[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Ambitious reforms urgent for Bangladesh to attract FDI

Bangladesh urgently needs ambitious reforms to attract more foreign direct investment (FDI) and stimulate domestic private investment by ensuring better coordination among government agencies - especially on policy matters. In an interview with The Financial Express, Hoe Youn Jeong, the Asia

thefinancialexpress.com.bd

Ambitious reforms urgent for Bangladesh to attract FDI
Says ADB Country Director

Doulot Akter Mala
Published :
May 22, 2025 00:33
Updated :
May 22, 2025 00:33

Bangladesh urgently needs ambitious reforms to attract more foreign direct investment (FDI) and stimulate domestic private investment by ensuring better coordination among government agencies - especially on policy matters.

In an interview with The Financial Express, Hoe Youn Jeong, the Asian Development Bank (ADB) Country Director for Bangladesh, put forward the suggestion to avert further erosion of the already-waning investor confidence as reflected in the declining inflow of FDI.

"The government must streamline and simplify licencing and permit procedures, business regulations, and processes," he said.

The areas that deserve simplification are starting and closing businesses, technology adoption, infrastructure, logistics, cross-border trade, dispute resolution, labour laws, taxation, incentives, and finance.

In FY 2024, the FDI inflows amounted to only 0.4 per cent of GDP, marking a 71-percent fall from July to November last year, according to the ADB Country Director.

Over the past decade (2013-2023), Bangladesh's average FDI inflow stood at just 0.8 per cent of GDP, significantly lower than Cambodia (9.4 per cent), Vietnam (4.6 per cent), and Indonesia (1.9 per cent).

"The government must uphold international standards on labour, human rights, and environmental practices. Genuine reforms in these areas will enhance Bangladesh's competitiveness and reliability as a global investment destination," Mr Jeong noted.

The ADB has revised down Bangladesh's GDP growth forecast for FY 2025 to 3.9 per cent from previous 5.1 per cent, citing political uncertainty, flooding in key sectors, banking vulnerabilities, industrial unrest, and persistent inflation.

Revised export figures for FY2023 and FY2024 have further lowered the growth baseline.

"To stabilise the macroeconomy and sustain growth, Bangladesh needs bold action," Jeong asserted. "This includes diversifying the economy, enacting critical reforms, and increasing public investment in essential infrastructure."

He also called for efforts to promote entrepreneurship, rationalise tariffs, improve business climate, and build resilient urban systems and infrastructure.

As Bangladesh prepares to graduate from the LDC category in November 2026, it faces critical economic challenges.

Mr Jeong underscored the need for economic diversification, reduced reliance on imported energy, shrinking the informal sector, enhancing governance, and building resilience.

According to Bangladesh's national Smooth Transition Strategy, GDP growth may decline by 1.0-2.0 per cent post-graduation due to the loss of trade preferences, concessional financing, and special WTO treatments.

Political uncertainty and financial sector fragilities could compound the risks, he added.

"To manage the transition, we've discussed strategic actions with the interim government," Mr Jeong said.

These include designing an economic stabilisation plan, creating a framework for the FY 2025-26 national budget, advancing priority reforms, enacting a strong LDC transition strategy, and accelerating progress of the sustainable development goals (SDGs).

He said the ADB is also working with the government to address implementation delays in ADB-funded projects by improving project readiness, strengthening agency capacities, enhancing interagency coordination, streamlining procedures, and engaging more with private and development partners.

"By acting decisively, Bangladesh can manage the transition effectively and secure sustainable growth beyond 2026," Jeong said.

Regarding trade, Jeong warned that the new 37 per cent US tariff on Bangladeshi exports, particularly readymade garments (RMG), threatens export earnings. The US is Bangladesh's largest RMG market, accounting for 17 per cent of the country's total exports.

However, the full impact of the tariffs remains unclear as rates may vary and trade dynamics may shift. Much will depend on Bangladesh's relative price competitiveness and trade negotiations.

"If these tariffs negatively affect the US and EU economies, demand for Bangladeshi goods could drop, further limiting export growth," he added.

To mitigate this, Bangladesh must quickly diversify its export products and markets. The Smooth Transition Strategy identifies sectors with strong potential such as manmade-fibre apparel, pharmaceuticals, ICT, agro-processing, leather, light engineering, and shipbuilding.

