BD’s overseas investment on steady rise

Asjadul Kibria | Published: May 20, 2015 00:00:00 | Updated: May 20, 2015 16:25:54

Bangladeshi investment in the outer world has been on a steady rise-through both overt and covert channels.
Experts say the actual volume of country's investment overseas cannot be gauged as capital flowing out through unrecognised passages is thought to be greater in volume than what is officially counted.Â Â Â Â Â Â Â Â Â Â Â Â Â
Central bank statistics reveal that investment from Bangladesh outside the country was $48.37 million last year. The amount was 43 per cent higher than the amount, $33.73 million, invested in 2013 in other countries.
The latest statistics also show that last year, Bangladeshi businesses made investment in two sectors: banking and mining. Some $34.68 million was invested in banking while the rest $13.69 million in mining sector.
The Bangladesh Bank data, however, don't provide any detail of sector-wise investment destinations. It only shows Bangladeshi investment having gone to 12 countries in 2014. The highest amount worth $16.85 million went to India, followed by $11.17 million to Nepal.
But in India, almost full amount is in the form of reinvested earnings from existing investment. In Nepal, $8 million is in the form of fresh equity.
When contacted, Dr Biru Paksha Paul, chief economist at the Bangladesh Bank, said: "The rates of return on investment in India and Nepal are high and so some Bangladeshi entities are now investing there. But the amount is still very low."
Dr Paul was of the view that as part of relaxing the rules on capital account, such investment needs to be encouraged.Â Â Â Â Â Â Â Â
Currently, any Bangladeshi interested to invest in another country requires prior approval of the central bank on case-to-case basis.
The central bank data also show that tiny amounts of Bangladeshi investment went to countries like Australia, Hong Kong, Malaysia, Myanmar, Singapore, the Maldives, the United Arab Emirates, Pakistan, Oman and the United Kingdom. Â
Dr Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue (CPD), says having good amount of foreign-exchange reserve, Bangladesh can now think about encouraging some investment outside.
"It is learnt that a good amount of Bangladeshi investment has been made in the countries like Cambodia, Jordan and Mauritius," he added.
"All these investments go informally or bypassing the country's regulation. Thus, the official statistics of outward FDI show lower than actual amount."
The economist also pointed out that some garment exporters are trying to create their brand value and so they are trying to make investment in retail chains in the developed countries. "This kind of initiative needs policy support," he said.
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