Rise in industrial unit registration brightens investment growth chances

Bangladesh may expect a surge in investment as the number of businesses registering for industrial units in the second quarter of 2021 has shot up.

Faysal Atik Staff Correspondentbdnews24.com
Published : 23 August 2021, 09:34 PM
Updated : 23 August 2021, 09:34 PM

As many as 184 local and foreign organisations have registered with Bangladesh Investment Development Authority, or BIDA, with proposed investments totalling Tk 141.28 billion from April to May.

Once set up, the industrial units are expected to employ around 39,000 people.

The number of companies seeking to set up plants was 46 in the same period last year with a total proposed investment worth nearly Tk 56.84 billion.

The second quarters of both 2020 and 2021 have been marked by lockdowns over the coronavirus pandemic. Although the pandemic situation is much worse in Bangladesh this year, the global and local economies are turning around.

Meanwhile, the authorities and the businesses appeared to have learnt to continue their jobs amid the crisis, with vaccination gearing up and awareness increasing to prevent the COVID-19 disease.       

Professor Selim Raihan, executive director of South Asian Network on Economic Modelling or SANEM, sees the proposed investment as a positive sign, but believes Bangladesh has much to do to seal those investments.

“Many register with BIDA, but they cannot finally invest due to complexities and obstacles. We'd seen in the past many investments did not succeed due to challenges related to policy, bureaucracy and infrastructure.”

“So, we should focus on how much proposed investment is actualised.”

He also believes the authorities should prioritise supporting the businesses that contracted due to the pandemic instead of creating new ones.

A SANEM study of 500 small to large industrial organisations in April found 57 percent of them, mostly large ones, had recovered from the impact of the pandemic crisis. “We should focus on recovery,” said Prof Raihan.

A large portion of the foreign investments proposed in the April-June period was in the leather and leather products industry.

Bangladesh, however, would not expect much from these investments, Prof Raihan pointed out, because the leather processed in Bangladesh cannot be used to make shoes for export due to a lack of compliance.

“We still need to export shoes made from imported leather. We must remove this problem if we want successful investment in this sector,” he said.

Out of the 184 investment proposals for investment in the second quarter of 2021, 12 came from foreign organisations, 14 were joint venture and the rest from local companies, mostly in the chemical sector.