Effective implementation of the National Tariff Policy 2023, the National Logistics Policy 2024, and new free-trade agreements will be vital. Bangladesh should also pursue constructive dialogue with the US to secure favourable trade terms.

"Rationalising import tariffs is essential for economic diversification. With limited fiscal space, Bangladesh cannot rely on subsidies or incentives to sustain exports," Jeong noted.

He called for removing structural barriers, encouraging innovation, and creating quality jobs. The ADB remains committed to supporting Bangladesh's resilience and competitiveness as it transitions from the LDC (least developed country) status.

"We are working with the government to expedite two proposed policy-based loans that will support key reform efforts," he said.

These loans aim to strengthen the banking sector and promote inclusive, climate-resilient development. A programmatic approach will help the government tackle complex reforms holistically over the medium term.

Jeong highlighted Bangladesh's key strengths: a young workforce (with over 65 per cent working age population), strong remittance inflows, global competitiveness in RMG, strategic location between South and Southeast Asia, and the resilience of its people.

"Upgrading seaports can help Bangladesh become a regional trade hub," he added.

To harness these strengths, Jeong emphasised the need for a comprehensive and strategic reform roadmap. Guided by the 2024 White Paper and reform commission findings, the interim government is building consensus on priority reform actions.

Reforms should focus on business regulation simplification, licencing and permit streamlining, improved inter-agency coordination, and responsible business practices aligned with international standards.

Strengthening public investment, particularly in infrastructure and essential services, is critical. Integrated development of logistics, economic corridors, energy, transport, water, sanitation, urban services, and digital transformation will support sustainable growth.

"These reforms will boost productivity, attract private investment, create jobs, and strengthen supply chains," he said. "As a trusted development partner, ADB stands ready to support Bangladesh in delivering these reforms."​

 

[Saif]

Foreign exchange reserves to reach $40 billion in next fiscal year, BB governor hopes

Bangladesh Bank Governor Dr Ahsan H Mansur on Wednesday projected that the country's foreign exchange reserves will rise to $30 billion by June, with a further target of reaching $40 billion in the upcoming fiscal year. The governor made the remarks at an event organised by the Policy Research Ins

thefinancialexpress.com.bd

Foreign exchange reserves to reach $40 billion in next fiscal year, BB governor hopes
UNB
Published :
May 21, 2025 20:09
Updated :
May 22, 2025 00:37

Bangladesh Bank Governor Dr Ahsan H Mansur on Wednesday projected that the country's foreign exchange reserves will rise to $30 billion by June, with a further target of reaching $40 billion in the upcoming fiscal year.

The governor made the remarks at an event organised by the Policy Research Institute (PRI), highlighting the central bank's outlook on the economy and banking sector.

“By next month, the reserve will be between $27 billion and $30 billion. There is a target to raise the reserve to $40 billion in the next fiscal year,” Dr Mansur said.

He also addressed the challenges facing the microcredit sector, noting that high interest rates are becoming increasingly unsustainable.

“Microcredit with a 26 per cent interest rate cannot survive. Customers are now accessing loans from agent bank branches at nearly half that rate. Over time, microcredit at such high interest will be phased out as it fails to compete,” he said.

As of May 19, the central bank's latest data shows Bangladesh’s gross foreign exchange reserves stand at $25.44 billion.

Under the International Monetary Fund's (IMF) Balance of Payments and International Investment Position Manual (BPM6) methodology, usable reserves are reported at just over $20 billion.​

 

[Saif]

No possibility of dissolving NBR right now: Finance Ministry

There is no possibility of dissolving the National Board of Revenue (NBR) right at this moment since it is very much time consuming to implement the recently promulgated “Revenue Policy and Revenue Management Ordnance 2025” after necessary amendments. “Under the current circumsta

thefinancialexpress.com.bd

No possibility of dissolving NBR right now: Finance Ministry
BSS
Published :
May 22, 2025 20:34
Updated :
May 22, 2025 20:34

There is no possibility of dissolving the National Board of Revenue (NBR) right at this moment since it is very much time consuming to implement the recently promulgated “Revenue Policy and Revenue Management Ordnance 2025” after necessary amendments.

