Private Investments Decreased in current fiscal

In the last two fiscal years, the private investment in the various industrial sectors of Bangladesh has decreased. This was caused by both the downgrading global economy and a few internal issues like shortage of power, infrastructural barriers, fluctuating inflation rate, frequent changes in policies and strict credit rate.

The recent survey conducted by Bangladesh Bureau of Statistics found that private investment dropped down 0.37 percent in the ongoing fiscal year. This is the second time this situation has occurred in the last 20 years. The other time it happened was in 2009. A few roundtable meetings held by the Centre for Policy Dialogue discussed about this problem and highlighted three issues as the biggest factors of the decrease in private investment.

One of the major problems behind this incidence is the poorly founded infrastructure of the financial institutes, government policies and the coordination between the government and the private investors. Difficulty in accessing finance is another major issue in this case. This is causing the production cost to rise up and ending up in creating a noticeable distinguish between the local and foreign market.

Mr. Debopriya Bhattacharya, one of the fellows of CPD, claimed that corruption and difficulty in access to finance is causing the private investors to pull away from investing in Bangladesh. According to the World Bank, the randomly fluctuating inflation rate and the tightening of credit system is causing the dip in the private investment.

If the current government wants to meet up to their target of private investment against the GDP, they have to take action to resolve these issues. A strong infrastructure and strictness against corruption might attract more private investors to invest in Bangladesh.

On a brighter note, local conglomerates including Square Group, Aftab Group and Transcom has seen a rise in the current fiscal and contributed to the country’s economy by investing in new projects and creating employment.


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