Corruption key barrier to FDI in Bangladesh: USTR report

The Office of the United States Trade Representative has said corruption, bureaucratic inefficiencies and lack of transparency are the major impediment to attracting foreign direct investment in Bangladesh.
In a recent report titled ‘2017 National Trade Estimate Report on Foreign Trade Barriers’, the USTR identified extortion of money from businesses by individuals claiming political backing as another barrier to trade and investment in Bangladesh.
‘Bureaucratic inefficiencies often discourage investment in Bangladesh. Overlapping administrative procedures and lack of transparency in regulatory and administrative systems can frustrate investors seeking to undertake projects in the country,’ the report said.
It also said that the timely implementation of strategic reform initiatives and routine duties was being barred due to frequent transfers of top and mid-level officials in various ministries, directorates, and departments.
According to the report, the US and other international companies are concerned over the arbitrarily reopening of decades-old tax cases with particular targeting of cases involving multinational companies.
The report said that the US and other international investors raised concerns over the cumbersome process of outbound transfers from Bangladesh.
It said, ‘Applications to repatriate profits or dividends can be held for additional information gathering or otherwise delayed, if tax disputes arise.’
The USTR report said that there were widespread disputes over land and both the US companies and citizens had filed complaints about fraudulent land sales.
‘For example, sellers fraudulently claiming ownership have transferred land to good faith purchasers while the actual owners were living outside of Bangladesh. In other instances, US-Bangladeshi dual citizens have purchased land from legitimate owners only to have third parties make fraudulent claims of title to extort settlement compensation,’ the report read.
‘Likewise, corruption remains a serious impediment to investment in Bangladesh. While the government has established legislation to combat bribery, embezzlement, and other forms of corruption, enforcement is inconsistent,’ the USTR report said.
Regarding the government procurement, the report said that the government of Bangladesh publicly subscribed to principles of international competitive bidding but charges of corruption were common.
According to the USTR report, despite launching a national electronic government procurement portal the US companies raised concerns about the use of outdated technical specifications, the structuring of specifications to favour preferred bidders, and lack of overall transparency in public tenders.
‘Concerns over the safety of infrastructure and industrial relations practices also have discouraged greater investment and trade,’ the report read.
The collapse of the Rana Plaza building and the death of 1,129 workers in April 2013 highlighted health and safety concerns in the country’s factories and the lack of effective oversight and regulation, the USTR report observed.
It, however, said that the recent initiatives by the government of Bangladesh, international garment buyers, and the International Labour Organisation led to improvements in factory safety standards and transparency over the past three years.
Nabhash Chandra Mandal, executive member of the Bangladesh Investment Development Authority, said that they had taken various initiatives to overcome the impediments to FDI growth.
‘We are going for automation to remove administrative overlapping and bureaucratic complexities for the investors. We are working on ease of doing business and to facilitate foreign investment the government is formulating a law and the draft of the One-Stop Service Act has been sent to the cabinet for approval,’ he said.
Nabhash said that the BIDA was working to ensure transparency and accountability and the body was making progress step by step.
‘We can’t say Bangladesh is 100 per cent corruption-free but work is going on to eradicate the problem and we are making progress,’ he said.
(Source: New Age)

Bangladesh minister says bankers facing corruption charges won't be selected for promotion

Finance minister AMA Muhith has directed the Financial Institutions Division not to select any bankers facing corruption cases for promotion.
He gave the directive after the FID placed a list of 11 deputy managing directors, aspirant for the posts of managing director at three state-owned specialised banks.
Of them, Agrani Bank DMD Mizanur Rahman Khan and Janata Bank DMD Abdus Salam Azad are facing departmental cases for their alleged involvement in loan scams.
Mizanur was sacked by Bangladesh Bank on June 30, 2016 because of the Moon Group loan scam involving Tk 108 crore. Later, on August 7 he was suspended by the FID.
Azad was suspected of being involved in the Bismillah Group loan scam.
FID secretary Eunusur Rahman said the suspected officials would be selected again for promotion once they are cleared out of departmental actions.
Now, the FID has to select the managing directors from nine selected DMDs, he said.
The DMDs are Moin Uddin, Mohammad Ismail Hossain, Mohammad Helal Uddin, Rafiqul Islam, Mashiur Ali, Amin Uddin Ahmed, Tariqul Islam Chowdhury, Mahtab Zamin and Ali Hossain.
The FID officials said top post of Rajshahi Krishi Unnayan Bank felt vacant since the expiry of tenure of immediate past MD Kazi Sanaul Hoq.
They said tenures of the present MDs of Krishi Unnayan Bank and Probashi Kallyan Bank would expire soon. 
(Source: New Age)