It is encouraging to note that Foreign Direct Investment (FDI) in Bangladesh increased by 50.14 per cent to $888.48 million in the first quarter of this year. Reportedly, the net inflow of overseas investment stood at $888.48 million during the January-March period, which was $592 million in the same period of the previous year.
A recent report by the US Department of State said that corruption was a major obstacle for obtaining foreign investments in Bangladesh, despite gradual progress in reducing some constraints. Reportedly, Bangladesh received $2.56 billion foreign direct investment in 2020, with the rate of FDI inflow being only 0.77 per cent of the gross domestic product, one of the lowest rates in Asia. The US report, however, noted that Bangladesh would likely continue to attract increasing investment, despite severe economic headwinds created by the global Covid outbreak.
Necessary steps should be taken to ensure better business
facilities alongside market diversification to garner more FDI
Over the last 10 years, FDI has been playing an essential role in maintaining the tempo of the current economic development of Bangladesh. Foreign direct investment (FDI), the bedrock of Bangladesh’s economic growth, is considered an important motivator of economic development and a principal avenue for the development finance.
It is good to note that considering the country’s prevailing investment-friendly policies and overall development, foreign companies are showing their zeal to invest in Bangladesh. Therefore, we need to gear up efforts and devise necessary initiatives to attract more foreign investments. Following the other Asian countries which have been able to attract massive FDI, Bangladesh should take immediate steps to develop more infrastructures, build more skilled workforce, improve connectivity and encourage high-tech for a sustainable economic growth.
FDI has immensely contributed to reinforcing foreign reserves, creating new job opportunities and increasing labour skills in recent times. Needless to say, all these are the consequences of the government’s earnest endeavours and various time-befitting policies to attract investors and to create a congenial atmosphere for boosting the FDI inflow. It is worth mentioning that the incumbent government pursues the most liberal investment policy in South Asia which incorporates protection of FDI by law and duty-free import of raw materials.
Though the FDI has been increasing over the years, experts say that yet there is room for further investment in the coming days, especially in the post-corona era. Hence, necessary steps should be taken to ensure better business facilities alongside market diversification to garner more FDI. Last but not least, business-friendly environment, taxation reform and long-term policy are needed to boost FDI inflow.