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Foreign direct investment (FDI) generates economic benefits to the recipient country through positive impacts on the real economy resulting from physical capital formation, transfer of technology and know-how (managerial skills), increased domestic competition, expansion of markets and foreign trade. Bangladesh can gain from the FDI flow, provided she is able to allocate and manage resources efficiently, keeping in view concomitant liabilities of profit and income payments.
   FDI now occupies a significant place in Bangladesh’s economic landscape. Therefore, recording comprehensive, internationally comparable, and up to date statistics on FDI is a prerequisite for economic analysis and policy making. It has been pointed out that there has been incomplete reporting of FDI levels in Bangladesh in international publications, including those of the World Bank (WB). This could be due to the fact that FDI information is extracted from balance of payments (BOP) statements which in the past had under recorded these flows. Unfortunately, Board of Investment (BOI) in our country, as in many developing countries, has not been a major source of FDI information. The central bank also does not have any mechanism to get data on actual FDI inflow.
   The quantum of FDI inflows is only partly a function of the degree of liberalization of the investment regime. Some studies have shown that the package of incentives for foreign investors is a necessary but not sufficient condition for robust growth of FDI. Relative risks and opportunities for high returns generally guide investor interest. The investment regime in Bangladesh, in comparison with other South Asian countries, would appear to be the most liberal in view of the absence of any prior approval requirement or limits on foreign equity participation. There are no limits either on repatriation of profits or on income. However, as in other South Asian countries, licensing regulations apply to private activities in energy and telecoms sectors. Nevertheless, Bangladesh is still in the preliminary phase of FDI flows.
   Poor law and order, rising Islamic extremism (under the protection and patronage of the present government), inefficient and hassling bureaucracy, poor governance, flagrant radicalization and politicization of every governmental organ (including education) giving rise to free style, systemic corruption and anomalies coupled with awful inefficiency and ignorance, lack of accountability and transparency everywhere in our public life, ‘power hungry’ and corrupt character of politicians resulting in extreme ‘mutual untrust’ and ‘hostile’ politics, hartals, poor infrastructure and communication, miserable state of stock market, slow process of privatization and reform, and higher cost of doing business are the major impediments to FDI (which makes up 85—90 per cent of private capital flow) flow into Bangladesh. Bangladesh also suffers from negative imaging problem as it is thought to be a country with abject poverty, flood, cyclone, frequent hartal, etc. The country’s ranking in the global FDI index (of the 140 countries) dipped to 125th in 2000—01. However, the IMF team that visited the country recently has praised the recent macro economic achievements of the government and the reform programme initiated by the government in recent times.
   Corruption is everywhere, but we are equally corrupt and inefficient. If we were corrupt but efficient, the situation could have been better. Further, both FDI and private debt inflows in Bangladesh have largely financed imports of machinery and equipment—a sign that Bangladesh is only in the preliminary phase of DFI flows.
   Since its inception last November the Anti Corruption Commission (ACC) has made regrettably little progress, leading to the inescapable suspicion that, fine words to the contrary, the government is not at all sincere about combating corruption. The ACC, still limping, could not proceed against any ‘high profile’ corruptors as yet. Seemingly, it has also been subjugated by or made failed against that ‘heavyweight’ corruptors. Hence, the authority and independence of the commission are questionable. It is clear that the ACC will continue to be ineffectual until the government gives it the support that it needs, and it is equally clear that now the commission has been formed but the government has zero interest in making it functional. Even the Ombudsman’s office despite the passage of law in this regard, is still hanging fire.
   Bangladesh’s appeal as a destination of FDI has largely eroded due to the government’s failure to fulfill its promises on infrastructure, law and order, property rights, and judicial and police reforms, said World Bank Country Director Christine I Wallich at a recent past meeting of Foreign Investors’ Chamber of Commerce and Industry (Ficci) in Dhaka.
   ‘The story of FDI here is one of the promises and major disappointments. On paper, Bangladesh can boast of having the most liberal investment regime in South Asia and mid-1990s showed considerable investor interest in Bangladesh, especially in gas exploration and development and by independent power producers. Unfortunately, that enthusiasm has died down…...’ the WB country chief said.
