Highlights from the Asia Investment Research Special Investment Issue on Bangladesh
As a young woman with ample opportunities in the West, I often get asked about my choice to invest in a Less Economically Developed Country (LEDC). My answer, in short, is that, while there are greater risks in LEDCs, the potential reward in investing early in a growing economy is much higher than in other markets, and you get to do good in the process.
That’s why our friends at Dezan Shira & Associates have published a special 56-page feature on Bangladesh’s economic prospects. This publication is an in-depth look into Bangladesh’s current investment climate for anyone who, like me, is considering taking a chance on Bangladesh. You can download it here for the low price of $10.00: https://www.asiainvestmentresearch.org/issue/bangladesh-special-2022-investment-issue.
A few highlights for me:
The GDP growth rate was 7.8% between 2017 and 2019 and 2.4% during the 2020 COVID pandemic, making Bangladesh one of the few countries that saw growth during this time and speaking to the country’s resilience. The GDP grew 5.2% in the fiscal year ending June 2021 and is expected to grow 7.4% in the ongoing fiscal year – much better than that of its regional peers. The government has provided substantial financial support to Venture Capital companies during the pandemic and secured loans from foreign agencies for COVID recovery. The economy's most critical challenges ahead are weak financial markets (bonds, stocks, and derivatives), poor regulation of these markets, and bureaucracy.
The UN will take Bangladesh off its Least Developed Countries list by 2026 due to progress made in Human Development Indices (life expectancy, years of schooling, infant and maternal mortality rates, people below the poverty line, and per capita income), and economic and environmental vulnerabilities. However, the country will still enjoy preferential market access to the UK and EU until 2031. The government is preparing for this through aggressive investments in infrastructure, special economic zones, and liberalizing relevant policies.
There has been substantial and ongoing foreign investment, particularly from Asian countries, including Japan, South Korea, and China, in pharmaceuticals, fintech, renewable energy, e-commerce, infrastructure, and manufacturing. Personally, I don’t miss Amazon, UberEats, or Venmo when I’m here because of apps like Daraz (e-commerce - owned by Alibaba), FoodPanda (food delivery – excellent options since Dhaka is a hidden gem when it comes to restaurants), Chaldal (groceries), Pathao (logistics), and BKash (payments), which serve as local substitutes and offer a similar range of products and services. The biggest challenge on an everyday level is traffic and getting around. Still, because of infrastructure projects like the Padma Bridge, the Shahjalal Airport Expansion, the Dhaka Massive Rapid Transit projects, and the several Expressway projects, we can expect to get millions of people moving with ease within the next five years.