Energy, banking and law and order investors’ top concerns

Invest Bangladesh is barely two months old, built by merging three agencies. What does that signal to investors?

I read it the other way round — it is us listening to investors. In my first three months in the interim government, association after association wrote to me saying one of the biggest problems in our investment climate was that Bangladesh had so many investment-promotion agencies; a global study we did found no other country with this structure. Consolidating them was their own demand. 

So now an investor will not have to knock on three different doors just to find where a single piece of information lives. And the new law is categorical: there will be one digital platform, and from the day it launches no other may offer the service — the manual channel has to close too, because as long as you can get a trade licence online or pay a little and get it by hand, you will never have parity.

The IMF and World Bank blame slowing growth partly on weak investment. Can Invest Bangladesh fix that alone?

I do not expect to do it alone, and I would gently disagree with the framing. Investment not happening is an outcome — it is the output of the problem, not the problem itself. The causes are the lack of reliable energy infrastructure and the state of the banking sector; handle the causes and the outcome follows automatically. 

There is a public perception that a good investment year is the agency's success and a bad one its failure; neither is true. This is a massive ecosystem, and the needle moves on the whole of government, on our culture, even on our behaviour on the street. My own part in it is small.

So what are the real binding constraints?

Two, above all. One is energy — you may set up a factory, but if you cannot get a gas supply, who will come? The other, which has hurt us badly over the last five to seven years, is banking. An investor needs credit, a sound financial market where lenders have confidence, as much as he needs the lights to come on and the water to run. 

Non-performing loans are now around 33%, and the governor has proposed Tk60,000 crore a year, for five to eight years, just to keep the distressed banks alive. That is how deep it runs.

You keep returning to governance. How badly do we actually score?

Look at the World Bank's Worldwide Governance Indicators, released a few weeks ago — six measures, each out of 100. For Bangladesh in 2025: control of corruption at 28, regulatory quality at 39, government effectiveness and the rule of law in the low 40s, voice and accountability at 44. 

In South Asia, that leaves us ahead of only Afghanistan and Pakistan; India, Bhutan, Sri Lanka and Nepal are all above us. We say we want to be Singapore. Singapore's government effectiveness is 95. So if the whole governance system sits where ours does, why do we expect investment, and why would an investor come?

That is a sobering comparison.

But my competition right now is not Singapore — it is Vietnam, it is the Philippines, and I have to see exactly where I lag behind them. An investor comes for an opportunity, so I have to show him the opportunity and, just as important, that I am travelling in the right direction. 

If my score is 43 today, 45 next year and 47 the year after, his confidence grows. Far fewer able countries than ours have done this. Giving up hope is not even an option.

In 2025, our FDI fell behind Uganda, Ghana, even Congo and Pakistan — $1.78 billion, against Uganda's $3.36 billion.

Why do investors turn away?

The prospects are real, and investors who have studied Bangladesh know them — there may be an awareness gap, but those who come already know. The trouble is that, too often, we cannot give them the basic things an investor expects of any country, whether because of the organisational complexity inside the government or because we simply cannot provide the basic infrastructure, as with energy. Until we guarantee those, the material shift will not happen.

Does political instability feed into this?

It does, and it saddens me, because investment should never be a political issue — a thriving investment climate benefits everyone, opposition and government alike, since whoever is out of power today may be in it tomorrow. 

Yet I see investment being made into a political football, and that is very regrettable. Stability is the single most important factor for any investor, political and policy stability both. When investors talk to me, the three things I hear most are energy, the banking market, and some instability in law and order — and that last one is, frankly, tied to our political history.

You ran the big 2025 summit under the interim government, and the criticism was that investment never came.

That is simply wrong information. In the first year after the uprising, we drew $1.7 billion – essentially a normal year. Look at other countries after a shock on that scale, Sri Lanka's bankruptcy or Syria; their investment turns negative, not merely zero. Ours held, much of it reinvested earnings, which is true everywhere in the world. 

What the summit achieved was, first, to prove the country had not been destroyed — come and see, Bangladesh is much as it was — and second, to build a pipeline, from which we have had roughly 15 to 20% conversion, about the global rate. Without it, the negative perception would have lingered far longer.

The headline reform is deregulation. Where is it actually going?

The prime minister chairs a national deregulation task force, and I sit on it; it met only yesterday. Our flagship target is the time it takes to open an import letter of credit — with the trade licence, the IRC, the ERC, the RJSC registration, it can take a full year, and we have promised to bring it down to 14 days before the next budget. That would be a massive signal. 

But it is far harder to do than to say, because the real obstacle is not paper — laws can be changed, and the government has a two-thirds majority — it is mindset. 

Take security clearance for a foreign investor's visa: the standard says 21 days, yet I am fairly certain fewer than half of the last hundred were cleared in time. So the decision now is that if we commit to 21 days and miss it, the clearance is deemed approved on day 21, the way a bill becomes law if the president does not act within 15 days. We are moving the meetings from quarterly to monthly, with more than a hundred initiatives tracked one by one. Accountability is what we are trying to build.