Looking at the discussion around last week’s “BD Investment Conference” in NY, there appears to be an active discussion going on among NRBs, especially fund managers, I-bankers, Analysts, etc as to whether CTG/Army/State Of Emergency/Possibly Delayed Polls (beyond Dec 08) is improving investment scenario in BD.

Reasons:
1. BD tagged as one of the hottest “Emerging Markets” (EM in fund lingo). Goldman Sachs named BD as one of the N-11 countries (next 11 to emerge after BRICs). JP Morgan identifying BD as one of the “next 5″. Telco analysts named BD as one of the hottest telco markets among developing countries (current subs 30mm+)
2. The simultaneous rise of multiple funds dedicated to BD investing, who are simultaneously an indicator, and an enabler of “bullish on BD” scenarios
3. Impending Grameenphone IPO in June (or later), planned AKTel and BanglaLink IPOs later; merger rumors between Telcos;
4. General heat around EM category, and the search for the “untapped EMs” (for fund returns maximization, your biggest bang for buck is an EM that no one has spotted yet– get in cheap and reap max returns)

Results:
1. CTG getting credit for a global trend, one that has nothing to do with their activities.
2. CTG getting credit for opening up of markets and double digit growth (esp. in Telco) that actually occurred during last 10 years (Grameenphone greenlit under AL, Telco/Media free-for all under BNP, etc)
3.CTG, facing a gigantic economic crisis at home that it has failed to resolve, using the FDI interest as counter-evidence
4. The dangerous idea among many in shushil samaj, as well as NRBs, that military backed democracy is best for FDI

Rather:
1. CTG has over last year caused a major implosion in business community through it’s anti-corruption drive
2. ACC’s graft drive has resulted in total freeze-up of banking sector, with neither inflows nor outflows. Analysts argue that overheating of Stock Market (a bubble that is now deflating) is partially because it is one sector where you can invest your money without risking a knock from ACC.
3. BTRC has decisively, repeatedly, hobbled the Telco sector and shut down innovations: disproportionate punishments VoIP scandal , Submarine cable fiasco, BTRC’s protection of BTTB’s inefficient monopoly, various punitive measures regarding advertising “over-reach” (AKTel Golden Call, Grameenphone Thai Airways partnership), and law restricting VoIP company ownership to only “100″ Bangladeshi owned co’s” (this was discussed via newspaper, do not know if it was made law).

A response came from an interesting quarter today. British Ambassador Anwar Chowdhury, who has been very lenient on CTG so far, had this to say while announcing Vodafone’s planned investment:
“A democratic government could attract maximum foreign investment.”

Vodafone to invest in Bangladesh: UK envoy

Tue, Jan 29th, 2008 7:15 pm BdST
Dhaka, Jan 29 (bdnews24.com) – The British high commissioner Tuesday said Vodafone Group, the largest mobile network operator in the world by turnover, would invest in Bangladesh.

“Vodafone, a billion dollar company, is coming to invest in Bangladesh. This is exactly what Bangladesh needs—foreign direct investment,” Anwar Choudhury told reporters after attending a ceremony at Dhaka Sheraton Hotel.

He said investment in Bangladesh was improving after hitting a low because of the anticorruption drive last year.

Choudhury, however, said a democratic government could attract maximum foreign investment.

He did not say when Vodafone, headquartered in Newbury, Berkshire in England, would make the investment.

The company has a market value of about £100 billion (December 2007) and has equity interests in 25 countries and Partner Networks (networks in which it has no equity stake) in a further 39 countries.

Vodafone Group has a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the company’s subsidiary undertakings, joint ventures, associated undertakings and investments.

In the United States, the group’s associated undertaking operates as Verizon Wireless. During the last two financial years, the group has also entered into arrangements with network operators in countries where the group does not hold an equity stake.

Vodafone has a partner network agreement with Telekom Malaysia (TM), covering three subsidiaries—Celcom (Malaysia), XL (Indonesia) and Dialog (Sri Lanka).

In Bangladesh, TM operates a joint venture, TM International (Bangladesh) with AK Khan & Co, established in 1996.

The venture—70 percent owned by TM—operates under the brand name AKTEL, one of the countrywide GSM mobile communications solutions brands.

Anwar Choudhury attended the launch of an exclusive housing project for the non-resident Bangladeshis (NRBs) styled “Probashi Polli” as special guest. Foreign affairs adviser Iftekhar Ahmed Chowdhury attended the ceremony as chief guest.

“As we can see, it (investment) seems to be slowly improving from a low point in the middle of last year when we had a slowdown because of the anti-corruption drive,” Choudhury told the reporters on Bangladesh’s investment situation.

“Now it seems to me (business) confidence is returning, [but] not fast enough.”

“Many more (investment proposals) are coming in fast,” he said.

Asked whether this was the right time for investment, the British envoy replied, “Yes, absolutely.”

Inspired Development Limited, a company set up on August 21 last year, is implementing the Probashi Polli on 2,250 bighas of land near Purbachal housing project on the eastern fringe of the capital.

The NRBs from Britain, the USA and Italy have been investing in the housing project dedicated to the expatriates. The company is collecting money from the NRBs for investment in the project.

“You cannot do it by collecting money from individuals. It (the housing project) needs millions.
“You have to think whether you have enough money to invest in such a project,” Choudhury told the NRBs in his address.

Managing director of the Inspired Development Limited Mesbahuddin Ahmed told bdnews24.com that the amount of investment would depend on the flow of money coming from the NRBs.

The project would be finished in the next three years, Ahmed said.