Sustainable Development Goals (SDG)
Sustainable Development Goals (SDG)
SDG Action Plan for BIDA
BIDA was formed in Sept 2017 merging the former BOI and Privatization Commission mainly with the objective to take the inflow of foreign direct investment (FDI) to a new height. BIDA is formed in a particularly auspicious moment of our country’s development when we aspire to become a middle income country by 2021 and a high income one by 2041. These ambitious targets, set by our Hon’ble Prime Minister, have coincided with the 2030 Agenda for Sustainable Development Goals that was adopted by all member states of the United Nations in 2015. This was an agenda to call for action by all member countries to improve the lives of people everywhere by 2030. It is universal, inclusive and indivisible where the leaders have pledged to make the world free from hunger, protect the planet and bring peace and prosperity for every human being in every country by 2030.
Fulfilling the commitments of SDG is a challenging task that has shaken up even the developed parts of the world. This is because in order to advance progress towards SDG, trillions of dollars in annual funding are needed to implement the 2030 Agenda. While many methods are being studied world-wide for strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets, for Bangladesh, the key tools to organize funding has been identified as increased domestic investment and FDI. Bangladesh has already fared well through the MDGs and has its experience to raise our FDI from USD 350 mil in 2001 to USD 1.6 bill in 2015. Based on that the foremost Plan of Action of BIDA is now to find ways and means to attract increased rate of FDI to the country during the next 13 years and to create a revolution in Small and Medium Enterprises (SMEs) that will contribute to the rise in domestic investment that is much needed for the accelerated economic growth.
By 2030, BIDA is determined to be developed as a world class IPA and hope to create Bangladesh as the best investment destination for local and foreign investors with global best practices. It will create an enabling environment for futuristic industrialization with cleaner and greener technology.
While BIDA is already engaged in achieving its objective set out above by formulating its core strategies, policy tools and methods of implementation, applying an SDG lens to the BIDA’s activities highlights some important factors to consider. The SDGs constitute an important part of the “backdrop” against which much of the newly formed BIDA’s work will take place. This development in its policy environment should be reflected in its actions, all of which will encourage to continue identifying opportunities to contribute to SDG implementation. Particular consideration should be given to ways in which BIDA tools can be further adapted to meet the needs of a broader range of investment community, particularly small industries with low capacity. An effort to mainstream SDGs across BIDA’s work will also imply revisiting existing thematic strategies (e.g. innovation strategy, skills strategy, green growth strategy etc ) to make them “SDG aware”, ensuring that they support the achievement of the SDGs where relevant.
Areas of Action:
In the set of seventeen “Global Goals”, only 3 goals i.e. 8, 10 & 17 have been primarily identified as relevant to BIDA with targets 8.1,8.2,8.3,10.b, 17.3.1, 17.5,17.7 out of total targets of 169. However BIDA has relevance to more targets indirectly that will contribute to increasing investment. BIDA’s present plan of actions consists of the following 12 major issues:
- Establishing a world class service delivery system which includes the followings:
- One Stop Service (OSS): The law for a fully functional and automated one stop automated service for the investors has been approved by the cabinet and now the rules are being formulated.
- ORS (Online Registration Service): Fully automated service where all the basic services needed for an investor is already partially functional and will be fully offered online soon.
- Online service tracking system (BOST): In order to monitor the overall service delivery to the investors, BOST will be used to detect infringement or delay in any of the steps enabling the authority to take immediate action.
- BIMS (BIDA Information Management System): In order to maintain and improve efficiency and productivity of BIDA, BIMS process all information under 28 categories through computers. This system stores and maintains all office management issues such as detail and updated information on each officer/staff, office inventory, investors’ database etc.
- Database: A reliable database of investors and investment related information available on the website of BIDA will help leveraging opportunities arising from data revolution and help attracting the attention of more foreign investors.
- Policy reforms: BIDA is focusing on the following reform issues with concerned authorities in the govt:
- Paying taxes takes more time for companies by increasing time to prepare VAT & Corporate income tax return. This reform applies to both the businesses of Dhaka & Chittagong.
