Dhaka, Bangladesh (BBN) – Low wages and cheap production cost made Bangladesh the top investment destination for Japanese companies in 2015, the Japan External Trade Organsiation (JETRO) said in a survey.
The survey of the JETRO done over 20 countries in Asia and Oceania also said Bangladesh was found to be the most lucrative investment destination both in manufacturing and non-manufacturing sectors like previous year.
The wages in Bangladesh are one fourth of China and half of India, according to the JETRO.
Though the survey rated Bangladesh high for business confidence (diffusion index) with highest 63.3 points, it, however, said that Japanese firms in Bangladesh are struggling with operating profit.
Bangladesh’s position is after Pakistan, Myanmar, India and Sri Lanka, it added.
The annual survey of the JETRO done during October and November 2015 over 9,590 firms interviewing Chief Executive Officers put Bangladesh at the 5th place from the top as 67.4 per cent of Japanese firms opined for future expansion in the country.
The survey of the JETRO on ‘Conditions of Japanese Companies in Asia and Oceania’ said the country can be an attractive destination for Japanese investment as production cost in Bangladesh compared to Japan is less than half.
It is 82 per cent in China, 73 per cent in Vietnam and 80 per cent in India, it noted.
The JETRO, however, recommended creation of congenial business environment to help reduce cost of Japanese companies doing business cutting down operational and running costs.
Some 230 Japanese firms have invested in the country mostly in export processing zones involving US $ 250 million, according to the JETRO.
Foreign Direct Investment (FDI) from Japan, however, showed a downward trend last year. According to the central bank statistics, net inflow of FDI stood at $34.14 million in January-September period of 2015 while the amount was $96.3 0 million in 2014.