The British Connection

The United Kingdom is the second-highest investor in Bangladesh, only behind Japan. The relationship between the two nations has been growing in various aspects. COLORS Business’ Ziaul Karim and Arka Dev Biswas speak to High Commissioner Robert Chatterton Dickson on how the future is brighter for the two nations.

High Commissioner Dickson sees vast potential for development in Bangladesh. Photographer: Kazi Mukul.

Bangladesh is an interesting case study. It is the 8th largest country by population, growing at a rate of 6 to 8% prior to the pandemic. And the nation has still sustained growth during the pandemic. The policies implemented and the resilience of the people have allowed the nation to keep growing, keeping on track to graduate from the status of Least Developed Country (LDC). Robert Chatterton Dickson believes these aspects have allowed Bangladesh to stand head and shoulders above other nations. However, there are opportunity costs to becoming an economically improved nation. “Life becomes harder for countries that graduate from being an LDC country. Countries are treated equally to other competitors and the previous benefits the nation used to have, no longer apply,” Robert identifies. The graduation will erode a lot of the benefits Bangladesh used to enjoy while having LDC status. LDC nations receive LDC-specific international support measures such as development assistance, international trade benefits, and various general support. These measures have underlying categories, however, to allow nations to transition smoothly, there are provisions that make countries self-sufficient. These changes are imperative to attract international investments. Investors want to invest in countries that are competitive in terms of returns generated. Robert identifies that there should be improved ease of investment. “Nations expect a lot from the investments that countries make in countries. Their priority is that the environment should be favorable to invest in businesses.” Bangladesh Investment Development Authority (BIDA) has been able to create awareness about the investment potential of Bangladesh, attracting various nations and ensuring that investments are worthwhile. However, there is always room for improvement. Favorable business environments are dynamic in nature, and with time, business strategies change according to need.

“Life becomes harder for countries that graduate from being an LDC country. Countries are treated equally to other competitors and the previous benefits the nation used to have, no longer apply”

The interest to invest in Bangladesh has been stirred up to the degree that many countries and companies want to enter the Bangladesh market. However, the High Commissioner warns about the experiences of prior investors. “The inflow of new investors is contingent on the experience of prior investors. If they had positive experiences, then more investors would be willing to test new markets.” Companies tend to have experience across various countries, and this builds a reputation for the nation that companies work in. Bangladesh has been building a slippery-slope reputation. On one hand, investors are excited about the prospects of the market growing, with economic zones being established, a middle class that is willing to spend, and the GDP per capita improving. On the flip side, regulations are not always the most favorable for all companies. “Bangladesh has to improve in the ease of doing business and corruption indices. These areas enable the creation of a business environment that sways investors. Therefore, past experiences of companies must be positive. Also, promises have to live up to expectations.” Bangladesh has introduced the Bangla Bond in the London Stock Exchange, with the aim to raise capital for various sectors in Bangladesh. This was a monumental day for Bangladesh, as it began the expansion of the capital market of Bangladesh.
British companies have been operating in Bangladesh for a long time. Companies like Unilever, Standard Chartered Bank, HSBC, and British American Tobacco have been enabling the Bangladesh market. These have been able to establish a good understanding of corporate Bangladesh. Future British companies will want to have the same experiences as their former entrants.

British companies see a lot of potential in the Bangladeshi market. With a large middle-class base, the consumer market in Bangladesh is set to boom. And investing in this sector is the priority as High Commissioner Dickson identifies. “The UK is specialized in high-value services. Therefore, many companies are looking to grow in the financial sector, the consumer finance sector, and the education sector. Upskilling the population in Bangladesh is essential to sustain growth.” High Commissioner Dickson notes that the higher education sector of Bangladesh could have seen an upsurge if the Cross-border Higher Education Act was implemented successfully. British universities have an interest in grooming the young population of Bangladesh.

Along with the education sector, the capital market is the next stage of development for Bangladesh. Gaining private capital investment from the world’s largest center of private capital investment, London. “Bangladesh would need to improve on the Bangla Bond, and package it in a manner that would allow new opportunities to invest.” Although the economic zones are a concept the UK is welcoming, however, British companies are more vested to setup big manufactures

High Commissioner Dickson views education as the key to development for Bangladesh

The High Commissioner is optimistic about the future of Bangladesh and identifies a few keys that would allow it to improve various arenas. Firstly, to enable investments, the process of investing, licensing, setting up, the entire process must be a positive experience for all involved. Secondly, British universities are more than willing to groom Bangladeshi students if the Cross-border Higher Education Act is implemented. Thirdly, raising capital in the London market to increase both presence and activity in the global capital market. And lastly, improving across the indices of ease of doing business and corruption, so that the perception towards Bangladesh is favorable for investors.
The UK foresaw the potential in Bangladesh, and this has allowed further British investments to flow into the economy without much difficulty. To sustain these inflows, as well as increase in the long run, the roadshow will portray Bangladesh as a special place of interest. Not only British investors, but a variety of investors will be able to capitalize on opportunities that Bangladesh presents. High Commissioner Dickson, being a realist optimist, believes, if Bangladesh can improve on its shortcomings, the future is bright. Special Economic Zones and the influx of investors will only peak interests from more British companies, in the long run, leading to more windfall in the future.

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