- At present local investors have access to credits from banks but in case of foreign owned companies, they have to apply to Bangladesh Bank (BB). Since we maintain that there is no discriminatory treatment for foreign investors, access to credits from banks is needed for them instead of BB like local investors.
- Income Tax related extensive delay in litigation and arbitrary disallowance of expenses need reforms and BIDA is in continuously pursuing that with NBR.
- The present law allows a foreign company to remit the royalty, technical assistance fees, operational service fees, marketing commission etc that is below 6% without the permission of Bangladesh Bank or BIDA. However, it is not practiced in reality. Therefore, BIDA is pursuing for implementation of this law.
- There is a condition on getting electricity whereby customers are required to meet 7% of their electricity needs through solar energy. As it discourages many investors both foreign and local, BIDA has proposed reform on the matter.
Other policy reforms are also being considered.
- Improving Rank in Ease of Doing Business (EoDB): At present Bangladesh ranks 174 in EoDB ranking which improved from 178 last year. To further develop in the ranking, BIDA has taken steps on ten priority areas of improvement with 6 govt ministries/department.
- Establishment of an Economic Corridor: BIDA has been nominated as the authority to establish an economic corridor in the south-western part of the country. BIDA is already at work on getting approval on the draft rules from different ministries and with the help of ADB it hopes to complete the first phase of the corridor within next five years.
- Promotion of Impact Investment for Social & Environmental goals: Impact investing is an investment approach that seeks to create both financial return and positive social and environmental impact. BIDA is in the position to take advantage of the concept and has planned to create its own fund on non-profitability basis to promote primarily small industries.
- Development of Investment Ecosystem: It is a network where investors, entrepreneurs, and other people get a chance to meet and make social connections. It is a capacity building organization and BIDA will serve as this organization in future to channel financial, human, and other resources to help entrepreneurs learn and develop. An improved ecosystem for investment will help in smart manufacturing and high value investments.
- Decentralized investment promotion initiative up to village level: BIDA has already established its branches in major divisions of the country with further plan to extend investment facility to the rural areas.
- Entrepreneurs Development Programme: In order to create entrepreneurs in every village, BIDA has embarked on a mission to create its own training program in selected universities where young people will be recruited to acquire skills and trained to develop as entrepreneurs implementing their own ideas with plan of own business development. Afterwards, from these skilled youths, most competent ones will be sent to the village and remote areas to disseminate their knowledge and provide training to the people to catch up with the advantages of the emerging market opportunities of SDGs.
- Attraction of FDI to social and environmental areas of investment: One of BIDA ‘s major agenda is to attract FDI in areas that will contribute to the improvement of society and environment. This policy particularly aligns with SDG goals which is inclusive and indivisible for all people. Investment that involves technology transfer in areas of free energy, improved water management and sanitation, use of green chemicals, IT, infrastructure etc will help upgrading living condition as well as skills of our people and protect our environment.
- Promote fuller use of blended finance operations and philanthropic flows through the dissemination of good practices and targeted guidance: For the implementation of SDGs, the concept of Blended finance has emerged a major component.It is the strategic use of developmentfinance and philanthropic funds to mobilize private capital flows to emerging and frontier markets. It is specially designed to support progress towards the Sustainable Development Goals. OECD has developed a model of Blended Finance to bring public, philanthropic and private capital together to explore specific opportunities to achieving sustainable economic growth in global growth markets. Official development assistance (ODA), philanthropy, trade, remittances, and investment have all helped address many development challenges, however, existing capital sources are not aligned to maximize impact due to lack of a deliberate design among stakeholders, duplicative efforts, and insufficient infrastructure, among others. BIDA believes that a thoughtful, strategic effort to blend grant and other concessional resources with private investment is essential to achieving exponential progress toward development goals.
