Bangladesh announced in October that it had given approval to the International Finance Corporation (IFC) for the first ever offshore Taka bond. The program will list $1 billion in bonds that are linked to the taka, country’s currency, on the London Stock Exchange. Proceeds are expected to give foreign investment in Bangladesh an added boost, and strengthen the IFC’s pipeline of private sector projects in Bangladesh, which already surpass US$ 800 million in sectors such as sustainable energy, power generation and banking.
Although Bangladesh has historically been reliant upon developmental finance institutions (DFIs) for aid, another group is beginning to play an important role. The Bangladeshi diaspora, which numbers roughly 10 million globally, has quickly become a major funding source. The country’s central bank estimates that non-residents remit US$ 14 billion annually — around 6% of GDP. Many seem to be taking a cue from the diaspora – foreign investment in Bangladesh’s capital markets doubled in 2014 from the previous year, driven primarily by US-based investors who accounted for 60 percent of the surge.
In October the Boston Consulting Group (BCG) released a report that predicts Bangladesh will become one of the world’s next great growth markets for discretionary consumption. Although the middle and affluent class (MAC) only currently comprises 7% of the country’s population of 160 million, this segment is expected to account for 17% by 2025.