Foreign investors have not yet turned back, but keep their close eyes on what happens next in Bangladesh after deadly cafe attack, people familiar with foreign investment said. But they said despite attacks Bangladesh’s low labour costs and efficient supply chain, especially in readymade garment industry, remain attractive to investors. However, a number of international expert groups predicted that the terror attacks could cast a shadow on the country’s foreign investment future. The terrorists killed 22 people including 17 foreigners during the Holey Artisan cafe attack in Dhaka early this month. The so-called Islamic State claimed the responsibility while all attackers were Bangladeshis. “Investors appear to be taking a ‘wait and see’ approach,” said a local entrepreneur who has returned home last week after visiting four EU countries. He said they were watching developments closely and how the government deals with the situation. According to the Asian Development Bank, the recent terror attack in Dhaka could affect investors’ confidence and undermine growth. In the same breath, global credit-rating agency Moody’s said terrorist attacks may erode investor confidence that could cast an adverse impact on Bangladesh’s ability to attract Direct Foreign Investment. Hasnain Malik, the regional head at the world’s leading investment firm Exotix Partners, told the WSJ that multinationals would “unquestionably” restrict their staff travel to the country. But he said it was unlikely companies would pull out of Bangladesh. “That would be a leap too far, given the country’s advantages such as low costs and tariffs and a scaled and experienced supply chain,” he said. The US-based Fitch Group’s BMI Research, in a report released last month, identified 10 emerging markets of the future, including Bangladesh, are set to become new drivers of economic growth over the next 10 years. In the current edition of Global Finance, it published an article titled, “Bangladesh: Full Of Potential”. It wrote that the fast-growing nation is actively seeking FDI, but foreign investors must contend with endemic corruption and layers of bureaucracy.” Unfortunately, terrorism is now the new addition to those two cautions. The recent attack on the restaurant frequented by foreigners has marred all the positive news coming out of Bangladesh and made investors think twice before coming in Bangladesh. Bangladesh’s economic expansion has been exceptionally stable, averaging 6.2% year-on-year over the last decade, amid political transitions, natural disasters and temporary factory shutdowns related to labour conditions. Bangladesh is one of the few countries in Asia Pacific that has continued to clock growth in exports as global demand has weakened.
