Bangladesh’s political instability drives foreign investors away

Leading business figures in Bangladesh have expressed concern that persistent political uncertainty is discouraging capital commitments, though they remain hopeful that free and credible parliamentary elections in February could help restore investor confidence.

Entrepreneurs say stability in government represents just one element needed to attract capital, yet it remains vital because disruption undermines policy consistency and diminishes business leaders’ willingness to commit resources. The challenge grows more acute for international investors, who, unlike domestic counterparts, can freely relocate their money across borders. These overseas investors behave like migrating birds, settling only where they find both security and adequate profit potential. Joint partnerships with local firms become difficult when trustworthy collaborators prove scarce.

Bangladesh currently ranks in the bottom tier of 50 nations in the World Bank’s Business Ready assessment, reflecting systemic obstacles. The nation’s ratio of private investment to gross domestic product has stalled near 23 percent for years, falling short of the 28 percent benchmark. Foreign direct investment declined from $1.14 billion in 2021 to merely $710 million in 2023, with the most recent quarter marking an 11-year low at $104 million. The author previously served as vice chancellor at Dhaka University.