Foreign direct investment (FDI) in Bangladesh fell in 2014, in five years, by 4.5 per cent to US$1.5 billion by a UN agency count despite a relative political calm.
The United Nations Conference on Trade and Development (UNCTAD) in its latest report described it as a sign of slowing growth in the country's equity investment.
Government spokespersons wouldn't agree with such findings and put up an alternative estimate that claims a rather rise in gross FDI inflows.
As per the UN trade-agency report, the equity investment dropped by $261 million to $280.31 million in the year under review compared to that of 2013.
However, the 25th publication of the UNCTAD dovetails with higher reinvestment by the existing players.
But, the report did not elaborate reasons behind the rise in the reinvestment.
It is, according to many, due to complexity in remitting money abroad while many feel comfort to reinvest in their existing plants.
Reinvestment grew to $988.79 million in 2014 against $697.11 million in 2013, says the report.
Intra-company credits grew to some extent, to $257 million, in 2014.
The year 2014 was politically peaceful-none did blame political instability in the country for economic disruptions.
The statistics were released Wednesday by the country's investment-promotion agency-the Board of Investment (BoI)--at its headquarters in the city.
BoI executive chairman Dr SA Samad moderated the launching programme the UNCTAD-sponsored World Investment Report (WIR) 2015.
The report says FDI inflows remained relatively high thanks to green-field investment in a large number of industries.
Green-field investments were mainly in automobile, gas exploration, chemicals and construction materials.
Dr Ismail Hossain, professor of Economics of North South University, made a presentation on the WIR findings.
Dr Tawfiq-E-Elahi Chowdhury, adviser to the Prime Minister, joined the programme as chief guest while Dr Mohiuddin Khan Alamgir, chairman of the parliamentary standing committee on public accounts, joined the function as special guest.
However, FDI inflow in South Asia has surged significantly, driven by huge investment in neighbouring India.
The report says FDI inflow to Pakistan increased 31 per cent to $1.7 billion in 2014. FDI inflow to Sri Lanka also rose as Chinese investment increased in the island country.
On the other hand, BoI said they measured another estimation of FDI in 2014 which they call 'gross inflow'.
According to the board estimation, Bangladesh's gross FDI investment stood at $2.58 billion.
It calculated all inflows of foreign funds without deducting outflow of capital.
There are many pieces of equipment that were again taken out of operation or use after certain time. But BoI took those also into consideration while estimating investment.
But UNCTAD measures foreign direct investment through a unified definition and the FDI has its other components.
Speaking at the programme, Dr Tawfiq-E-Elahi Chowdhury said these statistics have many weaknesses.
He claimed that Bangladesh remained 'under-enumerated' in the publication.
The PM adviser pointed out that investment through debt was not considered as FDI in the counting.
Echoing his opinion, the BoI executive chairman said, "The FDI figures of Bangladesh were actually undercounted."
He, however, told the meet that Bangladesh had expected a higher growth in the FDI.
But "this is not big fall, not alarming".
He said Bangladesh will communicate with the UNCTAD for its pursuance of gross counting of FDI.
Bangladesh itself for the first time prepared the gross counting of FDI. A Bangladesh Bank committee headed by its deputy governor Naznin Sultana did it.
Speaking at the function, the BB deputy governor, Ms Sultana, said they had counted the FDI figures in terms of gross inflows of the funds.
She said UNCTAD estimation is also based on the central bank data.
"They have just compiled it [as per their definitions]"
On a smaller scale, green-field investment in Bangladesh is on the rise. In 2013, Mahindra and Mahindra (India) announced a more than $200 million investment in a plant producing light trucks and utility vehicles in Bangladesh.
According to the report the global FDI inflow also fell 16 per cent to $1.2 trillion in 2014.
However, Professor Hossain holds the hope that FDI might rise in the years ahead.
He said: "The UNCTAD report forecast that the global FDI will rise in the years to come, with some uncertainties."
jasimharoon@yahoo.com
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