As developed countries brace for an economic lull as the global credit crunch grips, Bangladeshis hope that efforts made to spur investment will reap opportunities when a turnaround comes. With an available workforce of 50million and production costs rising and squeezing the margins of foreign-owned factories in China, ministers behind such schemes as the Export Processing Zones (EPZs) feel the time has come for Bangladesh.
Prime Minister Sheikh Hasina Wajed's convincing victory last December, which according to official sources saw an 80 per cent turnout, came as the country returned to free elections. Her success was overshadowed when the capital Dhaka was shaken as paramilitary troops mutinied against their officers last month.
Bangladesh's Hong Kong Consul General Ashud Ahmed, admitted that the outbreak of violence, which saw the Prime Minister at the centre of negotiations with the mutineers, triggered concerns, particularly after a period of stability. But Mr Ahmed, who took up his post here eight months ago, said a government investigation committee set up after the mutineers surrendered showed the new Bangladesh government's effectiveness. He said this would further assure foreign investors who had put their faith in the country after years of stability under a caretaker government during which corruption and extremism was tackled.
Bangladesh was named among Goldman Sachs' 'Next 11' economies with the potential to emulate the success of other developing nations after a rapid growth in foreign investment in recent years. The World Bank also cited the nation's expanding middle class and consumer industry as signs of a gradual move towards prosperity.
'During my tenure here I will focus on the development of business between the two countries and cultural events,' said Mr Balal, a career diplomat who previously served Brussels. 'Because of the economic situation not going the way it should, opportunities may not be that easy to come by. But we hope this will resolve itself by the end of the crisis and Hong Kong companies will be interested in going to Bangladesh [in areas] where investment is needed, such as in infrastructure, the IT sector, apparel and tea [exports].'
Mr Balal said Bangladesh would welcome more companies setting up in the EPZs in which tax breaks, land provision for building factories, multiple-visa entry and relaxed procedures, among other incentives, were on offer. 'Hong Kong businesses can avail of these incentives,' he said.
In addition to attracting infrastructure investment, and specialists in the IT and communications sectors, Mr Balal said Bangladesh was keen to see a revival in its traditional crafts and agri-business sectors such as organic tea. Another commodity he hoped would benefit from the global trend of sustainability and eco-friendly living was jute.
