Delays in the settlement of letters of credit (L/Cs) are amongst hidden costs for investors in Bangladesh, where the overall cost of investment is falling according to a new survey conducted by the agency that promotes trade and investment between Japan and the rest of the world.

Japan External Trade Organisation's (JETRO's) 17th Survey of Investment-related Cost Comparison says Bangladesh nevertheless emerged as the cheapest place in Asia in terms of nine out of the 32 cost components assessed in the report.

Strengths

Bangladesh turned out to be cheapest in the region for costs, including middle management salaries, legal minimum wage and rate of increase in nominal wages.

Telephone installation fees and call charges, mobile phone subscription fees, monthly basic mobile phone charges as well as the cost of gas and diesel also appeared competitive in Jetro's survey of 30 Asian cities.

Weaknesses

However, according to existing Japanese investors canvassed by JETRO, hidden costs in the legal, political and commercial environments as well as infrastructure deficiencies push up the cost of investment.

As well as delays in L/C settlement, JETRO says other areas of weakness in Bangladesh's investment environment include a lack of law and order, sudden changes in government policies, political instability and inadequate power, gas and watersupplies. Japanese investors also complained about poorservice levels at the port of Chittagong, according to JETRO.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.