Country risk in Bangladesh is moderate to high. The OECD country credit grade is 5, indicating that there may be a moderate to high chance that the country will be unable or unwilling to meet its external debt obligations.
Bangladesh is ranked 168th out of 190 countries in the World Bank’s latest ease of doing business survey, well below the regional average. Bangladesh falls behind on all categories except protecting minority investors. Bangladesh is particularly poor in registering property and enforcing contracts.
The risk of expropriation in Bangladesh is high. Although the Foreign Investment Act of 1980 safeguards against government expropriation in Bangladesh without adequate compensation, a weak judicial system and widespread corruption make it difficult for foreign investors to seek impartial arbitration.
Political risk is moderate to high in Bangladesh. The struggle for power between the Bangladesh Nationalist Party and Awami League has often resulted in political conflict. This political rivalry often results in local violence. Violence within political parties has also been a significant root of discord. The political environment has shown some signs of stability in recent years, though potential for religious-based violence remains an ongoing risk. Bangladesh is below the regional average on almost all Worldwide Governance Indicators, most notably political stability and absence of violence.