Published in Dhaka Tribune on Wednesday, 4 June 2014.
Make Bangladesh a safe investment destination
Tribune Editorial
Safer politics and factories are the most effective way to reverse capital flight
No one should be surprised that a lot of capital has left Bangladesh over the past year.
Analysis of trade data by the Centre for Policy Dialogue points to an abnormal jump in the value of imports for certain terms. The inference drawn by CPD is that dramatic increases may be explained by irregular invoicing used to get around exchange controls.
Whatever the method, there is no doubt about the underlying reasons for capital flight in the last year.
In the months leading up to the January 5 election, the economy was throttled by blockades and hartals.
We cannot afford any repeat of those circumstances. The BNP should realise that the pre-election violence made them less popular than they otherwise might have been. Both major parties need to learn to confine themselves to non-violent protests when they are in opposition. The politics of oborodh and hartal must end.
Another factor causing capital flight has been uncertainty about the future of the RMG sector, where historically most investment has been concentrated.
With the World Cup providing a boost to garment sales and the work of stakeholder safety initiatives, there are grounds for optimism that confidence can return.
The government should take more action to support the development of safe factory buildings in new EPZs, to which factories now housed in unsafe buildings can relocate.
Safer politics and safer factories are key ways to make Bangladesh an attractive destination for investment and are the most effective way to reverse capital flight.