   She said though deficit and unreliable supply of power badly affect the country’s investment climate, yet ‘we are dismayed that urgently needed new generation plants seem to be delayed by a consistent pattern of questionable tendering and re-tendering.’
   According to the World Investment Report 2004 released globally by United Nations Conference on Trade and Development (Unctad) recently, the country received $121 million in FDI in 2003, up from $52 million in 2002, recording a 133 per cent growth over the year. The FDI growth was 36 per cent in the region, 24 per cent in India, 71 per cent in Pakistan and 16 per cent in Sri Lanka in the same period.
   When global FDI inflows experienced 17.6 per cent negative growth, performance of South Asian countries is impressive.
   Going deep into the UN report that mentioned a spectacular FDI growth achieved by Bangladesh in 2003, Christine Wallich, a Yale economist, said, though the growth is the highest in South Asia, the country remains nearly at the bottom in terms of volume of FDI.
   She said in absolute terms the FDI inflow is even lower than Afghanistan, and on per capita basis it is the lowest in the region.
   ‘Bangladesh is not a failed country but a fragile one,’ the WB high official maintained. Because, she said, quality and transparency in public administration is low, infrastructure is lacking, state owned enterprises are a burden to economy, and higher and technical education are sorely deficient.
   She said for long the substandard services and facilities at Chittagong port have been polluting the investment climate, but still there are no visible steps to correct the situation.
   Hartals and other mindless political violence may divert FDI flow to other countries, specially the roaring economies of China and India. The competition to get FDI has toughened since the 9/11, as many multinational corporations of the US and other countries have become warier of security situation while considering investment in a country.
   ‘The competition among the FDI destinations will be stiffer after expiry of the multifibre arrangement (MFA). So, Bangladesh will face a double challenge after the MFA phase-out—one would be to sustain its readymade garment sector and the other to retain its position as a competitive FDI destination,’ said UNDP representative in Bangladesh Jorgen Lissner recently.
   ‘But given the present culture of confrontational politics, it seems political situation will be the biggest challenge for Bangladesh in getting FDI and boasting export in the coming days,’ he warned.
   Lissner cautioned, if the country’s image cannot be improved, foreign investors won’t be attracted to invest here, no matter what the incentives are.
   According to Lissner, Bangladesh needs a comprehensive strategy to raise its foreign exchange reserves through attracting more FDI and boasting export, development assistance and remittance.
   In this connection he said Bangladesh’s overseas missions, though overmanned, do not have the skills to properly negotiate with foreign countries to boast export and FDI. The missions should also negotiate to provide legal help, good working environment and competitive salary for Bangladeshi expatriate workers.
   Though the quota free challenge is looming over the RMG sector—the thrust sector of economy, the government has cancelled a proposal for central bonded warehouses in export processing zones, which would help exporters reduce lead time. The investment for backward linkage industries for the RMG sector is already overdue. The country is yet to withdraw restriction on foreign investment in RMG sector outside the export processing zones, which narrows the possibility of a much stronger RMG sector with foreign investment.
   While diplomats, business circles and donor representatives expect a pro-active response of the government to all this plethora of ills and maladies, the potential Japanese investors in the recent past brought allegations mainly about government officials’ demand of ‘bribe’ for customs clearance, delay in issuance of visas and work permits, permission for selling products and other services. They complained about poor law and order, daylight robbery and theft of materials by armed mafia at their construction sites outside the capital. Besides they termed the official procedure related to trade and investment ‘in actual practice cumbersome’ and that the BOI and BEPZA instead of giving ‘one stop’ service are giving ‘full stop’ service to investors. Their survey report further alleged that immigration and tender procedure in the public and other sectors are time consuming. They consider the performance of the Chittagong Port hopelessly poor. The report also included great dissatisfaction over disruption in power and telecoms and gas. More importantly, they find lack of continuity and abrupt changes in the national policies for long term trade and industrialization in the country. In a similar vein, the report published by the US Trade Centre on Country Commercial Report cited the same impediments to investment in Bangladesh.