“Under the current circumstances, all the operations of the National Board of Revenue (NBR) will continue like in the past,” said a press release of the Ministry of Finance.

It said that the officials and employees of the income tax and customs would conduct their overall operations under the existing system.

The release also said that necessary amendments to the Ordinance would be brought after consultations with the NBR and all important stakeholders to frame the administrative structure of separation of the revenue board upholding the interests of the BCS (tax) and BCS (customs and VAT) cadre.

It mentioned that the government has no plan to reduce the number of posts of the tax, customs and VAT cadres rather their posts would be increased following necessary reforms side by side there would be much more scope for promotions including appointment to the post of secretary.

In this regard, all the officials and employees of the revenue board have been requested to remain present in their respective offices during office hours and thus discharge their respective duties with integrity ahead of the operations of the national budget for FY26 for the greater interest of the country and thus expediting the economic operations of the country through rendering desired services to the taxpayers.

The release said that despite holding fruitful discussions with the government, the NBR Songskar Oikya Parishad announced non-cooperation movement although it has no rational reason.

It said that following the promulgation of the Ordinance, its implementation would be time consuming since a lot of tasks have to be completed like framing the organogram of the two new divisions side by side necessary changes should have to be brought into the Allocation of Business, Income Tax Act, Customs Act, VAT Act and the concerned rules and regulations.​

 

[Saif]

Govt to amend NBR ordinance

In the face of turmoil amid continued protest by employees, the government yesterday backtracked from its position and stated it would bring “required amendments” to the new ordinance that split the National Board of Revenue.

www.thedailystar.net

Govt to amend NBR ordinance
Employees to continue protest

In the face of turmoil amid continued protest by employees, the government yesterday backtracked from its position and stated it would bring "required amendments" to the new ordinance that split the National Board of Revenue.

It will consult the NBR and other important stakeholders before bringing the changes to the ordinance on tax reform, the finance ministry said in a statement.

"Since implementation of the ordinance is time-consuming after bringing the required revision, activities of the NBR will continue, and officials of customs and income tax cadres will accomplish their duties," the ministry said, urging the protesters to withdraw their ongoing strike.

The statement came hours after the protesters submitted a memorandum to Chief Adviser Prof Muhammad Yunus, pressing a four-point demand that includes repeal of the ordinance bifurcating the NBR and the resignation of its Chairman Abdur Rahman Khan.

The protesters say they are not opposed to the separation itself, but their principal grievance lies in a clause that allows civil servants from the general administration cadre to lead the two new divisions, sidelining experienced officers from the revenue cadre.

The ministry statement said the government has no plan to reduce the number of member posts for customs and tax cadres at the NBR. On the contrary, the number of posts for them is expected to increase after the implementation of the reforms, it added.

The protesting NBR employees welcomed the government's move in a statement late at night, but vowed to resume their protests on Saturday.

They said their core demands, such as the repeal of the ordinance and the resignation of the chairman, were not touched upon in the government statement.​

 

[Saif]

Bangladesh rake in $2.25b in remittances in first 24 days of May

Expatriate Bangladeshis have consistently sent over $2 billion in remittances each month since September, and that trend has continued into May. In the first 24 days of May, remittances totalled $2.25 billion, according to data released by Bangladesh Bank on Sunday. In April, Bangladesh recorded

thefinancialexpress.com.bd

Bangladesh rake in $2.25b in remittances in first 24 days of May

bdnews24.com
Published :
May 25, 2025 21:48
Updated :
May 25, 2025 21:48

Expatriate Bangladeshis have consistently sent over $2 billion in remittances each month since September, and that trend has continued into May.

In the first 24 days of May, remittances totalled $2.25 billion, according to data released by Bangladesh Bank on Sunday.

In April, Bangladesh recorded its second-highest monthly remittance inflow in history, just under $3 billion. The previous month, March, saw a record $3.29 billion in remittances ahead of Eid-ul-Fitr, the highest ever for a single month.

According to the central bank, the previous peak before that came in December 2024, when remittances reached $2.64 billion. By that measure, April’s figure is now the second highest on record.

With May’s total crossing the $2 billion mark, Bangladesh has now seen 10 consecutive months of monthly remittances exceeding that threshold.

However, May also brought worrying news regarding remittances.

