5:13 pm - Monday April 18, 6811

FDI dipped last year

BOI sees no specific reason, hopes for a turnaround

The actual foreign direct investment flow into Bangladesh went down by 4.53 percent year-on-year in 2014, the United Nations Conference on Trade and Development (Unctad) said yesterday.

This was the first time the FDI flow to the country fell since 2010.

Bangladesh received an FDI of $1.526 billion in 2014 against $1.599 billion in the previous year, said boithe World Investment Report 2015 of the Unctad.

The Board of Investment (BoI) launched the report on the UN agency’s behalf at the BoI office in the city. The study was also published globally.

“The FDI flow dropped very marginally. We see no specific reasons behind the drop. We had hoped that it would go up given the steps we have taken to simplify procedures for making investment in the country,” said BoI Executive Chairman SA Samad.

Reinvested earnings (reinvestment by the foreign companies in Bangladesh) were up by nearly 42 percent year-on-year to $988.79 million last year.

“It shows that foreign investors still have faith in the country. They still see Bangladesh as a lucrative investment destination,” said Samad.

However, fresh investment in the country fell by more than 48 percent year-on-year to $280.31 million while intra-company loan declined by 28.64 percent year-on-year to $257.60 million in 2014.

Yesterday, the BoI with the help of Bangladesh Bank for the first time came up with data on the gross FDI flow to the country which was $2.058 billion last year.

Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, termed the Unctad report inaccurate. He said, “A lot of investments are coming to Bangladesh, but they are not being reflected in the Unctad report.”

Talking to The Daily Star, Zahid Hussain, lead economist of World Bank in Dhaka, said international observers follow the actual FDI flow as it is recognised globally.

He said energy, banking, telecommunications and garment sectors bring major FDI to Bangladesh. “But all of them have been facing problems for the last couple of years. As a result, the FDI flow went down.”

The economist also pointed out the barriers, including political uncertainty, international investors face. He mentioned about the government’s unilateral plan to take back the land it had allocated to Korean Export Processing Zone Corporation in Chittagong.

“Such incidents send a wrong message to international investors as they want protection of their investment,” said Hussain.

Courtesy: The Daily Star