It is estimated that nearly 2.4 million Bangladeshis live abroad permanently, either as citizens or with long-term permits, but the government has made very little effort to tap this huge source of water. ‘investment.
In 2018, a report by the Economic Relations Divisions (ERD) and the United Nations Development Program (UNDP) proposed a package of measures to attract investment from NRBs, but there was very little progress in this regard. until now.
According to the report, India, China, the Philippines, Lebanon, Sri Lanka and other countries have focused on engaging diaspora communities in economic development and have implemented significant economic reforms. and significant in attracting diaspora investment, but Bangladesh lags far behind in this area. concerning.
The report titled “Engaging Non-Resident Bangladeshis in National Development” identified delays in import and customs procedures, lack of connection to public services, lack of skilled human capital, demand for quick cash. , complications in land acquisition, weak enforcement of intellectual property rights, complexities in remittance as the main reasons for low level of direct investment from the diaspora in Bangladesh.
The report recommended the formation of a national-level steering committee headed by the prime minister, a wing specializing in diaspora engagement and three sub-units for philanthropy, investment and expert engagement, but there has been very little progress in this regard in the approximately four years since it was published. has been published.
He also proposed a plan to establish a central coordinating unit to boost diaspora investment in the prime minister’s office, but that hasn’t made much progress either.
“We conducted an in-depth study and recommended a coordinated way to use the perspectives of our NRB. But after the research, the follow-up activities were not satisfactory,” said Dr Mobasser Monem, professor of public administration at the University of Dhaka, which conducted the study.
Amal Krishna Mandal, head of the UN wing of ERD, told TBS: “We conducted the study as part of the UNDP-funded Knowledge Management for Development project. Later we found out that ERD has no function to deal with NRBs to attract which is why we did not pursue any further.
A “Remittance Use Survey” conducted by the Bangladesh Bureau of Statistics in 2013 found that only 25.32% of remittances received in Bangladesh were invested in businesses, while 74.68% remaining% was spent on consumption.
SM Parvez Tomal, chairman of NRB Commercial Bank Ltd in Bangladesh, told TBS: “There is potential for foreign direct investment by NRBs worth $ 2-3 billion, but the environment at Bangladesh is not suitable for operating business overseas. Potential investors from abroad are victims of fraud in most cases. “
Explaining the experience of setting up and operating his own bank, he said: “The banking system is a space of compliance. It was considered that all procedures would be completed within a few visits to Dhaka, but the reality was different.
“We had to stay in the country, leaving our own businesses overseas. Five of our nine directors live in Bangladesh, which is not possible for all NRBs,” said SM Parvez Tomal, who currently lives in Bangladesh. Russia.
He identified the lack of willingness to manage an overseas bank account as a major obstacle behind low investment by diaspora communities.
Bad investment of NRB in the capital market
Currently, over 1.2 crore of Bangladeshi workers reside abroad, but only 90,507 beneficial owner accounts are managed by NRBs to invest in stocks and bonds in the capital market.
Previously, NRBs were granted a 10% quota for the purchase of Initial Public Offerings (IPOs), but this year the Bangladesh Securities and Exchange Commission reduced the quota to 5% because expatriate Bangladeshis did not showed a lot of interest in investing in the capital market here.
Experts said the government gives NRBs various opportunities to invest here, but most of them do not use them.
“NRBs can invest in the stock markets anywhere in the world. So they would not be interested in investing in Bangladesh because we could not develop our stock market to that level,” Prof. Abu Ahmed said, stock market expert.
The facilities for investing in bonds are declining
The government launched the Wage-Earner Development Bond in 1981 to ensure risk-free investments by NRBs.
The NRB’s investment in the bond was Tk 1,341.26 crore in FY20 while it was Tk 1,902.61 crore in the previous fiscal year.
Previously, NRBs could invest a maximum of Tk 50 lakh separately in three savings bonds – Employee Development Bond, US Dollar Premium Bond and US Dollar Investment Bond. But the government lowered the maximum investment limit to Tk 1 crore or its foreign currency equivalent in these bonds last year.
The bonds provided guaranteed investment scope for NRBs, but the government set the investment limit in these bonds at Tk 1 crore. This made the NRBs very unhappy, as they could have invested their money in Bangladesh, said SM Parvez Tomal, chairman of NRB Commercial Bank.
In addition, the NRBs are not very aware of these obligations due to the lack of a well-designed and solid advertising campaign, the experts said.
NRBs want a special economic zone
At the Bangladesh Securities and Exchange Commission (BSEC) “Investors Summit: Bangladesh Capital Markets” in New York last July, non-resident Bangladeshis demanded a special economic zone for them.
In addition, during the visit of Minister of Commerce Tipu Munshi to the United Arab Emirates on the occasion of the “World Expo 2020” in Dubai last month, the Bangladeshi business community raised a demand for a special economic zone. .
At the time, the Minister of Commerce told the media that the government would sincerely consider the proposal for an economic zone dedicated to expatriates.
Tipu Munshi also said the government would form a committee to help expatriates invest and operate businesses in the country.
The committee will be chaired by the Ministry of Commerce and will include the Ministry of Industry, the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Economic Zone Authority (BEZA).
BIDA Executive Chairman Md Sirazul Islam told TBS: “NRBs can invest in any special economic zone. They have asked for a particular economic zone, but they do not have a united global platform.
However, he recognized that more coordinated efforts by government agencies are needed to harness the potential of NRBs.
Diaspora Investment Promotion Project
The Ministry of Expatriate Welfare and Overseas Employment recently launched a pilot project to promote diaspora investments in Bangladesh in the agricultural sector. The project is funded by the International Fund for Agricultural Development (IFAD).
The pilot project involving Tk9 crore will operate in four upazilas to involve diaspora communities in various agricultural productions, said Zahid Anwar, deputy director of WEWB.
During her recent visit to the UK, Prime Minister Sheikh Hasina urged Bangladeshi expats around the world to invest more in Bangladesh as investment opportunities for them have multiplied across all sectors.
Regarding the allegations made by some expats that they are facing problems investing in Bangladesh, the Prime Minister said: “We will find out the obstacles, if any, in this regard and I assure you all to solve these problems for your sake. convenience of investing, which will benefit everyone. “
The prime minister also said that the government has already given the necessary guidance to the Bangladesh Development and Investment Authority (BIDA) to remove all obstacles in the investment process.