Analysts have raised concerns over a proposed US law introduced by President Donald Trump, which seeks to impose a tax on money transfers from the US to other countries. If passed, it could have a negative impact on Bangladesh’s remittance inflows.

The bill proposes a 5 percent tax on all international money transfers from the US. It would apply not only to non-citizens residing in the US for work or business but also to those on H-1B or F-1 visas, and even to green card holders.

Senior officials at Bangladesh Bank and managing directors of several commercial banks fear that if the tax is enforced, remittances through formal banking channels will decline. Many US-based expatriates may then turn to informal channels like hundi, dealing a major blow to the country’s foreign reserves.

Speaking at a roundtable earlier this month, Bangladesh Bank Governor Ahsan H Mansur said the country’s reserves would grow only if remittance and export earnings increase. He expressed optimism that reserves would continue to rise in the coming months.

He also asserted that the value of the dollar would not be determined by foreign companies or institutions, but set domestically by Bangladesh itself.

Earlier this month, Bangladesh Bank allowed the exchange rate to be determined by market forces. The governor confirmed this move followed discussions with the IMF.​

 

[Saif]

Missing revenue target

When a set revenue target looks unachievable, the reasons may be either it is too lofty to achieve or inefficiency on the part of taxmen or some unavoidable setback encountered at some point of the fiscal period. In case of Bangladesh, the general trend of mismatch between the revenue target and th

thefinancialexpress.com.bd

Missing revenue target

Published :
May 26, 2025 23:52
Updated :
May 26, 2025 23:52

When a set revenue target looks unachievable, the reasons may be either it is too lofty to achieve or inefficiency on the part of taxmen or some unavoidable setback encountered at some point of the fiscal period. In case of Bangladesh, the general trend of mismatch between the revenue target and the actual earning is a combination of the first two. The fiscal year 2024-25 had also to bear the brunt of the third in the form of July-August uprising and its ripple effects throughout the year. If all this was not enough, the latest pen-down programme observed by the officials of the National Board of Revenue (NBR) following the ordinance on its bifurcation has proved to be the last straw on the camel's back. The consequence has been what it ought to be: by April, the government's revenue income will miss the downsized target by Tk 715 billion.

There was no guarantee that the tax department would have achieved the target if it did not go for the pen-down strike. But the disruption caused due to the protest programme, particularly at this late and crucial stage, is expected not only to miss the target by a bigger margin but may also decelerate the process of garnering revenue during the current and the final months of the outgoing financial year. Move to split the NBR was not only ill-timed but also the process of doing so caused dissent among the tax people. Sure enough, there was a need for reaching a consensus through extensive consultation with NBR officials before going for its bifurcation. Some experts have questioned the merit of placing the bifurcated organs of the NBR under the finance ministry because bureaucratic supervision will largely be responsible for compromising whatever autonomy the unified organisation enjoys. Evidently, such imposition of the decision could well be avoided and so too the self-inflicting harm. At a time when the country needs as much tax revenues as it can generate, smooth and better coordination was in demand.

Mobilisation of only Tk3.58 trillion in domestic revenue during the past 10 months of this fiscal and that too at a decelerated growth rate of 3.24 per cent compared to the previous fiscal still has a large gap to cover. Even the revenue officials have expressed their doubt that they cannot close the gap. This is certainly not good news for the interim government. In whichever form the NBR operates next until it is in power, it will have to carry the legacy of the past, this current fiscal year in particular.

At a time when the NBR was supposed to be invigorated to put in a robust performance in tax collection, any change in its organogram had to be brought about rationally and the timing of it had also to be perfect without negatively affecting its revenue mobilisation process. Taking care of the overriding need for clearing the augean stables was more important than any other programme. After all, the bottom line is to expand the tax net and eliminate the collusion between a segment of dishonest tax officials and tax payers that either unlawfully exempts some from submitting tax return or helps pay a radically sliced amount in place of the actual tax return they needed to submit.​

 

[Saif]

