Investments and Policy Reforms in Bangladesh

Investment has been one of the major constraints to faster growth in FY10. Gross domestic investment remained stagnant at 24.4% of GDP reflecting both stagnant private and public investment rates. Weaknesses in the investment climate, rather than financing of investment, continue to constrain growth.

Reforms progressed in FY10, despite some setbacks. The ongoing and prospective changes in tax policy and administration could be critical for Bangladesh’s growth prospects. There has also been progress in reducing structural constraints to investment.

There has been some improvement in the institutional framework for facilitating public and private investments such as Special Economic Zones Act, Public-Private Partnership guidelines, Bangladesh Infrastructure Finance Fund. However, there were some setbacks in governance issues, for example, the proposed amendments to the Telecommunication Act and the Anti-Corruption Commission Act were not followed through.