   According to business circles, practically nothing is conducive to even local investment, let alone foreign investment. Foreign investors before taking any decision get dismayed by poor or no investment by local entrepreneurs. Huge quantity of idle money lying in banks due to lack of investment bears the sign of the grim picture of investment scenario in the country. It has been reported last August that the banks are extremely concerned for finding no takers for around Tk 12,000 crore lying idle. ‘Cut-throat’ interest rate on bank loans, frequent harassment for extortion/bribe by concerned agencies, invisible cost, sense of insecurity of life and investment, delay in decision making, and lack of infrastructure facilities are the major obstacles to business and investment in our country.
   The reaction of the BOI to the reported allegation of the Japanese investors about the impotence of the services and the BOI is patently silly. It is Bangladesh that is desperate of FDI, not Japan. However, all FDI proposals cannot be accepted if they are destructive for our local industries or go in any way against national interest. We are to be selective. The FDIs are not holy cows that cannot be sacrificed.
   To woo investment deep rooted problems have to be solved urgently, otherwise the best of the policies of the world will simply go down the drain and we will verily end up with a pie in the sky in our wishful thinking or pipe dream. Investors look beyond the government’s occasional special drives to see if the law and order has become a permanent fixture of a stable kind of governance. Flashes of temporary success cannot be a clincher of big money investment. However, considerable improvement has recently been made by the government in this regard through forming crime bursting elite force RAB (Rapid Action Battalion). The RAB is specially dealing with an iron hand with the listed ‘professional killers’ and ‘hardened criminals’ across the country. Let it be sustained for ever.
   And the BOI should calculate inflows as per Unctad’s clear guidelines. Because foreign investors cannot rely on Bangladesh’s statistics as they had been fabricated in the past in order to reap evil political gains.
   According to the BOI statistics, FDI grew 49.7 per cent to $660.8million last year over the previous year’s figure. The target for the year 2004 was $600 million. The country received $441.4 million FDI in 2003, which was $328.3 million in 2002, clocking a 34 per cent growth. The total FDI registration was $368 million in 2003, of which $328 million was actually invested, which shows that about 90 per cent registration turns into real investment.
   The BOI has projected an FDI target of $800 million in 2005 and $1,000 million in 2006. Current positive trends of FDI say that this year’s FDI target would be fulfilled.
   Finally, it is a recognized fact and there is now a growing realization that a vibrant and dynamic private sector is the key to speedy economic progress and sustained growth.
   Further broad based and deep rooted reforms of the economic entities, including the banking and financial sectors, in an efficient and orderly manner are therefore urgent to boast FDI flow in Bangladesh in the race of compulsive globalization. And significant progress is needed in critical and inward looking government policy and behaviour. And in the context of changed scenario in world politics, the Government must take stern measures to curb corruption and radicalism, and restore law and order for improving the investment climate.
   Email: msaifulh2003@yahoo.com

If Yasser Arafat was the Palestinian leader who gave his people an identity on the world stage and the concept of nationhood, Israel’s Ariel Sharon has emerged as his country’s great coloniser. Through unlimited support from the Bush administration and sheer determination, he is taking a crucial step in denying the Palestinians their state by evacuating illegal settlements from Gaza.
   First, Sharon used President George W, Bush’s deliberate benign neglect of the Israeli-Palestinian confrontation in the first term to reoccupy Palestinian towns, destroy the largely European-financed infrastructure of the Palestinian Authority, including its fledgling airport and Arafat’s planes and helicopters, to confine Arafat to his bombed-out headquarters.
   Next, he built a wall around Israel by grabbing more occupied land separating Palestinians from their farms and livelihood and is in the final phase of blocking off East Jerusalem, the proposed capital of the hoped-for Palestinian state, from Palestinians.
   The Gaza Strip, with a population of 1.4 million Palestinians and 8,000 Israeli settlers, has always been a millstone around Israel’s neck becauseit was using up much Israeli force and money to keep their barren outposts. Meanwhile, the demographic picture was becoming clearer by the day, that if Israel held on to all of the occupied land, the Jews would become a minority. More Jews choose to live outside Israel than are in the state of Israel.
