In general, FDI in Bangladesh has shown a decreasing trend in recent years. The global recession is one of the main reasons for the slowdown in FDI in Bangladesh. The energy crisis and the outdated infrastructure are among the other major factors for poor FDI inflow. Then there is the problem of administrative weaknesses. Bangladesh also suffers from a seriously "negative" image as a country. The appropriate culture for        attracting FDI has not been developed properly over the years.

However, the government is always keen to provide an enabling environment for FDI. A notable measure to be announced in the Industrial Policy 2009 is that investment by non-resident Bangladeshi (NRB) will be treated like FDI and will get all the benefits of foreign investment. The government has also taken measures to attract FDI through the Public    Private Partnership (PPP) mainly for    infrastructure projects such as toll road, power station and elevated     expressway.

Bangladesh has no proper marketing plan for promoting FDI in Bangladesh.  The Government through its various organizations should promote Bangladesh to foreign investors.  Another drawback is the outdated infrastructure facilities including road communication between Dhaka and Chittagong, which is critical in attracting potential investment into the country. Bangladesh needs to increase its competitiveness in the global economy. The energy supply crunch is also the country's main constraint. In terms of strengths, Bangladesh has a favorable FDI policy; its labour force is one of the cheapest and it has flexible labour laws. Moreover, it has a large domestic market.

There is huge potential for FDI in the Energy sector both in exploration of gas and coal, Power generation, Elevated expressways, Toll-roads/highways, textiles, hospitality sector, Tourism, Medical Services, Light Engineering etc. The government needs to highlight Bangladesh's positive image - such as consistent 5% growth since 1991.  It needs to promote Bangladesh by holding "Investment Seminars" both in Bangladesh and abroad.  It also needs to market Bangladesh in the international arena through advertisement both in print and electronic media.  Bangladesh can declare 2011 as "Investment Year for Bangladesh". Bangladesh also needs to do campaigning through its missions abroad. It can develop standardized investment advertisements, brochures and documentaries like "Invest in the Emerging Tiger" or "Bangladesh-the next Investment Destination".

BOI should focus on giving "one-stop" service to potential investors with prompt and speedy services. The investors should not be frustrated by lengthy approval processes of the government.  The private sector is also contributing to trade and foreign investment efforts. A business delegation led by the Bangladesh-Thai Chamber of Commerce and Industry held a 'Bangladesh Road Show 09, Thailand' in Bangkok recently with the objective of reducing the trade gap between the two countries and increasing the potential of trade, commerce, investment and other economic activities. A 'Showcase Bangladesh 2010' organized by Bangladesh Malaysia Chamber of Commerce and Industry is being held in Kuala Lumpur to promote Bangladesh as well as highlighting opportunities for Malaysian investment in Bangladesh.

The major activities of the DCCI are connected with promotion and development of trade, commerce and industry in this country. It organizes trade delegations, seminars and trade fair participation as well as receiving business delegations from abroad. DCCI in 2008 held the International Business Conference (IBC) in Dhaka to promote trade and Investment. Many foreign delegates participated in IBC. Among other mentionable activities of DCCI during the last year for promoting trade, business and foreign investment were:  participation in NRB conferences in Dubai and in UK, setting up Help Desk at DCCI to encourage NRB investment, holding a seminar on Trade and Investments, participation of DCCI business delegation in various trade shows and conferences including Kunming, China Import and Export Commodities Fair, participation in 4th China-South Asian Business Forum, Kunming, etc.

Every investment that is not coming to Bangladesh is an opportunity loss for Bangladesh.  We should put focus on how we can attract more investment rather than what we have lost. 

I believe all investors should be treated equally. No investment, be it local or foreign, should be given any special deals.  All investments have a cost benefit to the nation, therefore all investments need to be properly evaluated.  We should not allow any project which is not beneficial to the country.  All investments should benefit the economy, the country and the people of Bangladesh. 

I think all large investments should be treated on a case-to-case basis, under a proper evaluation system taking into account all relevant matters including need/impact assessment of the investment. May be there can be a high-powered investment task force comprising industry and financial experts to evaluate all proposals without any prejudice.

As far as I know, the Warid Telecom buy-out is a major investment in 2010 - which will bring a lot of confidence in Bangladesh.

The government is planning several road shows abroad to attract FDI in  the energy sector. However, I think the government needs to seriously re-assess its strategy in attracting FDI in infrastructure projects.  It needs to market to "Potential and Prospective" investors.

