Smart companies considering doing business overseas want certainty and security as political violence and electoral instability scare them, US Ambassador to Bangladesh Peter Haas said on Tuesday.
They will also certainly want to see certain things, including a developed transportation system, consistent access to power and water, and a well-trained workforce, he noted at the annual general meeting of the International Business Forum of Bangladesh at a city hotel.
The US envoy also said international companies and investors must become more aware of the opportunities Bangladesh presents and the country must be ready to welcome American businesses.
The US wants to help Bangladesh improve its business climate so that it can attract more international investors, he pointed out.
Charles Whiteley, ambassador and head of Delegation of the European Union (EU) to Bangladesh, said preparing for quick access to GSP Plus in the EU market is the next big factor for Bangladesh's future economic development.
Bangladesh now enjoys duty-free facilities under the EBA scheme of the EU market, but that will be phased out in 2026 when Bangladesh graduates from the LDC status. Bangladesh can then be entitled to GSP Plus, which, however, requires certain conditions to be met.
"So, we will be doing everything we can in the next 4-5-6 years to work with Bangladesh to ensure this transition," the EU envoy noted.
The US ambassador said, "Clearly, Bangladesh has a lot to offer international businesses. But the other question is: Is Bangladesh ready to welcome investors, facilitate their entry into the market, and make life as easy as possible for those who have already invested?" he asked.
"As Bangladesh graduates to middle-income status, it will find it has many competitors also hungry for international business. It is one thing to build a special economic zone, but that alone is not enough to attract the best investors," he added.
He mentioned that a company does not want to be taxed more rigorously or investigated more thoroughly than its local competitors.
"How does Bangladesh compare with its competitors when these are the questions asked? Can Bangladesh assure investors that the cancerous effects of corruption are less prevalent here than in other markets?" he also said.
"Can Bangladesh say it fully understands the impacts of proposed regulations on business and that it actively seeks stakeholder input before putting them in place? Can Bangladesh say it has an adequate legal framework within which businesses can operate when it takes years to schedule a hearing?
"These are the questions that American and international companies will ask themselves before deciding to do business in Bangladesh. Luckily, Bangladesh has committed to addressing these issues," he added.
The US is already the largest foreign direct investor in Bangladesh. "And we are Bangladesh's largest export destination."
Many US and international businesses want to expand in the region, he also said, adding, "And we want to help Bangladesh create a business climate that is as welcoming as possible to foreign investment, the envoy said.
"As a testament to the importance we place on growing our trade and investment relationship, the US embassy will welcome our first ever full-time attaché from the US Department of Commerce very soon."
This step – frankly long overdue – will provide a direct liaison between US and Bangladeshi businesses.
The US-Bangladesh Business Council also brought a high-level delegation to Dhaka in May to explore business opportunities.
"And we are looking forward to a US-Bangladesh Trade and Investment Cooperation Forum meeting later this year," the US ambassador said.
Dr Zaidi Sattar, chairman of the Policy Research Institute of Bangladesh, at the programme said weak governance, high non-payment loans in the banking system, low tax effort, high protection undermine export diversification, and high export concentration in a single product group, RMG, are the current challenges of the Bangladesh economy.
Investment climate and a lack of trade openness are not welcoming for foreign direct investment, he also said, adding that weak governance leads to high costs of doing business here.