Foreign direct investment (FDI) in Bangladesh increased by 44.83 per cent to $1.73 billion, the highest in recent years, in the financial year 2012-13, according to the latest Bangladesh Bank data. The BB data showed that the country had received $1.73 billion FDI in the FY13 against $1.19 billion in the FY12. Bangladesh received $779.04 million FDI in FY11, $913.02 million in the FY10 and $960.59 million in the FY09.
The BB officials told New Age on Sunday that the entrepreneurs of the three NRB banks, which got licences in the FY13 for operating banks in Bangladesh, had brought equity capital amounting to $152.38 million from abroad in the form of paid-up capital that accounted for increasing the FDI inflow.
The three banks are NRB Commercial Bank, NRB Global Bank and NRB Bank.
The BB data showed that the highest portion of the FDI in the FY13 was $712.88 million that came to the manufacturing sector. The second biggest was $527.09 million to the transport and storage sector while the third $525.29 million, went to telecommunication sector.
The FDI is usually divided in three parts, which are equity capital, reinvested earnings and intra-company loans.
The BB data showed that the equity capital in the FY13 increased by 67.59 per cent to $761.03 million against the previous year’s $454.10 million. The country received $249.95 million in equity capital of the FDI in the FY11 and $515.14 million in the FY10.
Equity capital means a fresh investment which the investor brings from his home country.
Reinvestment earning increased by 19.04 per cent and stood at $645.64 million in the FY13 from $542.35 million in the FY12. The country received $445.19 million in reinvested earnings of the FDI in the FY11 and $331.10 million in the FY11.
Reinvested earnings mean that the investors make investment from their earning of the existing business.
Inter-company loans increased by 63.26 per cent to $323.96 million in FY13 from $198.43 million in the FY12. The country received $83.90 million in reinvested earnings of the FDI in the FY11 and $66.78 million in FY11.
Intra-company loan means foreign enterprises which work in Bangladesh receive loan from their parent companies to fulfill their instant need.
In the FY13, the highest investment of $337.97 million came from Malaysia, $159.49 million from United Kingdom, $138.14 million from Egypt and $124.94 million from South Korea.
A BB official said that the FDI in the FY13 had increased significantly as some small entrepreneurs of the foreign countries had invested here in different sectors.
‘The country failed to attract large chunk of FDI in the industrial sector in the last fiscal year. Political uncertainty was one of the causes of reduced FDI inflow in the period although the central bank relaxed the policies significantly for the foreign exchange related business’, he said.
He, however, said an increased trend in the FDI usually played a positive impact on any country’s balance of payment.
For this reasons, the country’s financial account and the overall balance of the BoP maintained a satisfactory position in the FY13 due to the increased trend in the FDI inflow, he said.
-With New Age input
