FDI to Bangladesh crosses $2bn mark

Bangladesh has witnessed the highest foreign direct investment (FDI) in last year exceeding $ 2 billion mark, reports the BSS.

 

The World Investment Report 2016, released today by the United Nations Conference on Trade and Development (UNCTAD) showed that Bangladesh registered 44 percent growth in receiving record breaking FDI of $ 2.235 billion in 2015.

 

The FDI receipt was 44.10 percent or $ 684 million higher compared to that in 2014.

 

"Bangladesh has witnessed the highest growth among the South Asian countries due to stable and favorable investment atmosphere prevailed in the country last year," said Board of Investment (BOI) Executive Chairman Dr S A Samad at the report launching ceremony at BOI on Wednesday.

 

In terms of gross FDI inflows, the amount stands at $ 2699.05 million which was 31.08 percent higher than in previous year to $ 2058.98 million.

 

In South Asia, Bangladesh is ahead of all countries except India which was the 10th largest FDI recipient country in the world in 2015, receiving $ 44 billion.

 

"Although, Bangladesh was trailing India in terms of total volume, but leading the region in attaining highest growth rate for FDI receipt," said Power, Energy and Mineral Resources Affairs Adviser to the Prime Minister Dr Tawfiq-E-Elahi Chowdhury who was present at the unveiling ceremony as the chief guest.

 

He said India has a big domestic market with higher per capita income that pushed them in a better position. "But, we've a visionary and dynamic leader like Prime Minister Sheikh Hasina and energetic young generation who must propel the country ahead."

 

Inflows to Pakistan and Sri Lanka declined to $ 865 million and $ 681 million respectively while In Nepal, FDI inflows rose by 74 percent to $51 million last year.

 

According to the report, country's power, gas and petroleum sector received highest FDI of $ 574 million followed by textile and wearing $ 443 million, telecommunication $ 255 million and banking $ 310 million. In 2014,the FDI receipt of power, gas and petroleum sector was only $ 50 million.

 

Besides, reinvested earnings in the country continued to rise, exceeding the value of the equity component.

 

Bangladesh, in fact, became the largest FDI host in the subgroup of exporters reinvesting their earnings, as flows into Cambodia fell slightly.

 

The trend of reinvested earnings increased in 2015 by 15.74 percent which signified the confidence of the investors to come in Bangladesh.

 

"Return of investment in the country is very high and it is 14 percent that's why those who are investing here could not want to leave," opined the BOI Executive Chairman.

 

Recovery in FDI was strong in 2015. Global FDI flows jumped by 38 percent to $ 1.76 trillion, highest since the global economic and finance crisis of 2008-09.

 

The report said a surge in cross-border mergers and acquisitions (M&As) to $ 721 billion, from $ 432 billion in 2014, was the principal factor behind the global rebound.

 

However, there was no M&As in Bangladesh, but this is supposed to happen in the country in future, said S A Samad, adding: "If the M&As take place in the country, FDI receipt would jump to 5-7 billion."

 

Besides, the FDI outflows from Bangladesh rose slightly to $46 million last year from $44 million the year ago.

 

This year, the UNCTAD's report looks into global financial flows against the background of stalling global growth, falling commodity prices and geopolitical tensions.

 

The report, titled "Investor Nationality: Policy Challenges", said globally, the recovery in FDI was strong in 2015, with foreign direct investment flows jumping.

 

Dr M Ismail Hossain, Professor of Economics at Jahangirnagar University,made a power point presentation on the World Investment Report-2016.

 

The report said global FDI flows are expected to decline by 10-15 percent in 2016. Over the medium term, flows are projected to resume growth in 2017 and to surpass $1.8 trillion in 2018.

 

Hindered by the current global and regional economic slowdown, FDI inflows to Asia are expected to decline in 2016 by about 15 percent, reverting to their 2014 level, it added.

 

"Global economy is yet to get back strong shape overcoming the financial and economic downturn in 2008-09, but it would be robust in 2017 and 2018 for some strong initiatives," observed Ismail Hossain.

 

The United States topped the list of the countries receiving the highest amount of FDI, followed by Hong Kong, China, Ireland, the Netherlands,Switzerland, Singapore, Brazil, Canada and India.