Grameenphone row can put off foreign investors, The Daily Star, February 28, 2013
The government’s inappropriate handling of the problems faced by big foreign investors may affect foreign direct investment (FDI) flows, experts said yesterday.
“How the biggest investors are treated here in Bangladesh is crucial,” William Hanna, European Union (EU)’s ambassador to Bangladesh said, adding he has seen Telenor, Europe’s biggest investor in Bangladesh, face problems “time and again”.
“Investors talk to each other, so it is very important that the existing investors are treated right — to attract more funds.”
Recently, a commission on Grameen Bank recommended that the licence of Grameenphone, in which Telenor has a 55.8 percent stake, be suspended.
The EU ambassador said Bangladesh has the potential, but stability, predictability of business environment, a level playing field and transparency are vital to luring in foreign investors.
Hanna’s comments came at a roundtable discussion co-organised by Bangladesh Enterprise Institute (BEI) and the Asia Foundation, at the capital’s Ruposhi Bangla Hotel.
Jahangir Saadat, president of Korean Export Processing the government for 2491 acres of land in Chittagong in 1996, but mutation of the land transfer is yet to be completed.
“No lease of land to investors is possible in the absence of mutation. We have been fighting bureaucratic tangles for 17 years now,” added Saadat, a former diplomat.
Farooq Sobhan, president of BEI, expressed dissatisfaction over the delays in making KEPZ operational.
“If the government does not properly handle the telecoms sector, which attracts substantial investment, it is going to have a negative impact on FDI,” he added.
Ghulam Muhammed Quader, commerce minister, said the problems faced by big investments like the KEPZ should be solved as soon as possible.
“One of the main concerns of foreign investors is speedy dispute resolution, and the government is working on it.”
The unavailability of land to set up factories is another problem, which the government is trying to solve by establishing special economic zones, Quader said.
“It is no use asking foreign investors to come in unless we create a congenial environment,” said Barrister Anisul Islam Mahmud, a lawmaker, citing inadequate gas and electricity supply, poor road infrastructure and high cost of bank loans.
Salahuddin Kasem Khan, managing director of AK Khan Group, said the government should get the private sector on board to attract FDI.
“Plus, a stable and predictable policy is needed,” he said.
ASM Mainuddin Monem, deputy managing director of Abdul Monem Ltd, said: “Foreign investors will come on their own if we can demonstrate that we can fix our problems ourselves.”
“We only need leadership,” he said, adding that bureaucracy, policy administration and parliament should work together to bring in FDI.