For Bangladesh, when it comes to the role of FDI in facilitating the growth of local economies, attracting “greenfield investment” should be given higher priority by the administration.
Under this type of FDI, foreign parent companies set up subsidiaries in local economies and build the company from the ground up.
This leads to the development of new production and distribution channels and facilitates the promotion of local workers in the field of management.
However, it is unfortunate that Bangladesh has been ranked among the bottom tier of countries when it comes to the attraction of greenfield FDI.
Which is no surprise, given that our country has consistently been branded as one of the more difficult ones in the global Ease of Doing Business Index.
According to the Greenfield Performance Index, based on on global ranking, factors such as contradictory regulations and profit repatriation difficulties are what contribute to our difficulties.
Bangladesh is a nation where even local companies face inordinate friction in setting up shop.
If the authorities were to work on the many legal and bureaucratic hurdles, not only would we be able to make it easier for local businesses to prosper.
But the amount of FDI pouring into the country would increase, including greenfield FDI.
This type of FDI is especially important because as opposed to traditional FDI, where foreign stakeholders inject money into existing industries.
And businesses greenfield FDI builds businesses from the ground up and invests in the managerial skills of the local populace.
Not only is such a practice more sustainable in the long run, but it can add more jobs than traditional FDI injections.
Clearly, change is needed in the very way we facilitate the growth of business in our nation.
To maintain and grow our momentum, we need to grow our economic infrastructure at an astounding pace. We certainly can’t do it alone.