THE country's Investment scenario continued to remain sluggish In 1994 for the fourth consecutive year.

Although the government announced some more incentives for the investors. Including reducing the corporate tax rate by five per cent during the year and the commercial banks were laden with excess liquidity. the Investment rate failed to pick up and seemed to remain stagnant.

The rate of Investment Increased slightly from 13.3 per cent of the GDP in 1992 93 to 14.5 per cent in 1993-94. but It still remained below official expectations.

On several occasions throughout the year, both government officials and the donor community expressed concern at the slow rate of growth In Investments in the country. Both sides agreed that the rate of investment has to climb up to around 18 per cent to achieve a 7-8 per cent growth rale of the economy, which is essential to make a dent on'the country's poverty situation.

The comparatively poor rate of Investment In the country, in spite of the existing macro economic stability. Is baffling the policy makers, who remain perplexed about the underlying reasons.

Economic analysts, however. point out that the slow growth of investments is due to the fact that the private Investors continue to remain shy because of the sloth in implementation of the government's economic reform policies, the poor rate of public sector expenditure because of the delay In implementing the Annual Development Plan (ADP) pro jects, and due to the Increased cautiousness of the banks In making new loans.

The Commercial banks, saddled with excess liquidity io the tune of around Tk 2.500 crore, remained somewhat over-cautious to provide new loans for investments because of stiff loan classification and other measures prescribed by the Bangladesh Bank under the Financial Sector Reform Project.

The totrfl investment projects approved by the Board of Investment In 1993-94 was valued at 1,267 million US dol lars compared to 145 million dollars In 1992-93 The Bangladesh Small and Cottage Industries Corporation made 85 million dollars In Invest ments in 1993-94 as against 121 million dollars during the previous fiscal year. Another 53 million dollars were Invested In the Dhaka Export Processing Zone In 1993-94.

Another 150 million dollars

were Invested in the share market by foreign investors during the year.

Meanwhile, a government last force headed by M Morshed Khan. Special Envoy to the Prime Minister. Identified 14 reasons for the country's failure to attract foreign direct Investments.

The reasons identified include: a poor Image of the country abroad: Inadequate infrastructure: non-availability of a one-stop approval facility for the investors: failure to. Implement policy initiatives* and the lack of coordination among different ministries; labour tfn--rest; political unreal and hartals: bottlenecks in customs clearance; scarcity of skilled manpower: corruption in government offices: poor banking system: and high rate of inter-' est on loans for investment

Last year the government took a bomber of Initiatives to attract foreign Investment into, the country. Special efforts, were taken to inform foreign. Investors about the opportunities in Bangladesh during the Prime Minister's official visit. to Japan and Malaysia. The Finance Minister also led a business delegation to Singapore and held two Investment seminars in that city-state.

A powerful Japanese mission. the Kledanran Mission.-comprising of private business leaders also visited Bangladesh during the year.