Bangladesh has cancelled four billion dollars worth of foreign projects in moves analysts warned Sunday could deter overseas companies from investing in the impoverished country in the future.
Analysts said political jitters ahead of national polls in January were partly behind the government's shelving on Wednesday of a 1.4-billion-dollar plan for an open-pit mine by London-based Asia Energy.
The announcement came less than two months after India's Tata Group was forced to suspend a three-billion-dollar plan to invest in steel, power, coal and fertiliser operations.
Ministers told Tata executives that political sensitivities in the run-up to the elections would make it tough for Prime Minister Khaleda Zia to approve the plan. Anti-Indian sentiment is strong in Bangladesh and political parties fear being seen courting the country's powerful neighbour.
"These two decisions say to investors that Bangladesh is a country where investment can be subject to irregularities. It says there is a chance a government may not have the political capital to conclude a deal," said Zafar Sobhan, a columnist with the English-language Daily Star.
After five days of violent street protests, the government bowed Wednesday to demands to scrap the mine in northern Phulbari which demonstrators claimed would damage the environment and displace 100,000 people. A government spokesman vowed it would "never honour" its contract with Asia Energy despite a minister declaring days earlier there was "no way we will cancel the agreement".
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