Opportunity Overview
Bangladesh is fast developing into an extremely attractive investment destination with the following characteristics:
- Favorable demographics
- A young and dynamic population of almost 150mn
- Extremely competitive labour costs across a broad range of sectors
- Good standards of English literacy
- A homogeneous society with no considerable ethnic, social or religious divide.
- Strong entrepreneurial ethos
- Global competitiveness in textiles can be replicated in other industries and in the many untapped investment opportunities in new industries such as outsourcing and pharmaceuticals.
- An investor friendly regulatory environment and the potential for rapid development of local capital markets.
- Large natural resources in natural gas and coal, and enormous investment demand for infrastructure projects across all sub-sectors.
- Adjacency to India and China in the heart of Asia.
- Duty-free access to many developed country markets
- Substantial opportunities to attract both financial and intellectual capital investment from a large non- resident Bangladeshi community.
- Stable macroeconomic performance
JPMorgan and Goldman Sachs Bullish On Bangladesh
JP Morgan produced a report in April 2007 (‘From Ho Chi Minh Trail to Mexico’) where they included Bangladesh in their ‘Frontier Five’. The Frontier Five was selected on the relative attractiveness of these markets based on macro-economic and demographic trends.
‘It is the demographics of Bangladesh that justifies its inclusion in the JPMorgan Frontier Five. The country ranks fourth in growth in economically active population. Five-year economic growth is strong at 6.1% (CAGR). Progress has been made over the last few years to reduce poverty, increasing literacy levels and moderating population growth to a more sustainable level. An assertive judiciary, active civil society and a relatively free media have increased public accountability.’
Goldman Sachs included Bangladesh in its ‘Next 11’ after the BRIC nations (Brazil, Russia, India and China), which identified countries that may have the potential one day to emulate the BRIC nations who are forecast to rival developed economies. Goldman Sachs evaluated the countries on the basis of macroeconomic stability, political maturity, education, openness of trade and investment regulation.
Bangladesh has reformed its regulations to improve the investment climate for foreign investors; it now allows 100% foreign ownership of companies with no exit restrictions and full repatriation of capital. The World Bank has ranked Bangladesh as 17th for ‘Investor Protection’ ranking above India (29) and Vietnam (143). Foreign entrants to the market include global multinationals such as Mobil, BP, Proctor & Gamble and Lafarge.
