Bangladesh as the next destination: Deepening economic ties with Japan

However, Japan’s inflow of FDI remains quite low and it does not even fall under the top 10 FDI originating countries for Bangladesh, both in terms of flow and stock. Japanese investment in Bangladesh was USD 58.4 million in 2018 while that in Myanmar was USD 384 million. This unfortunate situation is mostly due to Bangladesh’s failure in attracting FDI and the negative perception about future potentials for foreign investment in Bangladeshi economy. It is most unfortunate because Bangladesh is a much bigger economy, has a larger and better production base, has a much larger and fast-growing domestic market of more than USD 300 billion and a population of 170 million, and also offers a much better mix of skilled workers when compared with countries like Myanmar or Cambodia. However, attracting FDI from Japan and other countries continues to remain a major challenge, given Bangladesh’s poor ranking in doing business, international productivity measures and numerous other indicators. Bangladesh should preach to the foreign investors that all foreign companies operating in Bangladesh are expanding and are likely to stay forever. If Japan can enhance its private investments and FDI in Bangladesh, it will be beneficial for both the countries. Bangladesh and Japan’s economic relations will be better with the inflow of investments, rather than just aid.