Business leaders in Bangladesh continue to express growing concern over the nation’s investment climate. A mix of challenges — including gas shortages, the ongoing dollar crisis, higher bank interest rates, political instability, and ambiguity surrounding labor law reforms — has cast a shadow over the country’s overall investment environment. Entrepreneurs are reluctant to undertake new ventures, while many existing investments are facing mounting risks. Adding to the difficulties, businesses are struggling to open letters of credit (LCs) for importing capital machinery.
Bank interest rates have recently risen to 16 percent. Entrepreneurs say that no business can operate sustainably under such rates, making it impossible to create an environment conducive to new investment. They also believe that the crisis is not only economic but also rooted in political instability, which has eroded confidence among investors.
Many previously busy factories are now partially closed, and production has been reduced in some areas. Thousands of workers are losing their jobs. Business associations note that political uncertainty has greatly worsened the crisis. They warn that unless domestic challenges are addressed, it will be difficult for the private sector to remain competitive. According to them, if the government can quickly restore stability and adopt investor-friendly policies, confidence could return. They stress the importance of ensuring transparency in the banking sector, uninterrupted gas and electricity supply, and clarity in labor law reforms. They also point out that political consensus has become essential for economic recovery; otherwise, the current uncertainty in business and trade could turn into a prolonged recession.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Bangladesh Pratidin that “a chaotic situation has emerged overall. No one in society has confidence in anything. Bank interest rates are high, and although the gas crisis has slightly eased, it could worsen again. The environment is simply not investment-friendly. Statistics from the past year also reflect this reality.” He added, “Neither foreign nor domestic investment is happening. What we see now are just the completion of previously unfinished projects. To overcome this, everyone must work together, and even the interim government should focus on this issue.”
Dr. Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said that “the most essential element for business and investment is confidence — and that is what’s missing now. The longer the political uncertainty continues, the longer it will take for the economy to recover. Everything is at a standstill now, and this stagnation will persist until the election is over.”
He further noted, “Investors look for political stability before making decisions. When uncertainty prevails, they lose interest. Not only investment but other economic indicators are also declining.”
Bd-pratidin English/ ANI
