Bangladesh’s economy is growing at an astonishing pace, even amid the Covid-19 pandemic, and is projected to be the fastest growing economy in the world by 2030.

Speaking at the Chamber’s webinar on 11 November, Acting Consul General Md Nazmul Alam gave an update on Bangladesh’s latest business developments, and introduced some of the prospective areas for investment and the incentives available.

Bangladesh’s economy has remained resilient during the pandemic, maintaining a 5.2% growth rate, with the figure expected to rise to between 6% and 7% in 2022. “The plan is to become a developed country by 2041,” he said.

Lying at the heart of a triangle formed by the world’s most dynamic economies – China, India and Southeast Asia – Bangladesh is conveniently situated to take advantage of its neighbouring markets. 

“You are not only looking at the 160 million-strong consumer market within the country,” the Acting Consul General said. “By setting up shop in Bangladesh, you are giving yourself access to a growing regional market of over 3 billion people.”

ACG Alam then explained that, apart from its renowned garments and textiles industry, which account for 84% of the country’s overall exports, Bangladesh also offered opportunities across a wide range of industries. These include ICT, infrastructure, electronics, light engineering, pharmaceuticals, healthcare, agribusiness and leather products.

He added that the country’s competitive work force and business-friendly policies made it an attractive investment destination. “Almost all sectors bar a few are open for foreign investment, bundled with 5-10 years of tax holidays, full repatriation of capital and profits, and cash incentives for export-oriented businesses.”

Also speaking at the event, Dewan Saiful Alam, President of The Bangladesh Metropolitan Chamber of Commerce Hong Kong, said he had witnessed how quickly the country had been growing. 

“The government has taken a lot of initiatives in improving the infrastructure,” he said. “Everything like rail and roads are being built and improved across the country.” 

Bangladesh’s major infrastructure improvements are well under way, including two deep sea ports, a new terminal at Dhaka Airport, metro and bus transits in Dhaka, as well as the 6.15km Padma Bridge, the country’s signature Belt and Road project, will be its longest bridge when it is eventually completed. 

The government is also in the process of establishing 100 economic zones, ripe for foreign investment. All things considered, the government estimates it will require US$350 billion investment in infrastructure to reach its economic goals by 2030.

Dewan Saiful Alam also noted that the country had become more business friendly in the past decade in terms of day-to-day operations. “Banking issues were commonplace in the past, but now it is much easier,” he said. “Now there is no need to worry about payments not clearing on time.”

Tareq Rafi Bhuiyan, Managing Director of NewVision Solutions Ltd., also spoke at the webinar and shared his insights about Bangladesh’s “thrust” sectors such as pharmaceuticals, light engineering, automobile and agro-food.

In terms of auto, companies such as Suzuki, Honda, Mitsubishi and Yamaha have set up manufacturing plants in Bangladesh to take advantage of its competitive labour force and export-friendly policies. Bhuiyan said people may not be aware that Japanese businesses have consistently topped the charts for investment in Bangladesh, and continue to have interest in the country. 

According to a survey conducted by JETRO and the Japan Chamber of Commerce, Japanese companies hold Bangladesh in higher business confidence compared to other counties in Asia, and the country remains the destination of choice for a majority (70%) of companies for expansion. 

In other sectors, global companies like Nokia and Samsung also have manufacturing presence in the country.

Bhuiyan said businesses entering Bangladesh should make sure they find a good partner, and prepare to learn the culture and adapt to the country’s way of doing business. 

“Delays and untimeliness are to be expected, so think about your delivery dates and timelines,” he said. “Also, most companies are family-run, so business decisions can be quite centralized, and ESG is often not on the top of their list of considerations.”

He added that partners will often expect a high return on investment, and will think in the short term. “Bank loans are usually only for five years and interest rates are high (8-10%), so investors want to a see return on investment in a relatively short time span,” he explained.

Bhuiyan added that Bangladeshi people are friendly to work with and welcoming to foreigners, but it is often up to investors to find the best way to work with them. 

“Bangladeshi people are very intelligent and have a lot of pride,” he said. “Go in humbly as an equal and don’t try to think yourself superior to the locals.”