Enhanced domestic revenue mobilisation for economic resilience

The upcoming budget for FY2025-26 is very significant for Bangladesh from several perspectives. This is the first budget after the fall of the ousted government, and the interim government aims to use the budget as a platform for structural reform to remedy the economic woes Bangladesh has been suf

thefinancialexpress.com.bd

Enhanced domestic revenue mobilisation for economic resilience

TIM Nurul Kabir
Published :
May 26, 2025 23:35
Updated :
May 26, 2025 23:35

The upcoming budget for FY2025-26 is very significant for Bangladesh from several perspectives. This is the first budget after the fall of the ousted government, and the interim government aims to use the budget as a platform for structural reform to remedy the economic woes Bangladesh has been suffering from, particularly during the past few years. As Bangladesh is scheduled to graduate from the Least Developed Country (LDC) status in November 2026, the interim government also has the responsibility to speed up preparedness to meet the post-LDC graduation economic challenges.

Fiscal policy is one of the most crucial areas of government economic policy that has the potential of affecting economic stability and boosting growth. With the economy slowed by high inflation and low revenue mobilisation, the impending exit from the LDC club poses major economic challenges for Bangladesh, which need to be addressed immediately and effectively. The interim government is set to unveil a contractionary national budget with the target of reducing spending and implementing reforms to boost domestic revenue to narrow the budget deficit.

Because of low level of revenue mobilisation, the size of Bangladesh's government sector is one of the lowest in the world, at 13-14 per cent of GDP. The tax-GDP ratio which is a key indicator of revenue mobilisation efficiency has remained stagnant at around 8 per cent, which is much lower than neighbouring Nepal-- 23.4 per cent and India-- 20 per cent. Despite this low level of public expenditure, Bangladesh has maintained a budget deficit of approximately 5 per cent of GDP, financed primarily by external and internal borrowings. Growing reliance on borrowing has led to a rising debt burden.

Bangladesh's debt-to-GDP ratio rose to 36.30 per cent in FY2024 from 32.41 per cent in FY2021, due to substantial expansion in both domestic and external borrowing. According to statistics, 14.24 per cent of the national budget for FY25 was allocated solely for interest payments on government debt.

Borrowing from banking sources increased sharply to BDT 5.97 trillion in FY2024, up from BDT 3.34 trillion in FY2021, signaling crowding-out risks. External debt stock surged to BDT 8.12 trillion in FY2024, compared to BDT 4.20 trillion in FY2021. External debt-to-GDP ratio increased to 22.60 per cent in FY2024 raising external vulnerability. A significant portion of the national budget goes to debt servicing to deal with the enormous debt burden causing significant loss of fiscal space on account of mandatory interest payments.

Amid rising repayment obligations and declining foreign exchange reserves, major nondiscretionary expenditures grew faster than the increase in revenue, which caused the fiscal space to shrink. Besides interest payments on foreign and domestic public debt, other major nondiscretionary outlays include pay and allowances for government employees; pensions and gratuities; and subsidy for energy, agriculture and some other sectors.

As per available data, total nondiscretionary spending on pays, allowances, pensions and gratuities accounted for more than 43 per cent of the revenue in FY23. Extensive subsidies allocated to support various sectors account for almost one fourth of the total tax revenue of the government becoming burdensome for the budget.

According to the debt bulletin report of the finance division of the Ministry of Finance, government expenditure on interest payments account for one-sixth of the national budget. Bangladesh's total debt-to-GDP ratio was 33.02 per cent in 2023, with domestic debt at 19.0 per cent and external debt at 14.04 per cent. Total debt-to-GDP ratio rose to 36.30 per cent in FY2024 and is further projected to rise to around 40.26 per cent in 2025, reflecting higher fiscal pressures.

Bangladesh's public debt in terms of GDP is no doubt among the lowest globally. A total debt-to-GDP ratio of more than 40 per cent is significantly lower than the IMF threshold of 55 per cent. However, it is government revenue, and not GDP, that determines the capacity to pay public debt. In terms of debt-to-revenue measure, Bangladesh's public debt is globally one of the highest.

According to estimates, more than Tk. 980 billion of domestic credit was extended by Bangladesh Bank (BB) to the budget in FY2023. This surge in the borrowing from the central bank triggered corresponding surge in inflation to almost 10 per cent in 2023. In FY2024, the BB provided Tk. 36,176.5 crore domestic credit to the budget during the period of July to February.