FDI can fast track economic development and prosperity.  FDI is one of the key factors for the country's economic development. Therefore, we need to increase our FDI inflow for which we would need to address the key issue of Bangladesh's attractiveness and competitiveness.  We need to actively market Bangladesh globally. Goldman Sachs, a leading investment bank, has included Bangladesh in Next 11 countries (N11) after BRIC (Brazil, Russia, India, China) as one of the emerging economies of the world. Similarly, Price Waterhouse Coopers (PWC) has added Bangladesh to the Pwc30 list as one of the long-term potential growth economies by 2050.  So, we can see the positives of Bangladesh as noted by leading financial companies; we need to capitalize on these reports to attract more investments into Bangladesh.  I also strongly believe that the potential of Bangladesh is enormous - with the right and timely policies, Bangladesh will achieve accelerated growth and increase FDI.

FID Facts & Figures

FDI Inflow Survey Findings

l Total FDI inflows during July-December, 2008   increased by $118.99 million or 24.60% to $602.65 million compared to the previous half year. This was also    higher by $317.62 million or 111.43% compared to July December, 2007.

l Total  FDI  inflows       increased by $419.95 million or 63.02% to $1086.31 million during the year 2008 compared to the decrease of  $126.12 million or 15.91% during 2007 and a decline of $52.78 million or 6.24% during 2006.

Review by Components

l Equity capital increased by $51.43 million or 13.57% to $430.34 million during July-December,2008 compared to the increase of $212.13 million or 127.19% during the previous half year and decrease of $68.05 million or 28.98% during July-December,2007.

l Reinvested earnings increased by $53.71 million or 55.94% to $149.72 million during July-December,2008 compared to the decrease of $5.69 million or 5.59% during the previous half year and a decrease of $9.84 million or 8.82% during July-December,2007.

l Intra-company loans increased by $13.85 million or 158.47% to $22.59 million during July-December, 2008 compared to the decrease of $7.81 million or 47.19% during the previous period January-June,2008 and a decrease of $18.41 million or 52.66% during July-December,2007.

FDI Inflows by Area

l Total FDI inflows into Non-EPZ areas increased by $98.70 million or 22.71% to $533.23 million during the period under review compared to the increase of $188.51 million or 76.62% during January-June, 2008 and a decrease of  $68.89 million or 21.88% during July-December, 2007.

FDI Inflows by Major Sectors

l Inflows of FDI into Telecommunication Sector increased by $220.03 million or 104.44% to $430.71 million during July-December, 2008 compared to the increase of $121.44 million or 136.08 % during January-June, 2008. It decreased by $23.42 million or 20.79% during July-December, 2007.

l FDI inflows into Textile and Wearing Sector increased by $15.54 million or 28.04% to $70.95 million during July-December, 2008 compared to the increase of $17.4 million or 45.78 % during January-June, 2008. It decreased by $26.33 million or 40.92% during July-December, 2007.

l  FDI inflows into Banking Sector decreased by $97.40 million or 81.45% to $22.18 million during July-December, 2008 compared to the increase of $82.35 million or 221.19 % during January-June, 2008. It decreased by $5.51 million or 12.89% during July-December, 2007.

l FDI inflows into Food Sector increased by $13.05 million or 265.24% to $17.97 million during July-December, 2008 compared to the decrease of $1.43 million or 22.52 % during January-June, 2008. It increased by $2.86 million or 81.95% during July-December, 2007.

l  FDI inflows into Agriculture Sector increased by $13.81 million or 4454.84% to $14.12 million (Particularly in Tea production) during period under review compared to the decrease of $3.03 million or 90.72% during January-June, 2008. It also decreased by $0.65 million or 16.29 % during July-December, 2007.

FDI Inflows by Major Countries

FDI inflows from major countries for the period July-December,2008 arranged in descending order of magnitude were: Egypt ($256.99 million), Malaysia ($69.95 million) , U.K. ($52.60 million), Japan ($51.12 million), Norway ($33.47 million), UAE ($29.93 million), Hong Kong ($21.16 million), South Korea ($21.14 million), USA ($17.14 million) and Netherlands ($15.13 million) which were 42.64%, 11.61%, 8.73%, 8.48%, 5.55%, 4.97%, 3.51% , 3.51% , 2.84% and 2.51% respectively towards the contribution of total FDI inflow.

Stock Position of Foreign Direct Investment (FDI)

Stock Position of Foreign Direct Investment (FDI) increased by $12.62 million or 0.26% to $4817.05 million as on end December, 2008 compared to the increase of $405.65 million or 9.22% as on end June, 2008. It also increased by $30.33 million or 0.69% as on end December, 2007. Stock (in million US$)

FDI stocks from major sectors for the period July-  December, 2008 arranged in descending order of magnitude were: Gas & Petroleum ($1203.40 million), Telecommunication ($1045.96 million), Textiles & Wearing ($925.03 million), Banking ($728.40 million), Power ($251.45 million ) , Cement ($139.07 million), Food Products ($104.18 million), Fertilizer ($103.71 million), which were 24.98%, 21.71%, 19.20%, 15.12%, 5.22%, 2.89%, 2.16% and 2.15% respectively towards the contribution of total FDI stock.