Foreign investors attending the Bangladesh Investment Summit 2025 have said that cheap labour and tax breaks have made the county attractive to foreign businesses for investment.
Hijiri Orihara, general manager of the overseas sales department of the Japanese wrist watch maker, Sun Flame Co Ltd, attended the four-day summit with a view to establishing a plant in the country.
Ever since company officials heard that Bangladesh offered tax break for 10 years at specific zones, they had been looking for an opportunity to visit Bangladesh, Hijiri told 抖阴精品 at the InterContinental, Dhaka on Tuesday.
The company has sent Hijiri and Kenichi Hirai, global strategy division manager of Sun Flame, after it received invitation from the Bangladesh embassy in Tokyo, the Japanese capital.
Based in Tokyo, Sun Flame has been marketing its three brands 鈥� Sun Flame, Sealane and Grand Jour 鈥� since 1984 in the domestic market dominated mainly by Seiko, Citizen and Casio.
Just before the Covid pandemic, the company included China for marketing its watches prices of which range from $10 to $100, said Hijiri.
Hijiri said that he was excited to learn that there was no import duty for bringing raw materials to Bangladesh to operate in the specific zones.
He also said that his company wanted to rely on local partner to look after the marketing as part of its plan to export watches from Bangladesh to India and other Asian countries.
Calculating per hour wage at about $12 in Tokyo, Hijiri said that growing manufacturing costs in Japan had led them to find out alternative.
Pavel Nikulin, a senior engineer at NOA Labs in Shenzhen of China, said that growing wage forced them to look for alternative investment destinations.
He told that he had participated in the summit in the past years with the aim of making an investment in Bangladesh, but the Covid pandemic and the war in Ukraine with Russia had delayed the plan.
One of the major reasons is the possibility in availability of cheap workforce in Bangladesh, he said.
Mainly based in Berlin of Germany, the NOA Labs is dedicated to designing, engineering, prototyping and mass production.
Its major products include artificial intelligence, consumer electronics and mobile devices.
Despite an abundance of cheap labour force, Bangladesh is one of the least foreign direct investment destinations in South Asia.
The foreign direct investment flow to the country in the 2023-24 financial year dropped to a decade low to $1.47 billion compared with that of $1.6 billion in FY23 and $3.44 billion in FY22, according to Bangladesh Bank.
In 2023, the FDI to India drastically fell to $28.1 billion compared with that of $49.3 billion in 2022. In the same year, Sri Lanka received $724 million in net FDI and Pakistan $1.82 billion.
Gary Hu, general manager of the Xi鈥檃n Longjoy Foreign Trade Co Ltd of China, said that he was looking for a local partner in Bangladesh to set up a factory in the export processing zones because of growing labour cost in China.
His company鈥檚 main items are cable trays, steel gratings, steel fences, fasteners, cables and screen pipes.
Hu pointed out that hiring a Chinese engineer cost about $1,500 monthly.
In Bangladesh, his company could hire such an engineer at $500 to $700 monthly, he said.
To him, Dhaka鈥檚 chaotic traffic should be checked and bureaucratic hassles should be curbed.
Economists identified inefficient bureaucracy, corruption, negative credit rating, dollar shortage and political uncertainty among the problems hindering the FDI.
But the country needs higher flow of FDI to overcome the challenge of graduation from the least developed countries鈥� bloc in 2026, they said.
The FDI will not only ensure the flow of foreign currency, but also ensure technology transfers, said Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development.
The investment summit that ended on Thursday raised the level of general people鈥檚 expectation over attracting FDI as it was organised under the interim government that assumed power after the fall of the autocratic Awami League regime on August 5, 2024 amid a mas uprising, economists said.
They said that the AL regime was criticised by foreign investors for failing to ease the doing of business situation, which remained one of the major obstacles to attracting FDIs.
Bangladesh Investment Development Authority executive chairman Chowdhury Ashik Mahmud Bin Harun on Tuesday said that the investment summit would help the country to erase its negative image as an investment destination.