World Investment Report-2017
Modest 4.4pc growth in FDI
STAFF REPORTER
Bangladesh experienced a modest growth in foreign direct investment (FDI) inflows of 4.4 per cent, which is one-tenth of the growth rate observed in 2015, according to the World Investment Report-2017 of UNCTAD.
Bangladesh received FDI of USD 2,332.72 million in 2016, which is the highest ever in the history of the country, and the amount is 4.39 per cent higher than USD 2,235.39 million recorded in 2015.
The Bangladesh Investment Development Authority (BIDA) released the UNCTAD World Investment Report (WIR)-2017 at a function at the Pan Pacific Sonargaon hotel in the city yesterday.
In 2016, the FDI flow fell globally by about 2 per cent and investment in developing countries declined by 14 per cent, while the flow of FDI to developing countries remained volatile and low, said the report.
The net inflow of FDI to Bangladesh in 2016 was USD 72.76 million in the telecommunication sector, USD 364.44 million in the textile and wearing sector, USD 267.97 million in the power sector, USD 166.07 million in the banking sector, USD 166.34 million in the gas and petroleum sector, USD 88.39 million in the trading sector, USD 43.15 million in the agriculture and fisheries sector, USD 43.73 million in the pharmaceutical and chemical sector, USD 25.21 million in the leather and leather products sector, USD 22.05 million in the computer software and IT sector, and USD 572.61 million in other sectors.
Data shows that the trend of reinvested earnings increased by 5.81 per cent in 2016. This signifies the confidence of investors in the investment climate of Bangladesh.
In his keynote presentation, executive director of the Policy Research Institute (PRI) Bangladesh, Dr Ahsan H. Mansur, said the FDI in Bangladesh accounted for only 4 per cent of South Asias total FDI inflows. The major recipient of FDI inflows in South Asia was India.
In terms of total global FDI inflows, Bangladesh accounted for only 0.1 per cent of global FDI inflows, he added.
He said the FDI flows to developing countries were particularly hit hard, with a 14 per cent decline to USD 646 billion.
The United States remained the worlds largest outward-investing country in 2016, with outflows of USD 299 billion, followed by China (USD 183 billion) and the Netherlands (USD 174 billion).
It is interesting to observe that FDI outflows from developing Asia rose by 7 per cent to USD 363 billion, primarily due to the Chinese outward investments
In South Asia, India experienced the highest growth in FDI inflows with USD 48,400 million, followed by Bangladesh (USD 2,383 million) and Pakistan (USD 1,281 million).
Dr Mansur mentioned that since 2009, Bangladesh has been receiving FDI on a steep trend, with an average growth of 20 per cent. Starting from USD 900 million in 2009, it received USD 2,383 million in 2016.
The salient feature of this growth is the presence of a large portion of investment earnings in the FDI inflow. This represents the confidence of existing investors in the countrys performance, he observed.
Dr Abul Kalam Azad, chief coordinator (SDG) in the Prime Ministers Office, attended the function as chief guest. He said the gross inflow of investment should be the basis of the FDI inflow and the net inflow can be shown along with it.
He also said the government and BIDA on its behalf have been trying hard to sustain and foster the current FDI inflow in order to augment the economic development of Bangladesh so that it becomes a middle income country by 2021 and a developed country by 2041, and, in particular, achieves the SDG Goals.
BIDA executive chairman Kazi Aminul Islam, who presided over the function, said BIDA has been taking measures to improve the investment climate of Bangladesh.
FDI is showing a rising trend because of sound economic fundamentals of the country and this should be sustained. The economy of Bangladesh is strong and capable of fostering much higher growth, he added.
