Objective of the report:
The Bangladesh paradox has been one of surprising economic resilience in the face of natural disasters, poor governance and political volatility.
However, a key challenge is whether Bangladesh can move away from an economy that is an impressive underdog, to one that can truly join the ranks of the fastest growing economies in the region.
Bangladesh has three key attractions for global investors and multinationals: a large base of low-cost labour, a large domestic market of 150mn people, and nearly 3bn people in the Asian region that it has market access to.
The aim of this paper is to provide global investors with an outline on the challenges and prospects for the Bangladesh economy as well as investment opportunities.
The fact that Bangladesh is lagging in the economic development chain is a potential advantage for policymakers in terms of the ability to learn from the experience of other countries.
Vietnam saw its FDI increase from USD 2bn in 2000 to an estimated USD 20bn in 2007. It is important that Bangladesh can attract similar long term investment flows that will help build the infrastructure and productive capacity of the economy.
We believe it is realistic for Bangladesh to achieve a similar tenfold increase over a seven year period, increasing FDI from a projected USD 700mn in 2008 to USD 7bn by 2015.
The growth of private equity firms (those that invest in non-listed securities) can positively impact Bangladesh’s ability, not only to attract FDI, but also to improve manufacturing productivity.
A dynamic private sector and a substantial increase in FDI flow is likely to fail to deliver the kinds of economic growth gains Bangladesh need’s to become ...