Bangladesh Gets a Boost with Increased IFC Support
August 21, 2012 - Bangladesh hopes that economic growth will bring prosperity and a better quality of life to its 160 million people. IFC, with a rapidly growing investment portfolio complementing a solid advisory base to facilitate investment climate reform and support to small entrepreneurs, believes that the country’s economy is set to thrive.
The road to development for climatically vulnerable Bangladesh has not been an easy one. While in recent years, human development indicators have improved in this vibrant democracy, a third of its people continue to live below the poverty line. Despite recent tight liquidity conditions and governance challenges, the country's economic growth continued at approximately 6 percent for the 15thconsecutive year.
Acting EVP and CEO Rashad Kaldany said, “IFC aims to grow its investment portfolio from $250 million in recent years to beyond $400-600 million in the coming fiscal year,” in interviews with Financial Express and BDnews24.comin Dhaka.
Serving Private Sector in the Frontier
Recent IFC investments in Bangladesh include a short-term SME liquidity facility to four partner banks to support key clients during a liquidity squeeze. IFC’s support to Frontier Fund, Bangladesh’s first private equity fund, is investing growth capital to help local businesses expand. Investments in agri-processing company Pran are helping expand opportunities for farmers – continuing Bangladesh’s path towards food self-sufficiency -- as well as provide improved consumer food products for those at the base of the pyramid.
Committed to supporting Bangladesh’s efforts to implement regulatory reforms to stimulate private sector growth, IFC has made important contributions in easing business in recent years.
IFC’s support to the Registrar of Joint Stock Companies and Firms resulted in halving the time taken to start a business.
The time taken to register property has halved too, thanks to IFC’s interventions.
IFC-supported tax e-portal is making paying taxes more transparent, easier, and faster.
Reforms initiated at the Dhaka Customs House have resulted in trade compliance cost savings of over $8 million in FY12.
Joint IFC advisory and investment teams’ work with the Board of Investment is resulting in approvals for foreign investments taking just a few weeks, versus up to an entire year in the past.
IFC’s support to establishing the arbitration center has helped mediate and resolve disputes faster, with over 50 cases in the first eight months of operation.
Support to Strategic Sectors
Impressed with his site visit to the Hamza textile factory just outside Dhaka, Kaldany spoke of advisory and financial support to promote efficient use of energy and water. The textile sector is the country’s largest export earner and employs over 3.5 million workers, of which 85 percent are women.
IFC’s advisory teams have worked with garment industry associations and supported environmental compliance assessment in 250 factories, developed toolkits and other training materials including an online marketplace to enhance environmental awareness, including effluent and waste water management and treatment. IFC’s cleaner production assessment of 12 factories and subsequent implementation of recommendations by these factories resulted in energy, chemicals and water use savings.
In his meetings with central bank governor, other official counterparts, and private sector clients, Kaldany shared IFC’s interest in supporting Bangladesh, through both investment and advisory interventions, strengthening the financial, textiles, and agribusiness sectors; support for climate change efforts, improving access to finance to the under-served, and support for essential infrastructure including power generation.