South Korea: Political instability in Bangladesh hampers investment and growth
Dhaka: South Korea has stated that political instability and uncertainty in Bangladesh are creating challenges for investment and economic growth.
Speaking at an event titled ‘Meet the OCAB,’ organised by the Overseas Correspondents Association Bangladesh (OCAB) in Dhaka, South Korean Ambassador to Bangladesh, Park Young-sik, on Friday said, “Bangladesh is currently under an interim government, and whenever I speak with businessmen, they tell me they are holding back on investment. They are waiting and observing to see how the situation unfolds.”
“Anyway, political instability and uncertainty are causing problems for the host country (Bangladesh). It is necessary to clear the political issues,” he stated.
“So, if you look at the data, you will see that private investment and consumption are growing very slowly. The shrinking of private investment and consumption will lead to slower economic growth in Bangladesh,” he added.
Young-sik pointed out that in terms of Foreign Direct Investment (FDI), Bangladesh’s FDI-to-GDP ratio is lower compared to India and Vietnam, reports Bangladesh’s leading daily, The Business Standard.
“Mere offering incentives is not enough and Bangladesh needs to simplify visa procedures, customs clearance, and rational tax and tariff policy. It also needs to allow profit repatriation without holding taxes, and take strong measures against corruption,” the Ambassador added.
The economy of Bangladesh has been facing severe challenges amidst the huge unrest in the country since August 2024. In February, it was reported that the business sector in the country is facing a huge liquidity crunch, with numerous commercial and industrial establishments shutting down.
The entrepreneurs in Bangladesh are facing difficulties in importing raw materials to sustain their businesses.
There is also a growing security concern in the business community of the country, which has urged the interim government to provide a safe and secure environment to all industries, including the readymade garments sector, the main exporter of Bangladesh.
There have been several incidents of brutal attacks on businessmen by miscreants in recent months.