As significant portion of government expenses is allocated to paying interest on its debts, a major share of public expenditure is consumed for paying interest, putting constraint on fiscal flexibility. This constraint on fiscal flexibility could worsen as tighter monetary policies as a short term measure to curb high inflation would drive up interest rates on treasury bills and bonds.

Enhanced domestic revenue mobilisation is essential for reducing fiscal deficits, providing funds for public investments and ensuring economic resilience. Low tax collection constrains the ability of the government to invest in development projects. As noted, operating expenses dominated budget execution in FY2023, comprising 64 per cent of total actual spending, while development expenditure accounted for only 36 per cent.

To enhance domestic revenue mobilisation for strengthening fiscal foundations and supporting sustainable growth, two major steps have been taken recently by the interim government. The Medium and Long-Term Revenue Strategy (MLTRS) of the National Board of Revenue (NBR) was unveiled in April, setting a target of raising Bangladesh's tax-GDP ratio to 10.5 per cent by FY2034-35.

Defining medium term as the period from FY2025-26 to FY2029-30 and the long term from FY2030-31 to FY2034-35, the MLTRS aims to implement tax administration reforms to enhance efficiency, transparency and accountability in revenue collection. Upcoming reforms include expanding the tax base, simplifying the tax system, modernising tax infrastructure, enhancing voluntary compliance among taxpayers, and implementing structural changes.

In May, the interim government has issued the "Revenue Policy and Revenue Management Ordinance 2025", dissolving the NBR and replacing it with two new divisions under the finance ministry. In a move to modernise tax administration and boost revenue collection, the government will establish separate Revenue Policy Division and Revenue Management Division. The Policy Division will design tax laws, set rates, and oversee international tax treaties, while the Revenue Management Division will handle enforcement, audits, and compliance for income tax, VAT, and customs.

Bangladesh's total tax revenue consists of about two-thirds indirect tax and one-third direct tax. While indirect taxes are easier to collect and contribute significantly to government revenue, these taxes are levied on goods and services consumed by all individuals regardless of income level, which places a disproportionate financial burden on the lower-income households. Proportionately higher dependence on indirect taxes contributes to widening income inequality in the society.

In contrast, direct taxes such as personal income tax and corporate tax play a crucial role in ensuring fairer tax burden distribution. Countries in the Asia region that have successfully increased their overall tax revenue, including India, Thailand, China and South Korea have steadily moved away from dependence on indirect taxes, towards greater reliance on direct taxes.

As Bangladesh stands at a critical juncture in its development trajectory, and strives to attract and retain greater volume of the much required foreign direct investment (FDI), a stable, transparent, and ethical fiscal environment is critical for economic resilience and sustainable growth. A comprehensive approach is required to address structural weaknesses in the taxation system and ensure efficiency in domestic revenue mobilisation. Tax policy changes are an ongoing exercise, for which active and ongoing stakeholder consultations imperative to ensure resilient growth of industries, trade, investment and the national economy.

T.I.M. Nurul Kabir, business, technology and policy analyst, is Executive Director, Foreign Investors Chamber of Commerce and Industries (FICCI)​

 

[Saif]

Conducive investment climate: A key imperative

Creating a congenial environment to attract foreign direct investment (FDI) is no longer just a developmental goal, it is a necessity. In an increasingly competitive global market, where nations are vying for foreign capital, it is imperative that Bangladesh presents itself as a promising destinati

thefinancialexpress.com.bd

Conducive investment climate: A key imperative

Wasi Ahmed
Published :
May 28, 2025 00:13
Updated :
May 28, 2025 00:13

Creating a congenial environment to attract foreign direct investment (FDI) is no longer just a developmental goal, it is a necessity. In an increasingly competitive global market, where nations are vying for foreign capital, it is imperative that Bangladesh presents itself as a promising destination that fosters investor confidence and ensures ease of doing business. While some progress has been made in recent years, particularly in terms of infrastructural upgrades and policy-level commitments, significant gaps still exist that need urgent attention. Without these corrections, foreign investors are likely to remain hesitant, and the country may miss out on vital investment opportunities.

