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Enhance investment climate to attract greater FDI

US diplomat suggests

FE REPORT | September 22, 2023 00:00:00

The monthly luncheon meeting of American Chamber of Commerce in Bangladesh (AmCham) was held at a hotel in the city on Thursday. Commercial Counselor at the US Embassy John Fay, AmCham President Syed Ershad Ahmed and its Vice President Syed Mohammad Kamal spoke at the event.

A number of disincentives are hindering the inflow of more investments from the United States, a US diplomat said on Thursday, stressing the need for improving Bangladesh's investment climate.

He listed challenges of payment systems, inability to repatriate earnings and revenue, non-transparent rules and inadequate enforcement of property rights, among others, as the limitations that discourage foreign direct investment (FDI).

He also pointed out that significant logistics and transportation infrastructure gaps also exist in the country, further affecting and slowing down trade in goods between the two countries.

John Fay, commercial counselor at the US Embassy in Dhaka, made the observation at the monthly luncheon meeting of American Chamber of Commerce in Bangladesh (AmCham) at a hotel in the city.

He suggested that Bangladesh should improve its investment climate to attract more US investments in sectors like healthcare, IT, education, energy and infrastructure.

AmCham President Syed Ershad Ahmed and its Vice President Syed Mohammad Kamal, among other members of the chamber, foreign dignitaries and business leaders, also spoke at the event.

Mr. Fay said the US companies have brought in here the largest FDI amounting to US$ 4.0 billion, demonstrating their strong interest in the country.

"However, the (challenging) issues limit Bangladesh's ability to achieve its full trade potential and they create disincentives for additional foreign investment."

If the sectors like healthcare, IT, education, energy and transportation are developed correctly, these can be valuable investments for Bangladesh's future as it graduates to middle income status to get to the next level of prosperity, he added.

"Our office and the US Embassy stands ready to assist the US firms in Bangladesh in dealing with market access issues and I sincerely believe that by helping them overcome them (challenges), we also will be able to help the overall Bangladesh trade and investment climate," Mr Fay said.

At present, the US-Bangladesh bilateral trade stands at around $14 billion that remains very concentrated on specific sectors - Bangladesh's exports are almost fully on apparel and the US's on steel and agriculture.

In 2022, Bangladesh fetched $ 10.04 billion from textile and apparel exports to the US, the country's single largest export destination.

AmCham President Syed Ershad Ahmed said: "We believe that the trade and investment potential between Bangladesh and the US has not yet been fully tapped."

To unlock the opportunities, he suggested evaluating where the opportunities lie, identifying obstacles, learning from other countries, and strategising on how to maximise potentials for the US stakeholders.

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