UN: FDI inflow into Bangladesh rises 4.38% in 2016
Release Date: June 19, 2017
Among the South Asian countries, India topped the chart and bagged $44 billion FDI, which is 82% of total FDI in South Asia
Despite global declining trend, Foreign Direct Investment (FDI) inflows into Bangladesh rose by 4.38% to $2.33 billion in 2016 riding on telecommunication sector.
In 2016, global FDI flows decreased by 2% to $1.75 trillion owing to weak economic growth and significant policy risks perceived by multinational enterprises.
According to World Investment Report 2016 of the United Nations Conference on Trade and Development (UNCTAD), FDI inflows to Bangladesh rose by 4.38% to $2.33 billion in 2016, which was $2.23 billion in 2015.
The global FDI, however, is expected to increase by 5% to almost $1.8 trillion in the current calendar year while the inflows into developing Asia shrank by 15% to $443 billion in the same period.
China, for the first time, was the world’s second-largest investor as FDI outflows surged by 44% to $183 billion in 2016, which is a new high.
Among the South Asian countries, India topped the chart and bagged $44 billion FDI, which is 82% of total FDI in South Asia.
In terms of total world FDI flows, Bangladesh accounts for only 0.1% while it is 4% of the total South Asia’s FDI.
Among the FDI receive sectors in Bangladesh, telecommunication holds the top position, followed by Power, Gas and Textile.
There was a large injection of capital by Singapore Telecom (Singtel) to enhance the capital base of Bharati Airtel in the country.
The UNCTAD reports also said three greenfield FDI projects in Bangladesh have positioned themselves in the list of Least Developed Countries’ (LDCs) 10 largest greenfield projects announced in 2016.
“Bangladesh experienced a very modest FDI inflow in 2016, which is mostly from reinvestment. It shows that the investors feel more comfortable and confident,” said Ahsan H Mansur, executive director of Policy Research Institute (PRI), in his presentation on the report.
Bangladesh Bank, Bangladesh Investment Development Authority (BIDA) and the Commerce Ministry should think how to attract investment. Bangladesh will have to ensure that it has capacity and there will have not disruption to proving services, according to the report.
China is becoming the top exporter of capital while Bangladesh should set off an effective economic diplomacy with China, said Mansur.
There are challenges and Bangladesh should focus on liberlisation and promotion of business since it is the order of the day, he added.
“FDI report brings good news for Bangladesh as it shows continuous growth and we have performed better in South Asia,” said Bangladesh Investment Development Authority (BIDA) Executive Chairman Kazi M Aminul Islam.
It is a good sign that investment is not going back as investors are experiencing good environment here, he added.
The sector that witnessed bigger investment is paving the way for economic development to take the country forward, according to Aminul.
“FDI has significantly increased in India due to massive reform initiatives and we are also going through such an era. I hope Bangladesh will see huge investment this year.”
SDG Chief Coordinator Abul Kalam Azad said the investment would rise as the government is establishing 100 Special Economic Zones and going to enact One Stop Service Act.
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