Dr. Nuruzzaman Khan
Adelaide University
The proposal to merge Bangladesh’s four principal investment agencies, the Bangladesh Investment Development Authority, the Bangladesh Economic Zones Authority, the Bangladesh Hi-Tech Park Authority, and the Public-Private Partnership Authority, into a single body called the Unified Investment Development Authority (UIDA) is being pitched as a structural reform that will simplify investor services, reduce bureaucratic fragmentation, and present the country as a coordinated destination for capital. On closer examination, the merger’s benefits are real but narrow, while its economic costs, competitive risks, institutional biases, and implications for investment are more far-reaching than its advocates acknowledge.
This article is intended to have a preliminary discussion on these, to motivate an extended discussion.
The Benefits: Administrative Coherence, Not Structural Transformation
The strongest case for the merger is the lived experience of investors who must currently navigate multiple agencies depending on the nature and location of their projects. A single point of contact for approvals, land allocation, and utility coordination reduces transaction costs and shortens the decision-making chain. Setting binding timelines for key services such as customs clearance, environmental approvals, utility connections within a unified framework introduces accountability that a fragmented system makes easy to evade. The administrative savings from eliminating duplicated corporate functions across four agencies are also genuine, if modest.
Yet these benefits address a procedural problem, not a structural one. Investment in Bangladesh is constrained not primarily by the difficulty of finding the right agency but by the difficulty of getting anything done once the right agency is found. Over fifty organisations deliver investment-related regulatory services, and the proposed merger covers only four. The remaining maze of licences, registrations, and approvals stays intact. A single doorway into a labyrinth is not the same as an open road.
Economic Costs: Integration Expense and Institutional Erosion
Merging four statutory bodies with distinct legal mandates, employment structures, and operational cultures is not costless. The transition period (during which staff are redeployed, systems are consolidated, and reporting lines are restructured) will produce the very delays and uncertainties the merger is intended to eliminate. Investors who currently know how BIDA processes a work permit or how BEZA allocates land in an economic zone will face a period of institutional ambiguity where neither the old rules nor the new ones are reliably in force.
The more serious cost is institutional erosion. Each of the four agencies has developed domain-specific expertise: BEZA in zone management, BHTPA in technology park infrastructure, PPPA in structuring complex risk-sharing agreements with private capital. Folding these functions into a generalist authority risk diluting the specialised knowledge that makes them effective. A PPP officer who reports to a board dominated by investment promotion priorities is a different professional from one who operates within an institution whose sole mandate is public-private partnership development. The merger assumes that coordination and specialisation are substitutable. They are not.
Loss of Competitiveness: The PPP Pipeline at Risk
The most direct competitive threat lies in the absorption of the PPP Authority. Bangladesh’s low tax-to-GDP ratio and declining access to concessional foreign financing have made PPPs increasingly critical for infrastructure development. The PPP Authority’s institutional independence allowed it to develop a project pipeline worth more than $41 billion … a figure that reflects not just planning but the accrued trust of private-sector partners who deal with an agency whose mandate is unambiguous and whose governance is structured around their specific concerns.
Folding this into a broader authority governed by a board chaired by the prime minister or a ministerial nominee fundamentally changes the relationship between the state and private infrastructure investors.
Private capital enters PPP arrangements on the strength of contractual certainty and institutional independence. An authority that can be directed by government (the draft law’s governance structure ensures this) is one whose commitments to private partners are always implicitly renegotiable. The loss of competitiveness here is not abstract: it is the difference between a partner willing to invest billions and one who waits for clearer institutional ground.
Bias: Promotion Over Regulation
The merged authority’s mandate, i.e investment promotion, project approval, policy formulation, and infrastructure coordination, concentrates both advocacy and regulation in a single institution. This is a structural bias toward promotion. An agency whose primary metric of success is the volume of investment it attracts has an inherent incentive to lower scrutiny, expedite approvals, and minimise the friction that safeguards (e.g environmental review, labour standards, due diligence) are designed to provide.
The four original agencies, for all their fragmentation, created an implicit system of checks: BIDA promoted investment, BEZA managed land and zones, PPPA structured risk-sharing with private capital. Each served as a partial counterweight to the others. A single authority responsible for both selling and governing investment removes that counterweight.
Impact on Investment: Short-Term Certainty, Long-Term Doubt
In the immediate term, the merger may generate positive signalling: a government willing to consolidate its investment architecture appears serious about reform. Foreign investors evaluating Bangladesh against regional peers may note the effort. But signalling fades. Lasting investment decisions are made based on institutional reliability, regulatory predictability, and enforcement independence … precisely the qualities that absorption into a politically governed mega-authority compromise.
The merger addresses the symptom of institutional fragmentation while leaving the deeper pathology, i.e a regulatory environment of over fifty bodies with overlapping mandates that are essentially untouched. Investment does not follow doorways. It follows outcomes. And outcomes depend on whether the authority that approves a project can also be trusted to hold it accountable. The current proposal gives no confidence that it can.
