Bangladesh ranks 5th in terms of attracting FDI
Friday, 20 July 2007
FE Report
Bangladesh is ranked fifth in terms of attracting foreign direct investment (FDI) among 50 least developed countries (LDCs) accounting for 5.9 per cent of the annual FDI flow to the LDCs, a United Nations report said.
The report said 56 per cent of total FDI inflow to LDCs goes to the top four LDC countries.
In its Least Developed Countries (LDCs) Report 2007 released Thursday in Dhaka simultaneously in other capitals around the United Nations Conference on Trade and Development (UNCTAD) said that Bangladesh's position in terms of per capita FDI inflow was very nominal. The country was ranked 34th among the LDCs in 2005 in terms of FDI flow.
The Centre for Policy Dialogue (CPD) disclosed the findings of the UNCTAD report.
The Executive Director of the CPD, Debapriya Bhattacharya, analysing the UNCTAD report said although the FDI inflow into the LDCs has increased markedly since the early 1990s, there is little evidence of a significant contribution to technological progress in LDCs.
Quoting from the report, Debapriya said that Bangladesh's garment sector had attracted more FDI than any other sector, which boosted the export earnings.
"But evidence suggested that the rapid growth in garment-related FDI flows, employment and exports had not been accompanied by a corresponding development of the technological capabilities of firms in Bangladesh," he said.
About the technological development in the country, he observed that development in Bangladesh mainly took place at the tertiary level of technology that includes telecommunication and service sectors. "This (technology) comes mainly in packaged form. Our people don't have to do anything except some minor maintenance," he said.
Commenting on the FDI to export processing zones (EPZs) of the country, Debapriya said this has little impact on the overall economy as it does not have any strong bearing on the national economy. Those investments have only generated some employment opportunities.
The UNCTAD report said that licencing activity on new technology in LDCs is much lower than that of other developing countries around the globe and the LDCs' share of global patents is insignificant.
The intellectual property rights (IPRs) are unlikely to play a significant role in promoting local learning and innovation at the initial stage of development of the LDCs, Debapriya said quoting from the report.
"LDCs should focus on strengthening their absorptive and learning capacities, enhancing the efficiency of their domestic knowledge system and improving their knowledge about ecology," he said.
On Bangladesh's position in IPRs, the CPD executive director quoting from a case study by the UNCTAD said that Bangladesh's knowledge infrastructure is very weak.
"Technology licencing and sourcing from foreign subsidiaries are rarely considered as sources of innovation. The only sources of innovation at the firm level are attributable to firm's own indigenous innovation effort and imitations and copying from others (sources)," he said
Debapriya, however, ex-pressed the view that Bangla-desh would be able to graduate itself to a developing country if it could properly utilise the modern science and information technology.
Welcoming the government's decision on allocation of more money under the budget for the current fiscal for science, technology, research and agriculture sectors the CPD executive said: "Now the proper utilisation of money for the right purposes has to be ensured."
About the migration of the Bangladeshis to other countries, he observed that the semi-skilled manpower would need to be developed to earn more foreign exchange.
Debapriya said foreign aid for technological development and research in the LDCs is very insignificant.
Citing the example of Bangladesh Rice Research Institute (BRRI) which developed 31 modern varieties of rice and accounted for 65 per cent of the total rice production, he noted that Bangladesh would have to attract more aid for research work and technological development.
Bangladesh is ranked fifth in terms of attracting foreign direct investment (FDI) among 50 least developed countries (LDCs) accounting for 5.9 per cent of the annual FDI flow to the LDCs, a United Nations report said.
The report said 56 per cent of total FDI inflow to LDCs goes to the top four LDC countries.
In its Least Developed Countries (LDCs) Report 2007 released Thursday in Dhaka simultaneously in other capitals around the United Nations Conference on Trade and Development (UNCTAD) said that Bangladesh's position in terms of per capita FDI inflow was very nominal. The country was ranked 34th among the LDCs in 2005 in terms of FDI flow.
The Centre for Policy Dialogue (CPD) disclosed the findings of the UNCTAD report.
The Executive Director of the CPD, Debapriya Bhattacharya, analysing the UNCTAD report said although the FDI inflow into the LDCs has increased markedly since the early 1990s, there is little evidence of a significant contribution to technological progress in LDCs.
Quoting from the report, Debapriya said that Bangladesh's garment sector had attracted more FDI than any other sector, which boosted the export earnings.
"But evidence suggested that the rapid growth in garment-related FDI flows, employment and exports had not been accompanied by a corresponding development of the technological capabilities of firms in Bangladesh," he said.
About the technological development in the country, he observed that development in Bangladesh mainly took place at the tertiary level of technology that includes telecommunication and service sectors. "This (technology) comes mainly in packaged form. Our people don't have to do anything except some minor maintenance," he said.
Commenting on the FDI to export processing zones (EPZs) of the country, Debapriya said this has little impact on the overall economy as it does not have any strong bearing on the national economy. Those investments have only generated some employment opportunities.
The UNCTAD report said that licencing activity on new technology in LDCs is much lower than that of other developing countries around the globe and the LDCs' share of global patents is insignificant.
The intellectual property rights (IPRs) are unlikely to play a significant role in promoting local learning and innovation at the initial stage of development of the LDCs, Debapriya said quoting from the report.
"LDCs should focus on strengthening their absorptive and learning capacities, enhancing the efficiency of their domestic knowledge system and improving their knowledge about ecology," he said.
On Bangladesh's position in IPRs, the CPD executive director quoting from a case study by the UNCTAD said that Bangladesh's knowledge infrastructure is very weak.
"Technology licencing and sourcing from foreign subsidiaries are rarely considered as sources of innovation. The only sources of innovation at the firm level are attributable to firm's own indigenous innovation effort and imitations and copying from others (sources)," he said
Debapriya, however, ex-pressed the view that Bangla-desh would be able to graduate itself to a developing country if it could properly utilise the modern science and information technology.
Welcoming the government's decision on allocation of more money under the budget for the current fiscal for science, technology, research and agriculture sectors the CPD executive said: "Now the proper utilisation of money for the right purposes has to be ensured."
About the migration of the Bangladeshis to other countries, he observed that the semi-skilled manpower would need to be developed to earn more foreign exchange.
Debapriya said foreign aid for technological development and research in the LDCs is very insignificant.
Citing the example of Bangladesh Rice Research Institute (BRRI) which developed 31 modern varieties of rice and accounted for 65 per cent of the total rice production, he noted that Bangladesh would have to attract more aid for research work and technological development.