   The solution, in Sharon’s eyes, was in unilaterally evacuating the Gaza Strip in order to consolidate Israeli hold on occupied West Bank. The Bush administration’s response was to put forward a roadmap, which Sharon set about demolishing while paying lip service to it. And, in a significant overt move of support, President Bush gave his imprimatur to Israel’s major settlements on the West Bank and declared that the right of return of refugees, who left or were thrown out of Israel on its formation in 1948, could not be availed of in the state of Israel. Thus two of the crucial points of difference between the Israelis and Palestinians have been awarded to the Israelis before negotiations can begin.
   The Palestinians’ sufferings have many facets, but among the hardest for them to bear is the supineness of the European Union and Russia, apart from the United Nations, in falling behind American moves and actions in the name of the Quartet. Britain’s Tony Blair, who thought he could play an independent role in the Israeli-Palestinian conflict, if only to try to remove the stain of being Bush’s ‘poodle’ on Iraq, found out the hard way that as far as Israel was concerned, there was only one mediator in the world. And now the former American president of the World Bank has been appointed as the Quartet’s co-ordinator on assistance to the Palestinians.
   His contribution thus far is to arrange for money for buying the greenhouses the settlers leave behind in Gaza. Israel has moved from unilateralism to a minimal form of co-ordination with the Palestinian Authority. The evacuation of the settlers and the military infrastructure is expected to last till October, and even after the Israelis leave Gaza; they will control Palestinians’ access to the West Bank and its sea borders and airspace. The control of the Gaza crossing into Egypt at Rafah is still under discussion. The seaport, provisionally agreed to, will take two to three years to build.
   The Gaza withdrawal has set in train a chain of Palestinian events, with the Fatah faction of the Palestinian Authority headed by Mahmoud Abbas in a contest with the Hamas movement contesting the honour of chasing Israelis out of Gaza. Hamas has refused to disarm its militia and, given its social and humanitarian role among Gazans, is popular, a factor that led the PA to postpone parliamentary elections till January. Hamas has agreed not to initiate action against Israelis during their withdrawal.
   In asserting his movement’s position, the Hamas leader Ismail Haniya has asserted at a rare press conference, ‘Hamas confirms it is committed to armed resistance; it is our strategic choice until the end of the occupation of our land. Our land, including Jerusalem, is still occupied, the refugees are still deported, the wall and the settlements are still eating more and more of our land’.
   Despite the turmoil in Israel’s orthodox Jewish community Sharon’s decision to leave Gaza has caused (for them, God has given them the right to all of the land of what they call Israel), the Prime Minister’s script for the future is clear. After evacuating Gaza and four isolated settlements on the West Bank, the Palestinians will be preoccupied with contesting the control of Gaza and possible violent incidents will give Israelis the excuse that Palestinians cannot govern the Gaza Strip, let alone the West Bank. Sharon, meanwhile, would have acquired an international halo of having the boldness to evacuate the Gaza Strip.
   Yet Sharon’s colonialism is a gamble that might not pay off, storing instead the seeds of conflict for generations. If Israel and its mentor, the United States, believe that by dismissing the refugees’ right of return without negotiations on the numbers that would be permitted to go to Israel proper and others compensated, the emotional and heartbreaking issues of Palestinians’ dispossession can be solved, they are living in a fool’s paradise. Similarly, it would be foolish to believe that by walling off East
   Jerusalem from Palestinians, Israelis could deny them their capital. Israel lives and prospers, thanks to the open-ended support it receives from the United States (there are more Jews living in the US than there are in Israel). But even the sole superpower cannot bring about peace between Israelis and Palestinians through waving aside the World Court’s decision on the illegality of the wall or generations of refugees’ most cherished desire to return home.
   Sharon is being true to the name of bulldozer he has earned through the tempestuous history he has lived as commander of Unit 101 against Palestinians in the 1950s, in mounting an unauthorised attack on Mitla Pass in the war of 1956, to the successful crossing of the Suez Canal in 1973 and the infamous invasion of Lebanon in 1982. His last throw in gobbling up 10 per cent of more occupied Palestinian land and denying Palestinians East Jerusalem behind a new de facto border will come to haunt him and the state of Israel. Nor will President Bush’s hollow two-state solution earn him brownie points.

