Abstract
During the liberation war in 1971 a nationalist weave emerged which gives Bangladeshis a spirit of freedom and dignity of independence but it also results on more reserved position in case of economic policy. Policy makers at that period used to see foreign companies access with a negative eyes. Foreign investments were discouraged as a result foreign direct investment (FDI) inflow in Bangladesh till 1980 is very insignificant. The growth of Bangladesh’s FDI inflow was around US$ 308 – 356 million for long fifteen years (1980 – 1995) which started with an amount of US $ 0.090 million in 1972. Afterwards this concept has been changed into a reverse position and government start encouraging foreign direct investment from 1990s. A series of policy incentives, investment sovereignty has been offered to the FDI investors including tax holiday for several years, duty free facility for importing capital machinery, 100% foreign ownership, 100% profit repatriation facility, reinvestment of profit or dividend as FDI, multiple visa, work permit to foreign executives, permanent resident or even citizenship for investing a specific amount, Export Processing Zone (EPZ) facility, and easy hassle free exit facility. Potential sectors of can attract more FDI are power generation, infrastructure development, private port establishment, joint venture with deep sea port establishment under PPP, ship building, ICT sector, call center, education, healthcare, mining, gas extraction, agro processed product, electrical & electronics, light engineering, and fashion designing etc. After so many incentives offered by the government till now FDI Inflow into Bangladesh is not at a satisfactory level. During last few years fresh FDI investment in not taking place. From the statistics of last few years it is quite clear that, reinvestment of locally earned profit is the major amount of FDI into Bangladesh. Fresh FDI inflow is decreasing day by day. Government has to investigate the issue and undertake necessary measures to increase fresh FDI into Bangladesh.
Highlights
Bangladesh is one of the N11 Countries [1]
We would like to analyze how much Foreign Direct Investment (FDI) Bangladesh do received since its independence? What are the factors hindering FDI flow into Bangladesh? How Bangladesh could increase FDI inflow? To facilitate employment generation, increase GDP growth rate, technology transfer and poverty alleviation
Which sectors are getting more attention of the FDI investors? What are the potential sectors for investment in Bangladesh? What government could do more to attract FDI into Bangladesh?
Summary
Bangladesh is one of the N11 Countries [1]. It is considered as a land of opportunities because it is growing 6%-7% annual growth rate during last one and half decade without any major governmental incubation. Large local market and special packages from the government side remain them in the field Bangladesh is such an LDC with absolute advantage to attract FDI. After implementing all prerequisites of free market economy, establishing EPZs, declaring a handsome amount of fiscal and non-fiscal incentives Bangladesh’s performance in FDI attraction in recent year is not satisfactory. It is not growing as it should be, question may be raised that, Bangladesh earned US $ 1.09 billion FDI in 2009 it is 63% more than 2008 [4]. Government is welcoming foreign investment into Bangladesh to facilitate employment opportunity, foster economic growth and poverty alleviation. We would like to analyze how much FDI Bangladesh do received since its independence? What are the factors hindering FDI flow into Bangladesh? How Bangladesh could increase FDI inflow? To facilitate employment generation, increase GDP growth rate, technology transfer and poverty alleviation
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