Political Turmoil in Bangladesh Threatens Investment Growth, Warns South Korean Ambassador
Political Instability Hindering Bangladesh’s Economic Progress, Says South Korean Ambassador South Korea has raised concerns over the political instability and uncertainty in Bangladesh, which are negatively impacting foreign investments and economic growth.
Dhaka: Political Instability Hindering Bangladesh’s Economic Progress, Says South Korean Ambassador South Korea has raised concerns over the political instability and uncertainty in Bangladesh, which are negatively impacting foreign investments and economic growth.
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South Korean Ambassador to Bangladesh, Park Young-sik, expressed these concerns during an event titled ‘Meet the OCAB’, organized by the Overseas Correspondents Association Bangladesh (OCAB) in Dhaka on Friday.
Political Uncertainty Hampering Investment in Bangladesh
Ambassador Park emphasized that the ongoing political turmoil, with Bangladesh currently being governed by an interim government, is causing hesitation among international businessmen. According to Park, many are withholding investment as they wait to see how the political situation evolves.
“Whenever I speak with businessmen, they tell me they are holding back on investment, waiting and observing how the situation unfolds,” Park said, adding, “Political instability and uncertainty are causing problems for the host country. It is necessary to resolve these political issues.”
Slow Economic Growth Due to Reduced Investment
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The South Korean Ambassador further pointed out that political instability is directly impacting the economy. Private investment and consumption in Bangladesh are growing at a much slower pace, which could result in decelerating economic growth. He highlighted that the country’s Foreign Direct Investment (FDI)-to-GDP ratio is notably lower than that of neighboring countries like India and Vietnam.
Need for Policy Reforms to Attract Investment
To address the ongoing issues, Park recommended several measures to make Bangladesh more attractive to foreign investors. He noted that simply offering incentives would not be sufficient. The country needs to simplify visa procedures, customs clearance, and revise tax and tariff policies. Additionally, there should be provisions allowing profit repatriation without excessive taxation, and strict action should be taken against corruption.
Bangladesh’s Economic Struggles Amidst Political Crisis
The economy of Bangladesh has been grappling with severe challenges, particularly since the political unrest began in August 2024. In February, it was reported that businesses across the country are facing significant liquidity problems, with many commercial and industrial establishments closing down. Entrepreneurs have been struggling to import raw materials, further hurting their operations.
Security concerns have also escalated, particularly within the business community. The interim government has been urged to provide a secure and safe environment for industries, especially for the key readymade garments sector, which is a major contributor to the country’s exports. There have been reports of violent attacks on businessmen in recent months, raising alarms within the business community.
As Bangladesh continues to face political and economic instability, the need for a stable political environment and investor-friendly policies has become increasingly urgent. Only time will tell if these changes can be made to revitalize the country’s economic growth and restore investor confidence.