Beauty is truth, Keats asserted in a famous line debated in our letters column this week, and truth beauty - ‘that is all ye know on earth, and all ye need to know.’ Oh no it isn’t. You also need to know, which he apparently didn’t, which distinguished adventurer stared with eagle eyes at the Pacific, while all his men looked at each other with a wild surmise, silent, upon a peak in Darien.
   Keats thought it was Hernando Cortez (1485-1547), or as he specifically calls him, ‘stout Cortez’. In fact it was Vasco Nuñez de Balboa (1475-1517). Generations, having read Keats, have gone through their lives nursing one major delusion and possibly one minor one. I had always, until corrected, dutifully assumed that the man on the peak was Cortez; I had also seen him, in my mind’s eye, as fat. In fact, Keats was using ‘stout’ to mean resolute and reliable rather than merely obese. And quite possibly only employing it to keep up the scansion.
   It seems such a shame that no one pointed out the error at the time. ‘Come on, Keats,’ you might have expected his publisher to chide him, ‘you’ve got the wrong conquistador on the top of your hill. What’s more, if you make it Balboa, you won’t have to pad out the line. ‘Or like Balboa, when with eagle eyes/ He stared at the Pacific, etc ...’ There! That sounds better already.’
   But Cortez it was, and still is in every edition, though nowadays many readers know it is wrong. Indeed, in any league table of errors by famous poets, it’s at least Man United and possibly even Chelsea. Which is odd, because there’s a section called Errors of Authors in my very old edition of Brewer where Keats escapes unnoticed. Byron is there, for having Xerxes gazing on thousands of ships off Salamis when according to Brewer’s calculations there could not have been more than 800; and Scott, for ‘several gross errors’ in a passage about a woman using pepper to make cream tarts; and Shakespeare for, among other blunders, having cliffs at cliffless Elsinore.
   What’s more, the Keats poem in question - On First Looking Into Chapman’s Homer, completed in 1816 - appeared at a time when it seemed accepted that writers in error could and should be amended by others. Nahum Tate, who rewrote Lear to give it a happy ending, had been dead since 1715, but Thomas Bowdler was, in the very year of Keats’s inspiration, hard at work on a 10-volume edition of Shakespeare purged of the naughty bits. ‘Those words and expressions are omitted’ he promised respectable England,’ which cannot with propriety be read aloud in a family.’
   Where, one might ask, is the propriety of allowing words to be read aloud in a family which would leave impressionable young minds with the vulgar delusion that Cortez first glimpsed the Pacific, rather than stout Balboa?
   It will no doubt be said that the works of great poets should not be interfered with by meddlers and pedants. I have even seen it asserted that Keats was right in some mystical sense which I do not quite understand, as if the interests of euphony superseded those of truth. Were that the poet’s intention, he should have said so, as Betjeman does when he populates a graveyard in Dorset with people he knew very well weren’t buried there. (‘While Tranter Reuben, TS Eliot, HG Wells and Edith Sitwell lie in Mellstock churchyard now.’)
   But in fact there’s a long tradition of updating the works of earlier hands for the avoidance of error. One has only to compare what has happened over the years to some very famous lines in Anglican hymnals.
   The most notable example of all is the pilgrim’s hymn of Bunyan’s so often sung at funerals, the current version of which is wondrously changed from what poor Bunyan intended. Just try getting the original version programmed at a funeral in the more correct of Anglican churches: it’s absolutely forbidden.
   For myself, I would leave both Keats and Bunyan alone. But why, if that’s the right principle, can the works of other great hands be meddled with and amended? The case that particularly riles me is the extra movement that has recently been tacked on to Holst’s suite The Planets. Holst intended the work to end with a wordless chorus dying away to nothing. Then someone discovered Pluto.
   ‘There’s another planet here, Holst’ the composer was told. ‘Fancy adding another movement?’
   Holst thanked them politely, but said he would rather not. And later the weight of expert opinion came round to the view that Pluto wasn’t a planet at all. Yet concert planners now regularly override his opinions. If Keats can be left to wallow in error, why shouldn’t Holst be allowed to wallow in truth?
   This article first appeared in the Guardian