be under a stress. On this score, the government has the major responsibility of taking all necessary initiatives with patience so that this stability is maintained to provide a major stimulus for investment. If the hopes of a long-term stable and conducive environment for investments are built, the polity will entail the least of risks about any politically-induced violence. Government should also give vitally important signal to investors by retaining the good policies of its predecessors and even improving upon them or adding to them to help confidence among them about the continuity of good and useful public policies. Meanwhile, creating educated and skilled labour force should receive a befitting attention, in terms of both formulation and operationalisation of relevant human resource development programmes. There is no denying that such a workforce is the key to success for attracting investments. Hence, adequate investments in appropriate types of education and training to this end, should become a high priority. Private educational institutions have done well in some cases to create some competition for the public educational institutions that have been hopelessly mired in politics and violence. But greater importance should be attached to creating more opportunities for technical education, training and skills by increasing and adding to capacities of public institutions, particularly with an eye for the emerging economic sectors. Bangladesh can learn a valuable lesson from other high-performing developing economies where an important source of investments has been their expatriate nationals. The numbers for some such countries are undeniably important, but what matters here most is not the numbers but the pro-active attitude of the relevant policymakers to welcome their expatriate citizens. The lesson for Bangladeshi policymakers is to welcome its non-resident Bangladeshi (NRB) citizens, especially those interested in investment and business opportunities. It is clear, therefore, that there are many factors that drive investment flows. This information is important for policy-makers and should be utilized while devising multi-layered strategies to promote investments for sustained economic growth.