BD FDI grew by 24pc in 2013

FE Report | Published: June 25, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

Bangladesh posted an overall growth of 24 per cent in the foreign direct investment (FDI) last year compared to that in the previous year, said an UNCTAD report released in the city Tuesday.
Bangladesh received $ 1.599 billion in FDI in 2013, next to India that saw an FDI flow of $ 28.199 billion, said the World Investment Report-2014 compiled by UNCTAD (United Nations Conferences on Trade and Development).
According to the report, the global FDI flow grew by 9.0 per cent to $ 1.45 trillion in 2013.
It said the FDI flow increased to all major economies, developed, developing or transitional economies. But figuratively the developing nations received the most and Asia topped the list.
The report was released at a function at the Board of Investment (BoI) office in the city. BoI Executive Chairman Dr S A Samad presided over the ceremony.
Adviser to Prime Minister on Energy Dr Taufique-E-Elahi was the chief guest on the occasion. Prof Mohammad Ismail of Jahangirnagar University made a presentation on the report.
The report has most distinctively replaced the Millennium Development Goals (MDGs) with Sustainable Development Goals (SDGs) as the next target of global efforts to attain higher and lasting growth.
So it has refocused on major FDI thrust under a new action plan for the SDGs to include poverty reduction, social inclusion and climate change as the top priority in the global resource mobilisation process. The report projected that the global FDI flow for 2014 might rise to $ 1.6 trillion to be followed by $ 1.75 trillion and $ 1.85 trillion for the next two years. The FDI flow to developing countries reached a new height at $778 billion in 2013 accounting for 54 per cent of the total.
Developing Asia continues to be at the top with 7 per cent growth over the last year and accounting for 30 per cent of the total global flows. Africa and Latin America saw the growth at 4 per cent and 6 per cent respectively.
China again ranked second in the world receiving the highest inflow narrowing the gap with the USA. But its outflow grew faster by 15 per cent to a total of $ 101 billion. The FDI inflow to Korea reached $12 billion while Hong Kong received $77 billion and Taiwan only $4 billion.
The inflow to ASEAN group was $ 125 billion in 2013 while it had sot up to $118 billion in 2012 from $ 47 billion in 2009.
Prof Mohammad Ismail said the FDI flow to Bangladesh achieved momentum last year and three major sectors including telecommunications, power and energy and textile and apparel manufacturing received the most. Banks, mainly foreign, also recorded a significant inflow of FDI enhancing their working capital to meet the global standard.
He said the FDI inflow could have been much higher, if some other factors had worked well. But one analysis showed that the net FDI inflow to Bangladesh stood at 9 per cent while the remaining were reinvestment of profits and equities of companies and banks already operating in the country.
Dr SA Samad said the biggest obstacle to investment was the high interest rates on bank loans. Moreover, high tax rates and procedural flaws, infrastructure shortfall and such other problems in the transportation sector were working as the major impediments to attracting a higher amount of foreign investment. He said the government was working to remove these hurdles.
He said new sectors like ship building, automobiles and steel and engineering were emerging as the areas of foreign investments. What was important was creation of an environment. The political factor was not always crucial and the FDI flows in 2013 proved it, he said.
Discussants said land availability for foreign investors was the key issue. The government must put serious efforts to find land for new industrial units. Investors from Japan, Korea, China, Hong Kong and Malaysia set their sight on Bangladesh for its low labour cost. The country must seize the new opportunity. There should not be any repeat of the Korean EPZ problems, they said.
Moreover, the problem of gas and electricity must be mitigated to attract large-scale FDI into the country. People who wanted to invest in the country were watching the development as to how the government was going to solve these problems, one participant in the discussion said.