- Forming local and international networks:
The only way the SDGs can be achieved in BIDA view is through actions in local communities with promoting SMEs. In this way the bottom up approach will start throughout the whole country. Local Network SDG Action Plan can be a multi-phase strategic implementation programme that will be implemented in next 15 years. BIDA in this endeavour has made a detailed business plan that will work as a guide to the individual entrepreneurs, SMEs as well as big business. The business plan will be advocated through phase 1 as follows:
Phase 1: Local SDG Pioneer programme;
Workshops to raise awareness on SDG program are the primary toolkit to establish networks of pioneers at the local community level. These workshops aim to help identify local priorities and opportunities related to the SDGs, and shine light on the new faces and businesses behind sustainable development in the local market. BIDA will use its divisional level offices for offering workshops on SDG agenda and govt resource at district and Upazilla levels to do the same. In addition to BIDA’s own resource, business chambers/associations, organizations like BDTDC (Bangladesh Trade and Development Council), BISIC (Bangladesh Small & Cottage Industries Corporation), private/multinational companies and NGOs also need to get involved.
Phase 2: Leader forming networks:
Phase 2 expands on Phase 1. Leaders from community levels forming network can then focus on engaging key local stakeholders, set a strategy and take action to implement them. This will present two clear pathways for action: developing partnerships at the local community levels and engaging in activities around the SDG platform throughout the country.
Creating International Network:
Diplomatic activities in Bangladesh missions abroad will be incorporated within BIDA’s framework to effectively discharge investment related duties. As a major part of today’s diplomacy, economic diplomacy could pave the way to generate innumerous avenues creating opportunities for our businesses abroad, inward investments as well as moving up in value chain that is so much needed for our industrialization. To this end, separate wing may be established in missions in important parts of the world for attracting FDI. In this way, network could be established with major business houses, media, multinational companies, financial institutions to close the current gaps that we now have on many issues. Our presence will be more pronounced in this process and in addition to promoting investments, we can easily take up initiatives with foreign bodies on contentious issues that cause hardships to our business/industries, help channeling finance that is so much needed for implementing SDG goals and rapid transfer of knowledge and technology.
- Advocate participation of local industries in UN Global Impact: The UN Global Compactis a principle-based framework for businesses, stating ten principlesin the areas of human rights, labour, the environment and anti-corruption. Under the Global Compact, companies are brought together with UN agencies, labour groups and civil society and it helps to grow partnership with a range of stakeholders with unprecedented networking access. The UN Global Compact provides a universal language for corporate responsibility and provides a framework to guide all businesses regardless of size, complexity or location. Therefore, one of BIDA’s function will be liaise with Global Impact and promote our businesses/industries to regularly participate in it.
At BIDA, actions above are given importance for the time being. However, more actions will emerge as it moves ahead with its agenda.
SDG Plan of Action of BIDA for Private sector
SDGs, also known as global goals are set of 17 goals, is a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. In order to advance progress towards SDG, trillions of dollars in annual funding are needed to implement the 2030 Agenda. While many methods are being studied world-wide for strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets, for Bangladesh, the key tools to organize funding has been identified as increase domestic investment and FDI. Therefore the foremost Plan of Action of BIDA is now to find ways and means to bring a revolution to our SMEs while there is increased focus on attracting FDI.
Although in the set of seventeen “Global Goals”, only 3 goals i.e. 8,10 & 17 have been primarily identified as relevant for BIDA with targets 8.1,8.2,8.3,10.b, 17.3.1, 17.5,17.7 out of total 169 targets, however we feel that BIDA has more to do on the issue of organizing financing helping SMEs to flourish which is under the jurisdiction of M/o Finance.
To address the challenge of SDG, a global think tank called “Business and Sustainable Development Commission” has been at work since 2016 and they have introduced a new economic model. This model has identified new ways of business development with primarily identifying 60 new market opportunities that will contribute to faster expansion of domestic investments thereby boosting economic growth. These markets will be easily accessed by smart, progressive and profit oriented companies. Achieving this goal is a complex challenge and need full, combined and coordinated attention of government, private businesses and civil society and BIDA is putting utmost effort to make avenues for all business entities in the country to take advantage of these emerging markets.
Based on the 60 emerging market opportunities identified by Sustainable Development Commission, BIDA has identified those relevant to our country’s context with the aim to open new investment avenues for our private sectors. However, it would need cooperation of some public institution as well as advocacy by NGOs. Market opportunities are divided into 4 broad categories as below. These are applicable for the present situation as more markets will emerge as we move ahead:
- Food & Agriculture.
- Energy & Materials
- Health & Well being.