The urgency of this issue came to the fore during a recent meeting of the joint Bangladesh-China Working Group (WG) on economic cooperation and investment. The meeting highlighted the pressing need for Bangladesh to offer a more investor-friendly climate, particularly as Chinese businesses show a growing interest in establishing operations in the country. The dialogue saw participation from representatives of the Chinese Ministry of Commerce, the Chinese Embassy in Dhaka, and Bangladesh's Economic Relations Division (ERD), among others. Notably, this meeting served as a preparatory session ahead of the upcoming Bangladesh-China Joint Economic Commission (JEC) meeting scheduled to be held in Dhaka on June 1.

China has long been a major economic partner of Bangladesh, both in terms of trade and investment. In the fiscal year 2023-24, Bangladesh imported goods worth US$16.637 billion from China, accounting for 26.4 per cent of its total imports. This clearly underscores the high demand for Chinese products in the domestic market. Additionally, China, including Hong Kong, has emerged as one of the leading sources of FDI for Bangladesh. According to data from the Bangladesh Bank, Chinese FDI reached $2.789 billion as of December 2024, making China the second-largest investor in the country.

Chinese enterprises are actively involved in an array of diverse sectors, including textiles, energy, manufacturing, and infrastructure. Major development projects such as the Padma Bridge and the Karnaphuli Tunnel in Chattogram bear testimony to China's significant involvement with Bangladesh's growth journey. Moreover, as production costs rise in China and geopolitical uncertainties prompt companies to explore alternative markets, Bangladesh stands to benefit from the "China Plus One" strategy, which encourages diversification of manufacturing bases beyond China.

Recognising this opportunity, the interim government has expressed a strong desire to attract more Chinese investment, particularly in high-priority sectors such as healthcare, renewable energy (solar panel manufacturing), and high-value-added textiles. However, to fully leverage the advantages of China's industrial relocation, Bangladesh must address persistent challenges that have long plagued its investment ecosystem.

A leader of the Bangladesh-China Chamber of Commerce and Industry (BCCCI) recently pointed out that while Bangladesh is proactive in seeking foreign investment, especially from China, various structural impediments continue to discourage investors from making long-term commitments. Despite Bangladesh's favourable factors -- such as a strategic geographical location, competitive labour costs, and the development of economic zones-the investment climate is often marred by bureaucratic inefficiencies, infrastructural shortcomings, policy inconsistencies, and a lack of transparency.

Chinese businesses, along with other foreign investors, frequently cite several critical obstacles. These include prolonged and complex approval procedures, inefficient customs processes, and inconsistencies in the application of rules and regulations. The overall business environment suffers from sluggish government agency responses and a general sense of unpredictability, making it difficult for investors to navigate the system with confidence.

Infrastructure remains another major area of concern. Despite some improvements, Bangladesh continues to grapple with an infrastructure deficit. Unstable electricity and gas supplies, congested ports, and underdeveloped transport networks all contribute to increased operational costs and delay in project implementation. These inefficiencies diminish the country's competitiveness in the global investment landscape.

A glaring example is the slow pace of progress in implementing the proposed economic zone dedicated to Chinese investors in Anwara, Chattogram. Despite high expectations and early enthusiasm, the project has seen delays, which has only added to investor frustration. This not only weakens investor sentiment but also affects the credibility of Bangladesh's investment commitments.

According to analysts, the only way forward is carrying on with deep-rooted reforms. Administrative inefficiency and corruption must be addressed head-on. Streamlined approval processes, transparent and consistent policy frameworks, and the digitisation of public services could significantly improve investor confidence. Moreover, consistent dialogue between the government and the private sector -- both domestic and foreign -- will be essential to identify and resolve bottlenecks on a continual basis.

Additionally, leveraging successful regional models could be helpful. Learning from investment-friendly practices in countries such as Vietnam, Indonesia, Cambodia can offer valuable insights for Bangladesh. These countries have successfully improved their rankings in global indices such as the Ease of Doing Business and the Global Competitiveness Report, largely due to systemic reforms and robust infrastructure development.

Bangladesh at the moment stands at a critical juncture. With global supply chains shifting and investors looking beyond traditional destinations, the country has a golden opportunity to position itself as a viable alternative. However, this will only be possible if it takes meaningful and sustained steps to address the underlying issues that inhibit FDI. A conducive, transparent, and efficient business environment is not just desirable -- it is imperative if Bangladesh is to emerge as a key investment destination in the region.

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