The foreign direct investment in Bangladesh increased by 13.75 per cent to $1,292.56 million in 2012 than that of in 2011 when the country received record $1,136.38 million in FDI, according to the World Investment Report-2013 published on Wednesday.
According to the WIR, published by United Nations Conference on Trade and Development, out of $1.29 billion, telecommunications sector received the highest amount of FDI amounted to $374.97 million because of increased investment from Egypt and Malaysia, followed by manufacturing, trade and commerce, power, gas and petroleum, and food products sectors.
The manufacturing sector received $512.21 million dominated by textile sector with $307.48 million, trade and services sector received $163.72 million dominated by banking sector with $136.47 million, power, gas and petroleum sector received $126.63 million and agricultural sector received $74.55 million in FDI in the year.
However, only $497.63 million or 38.49 per cent of the total FDI inflows in 2012 came as fresh equity investment while $587.53 million or 45.45 per cent was reinvested earnings while $207 million came as intra-companies loan.
In receiving FDI, Bangladesh secured second position, after India, among the South Asian countries in the year, said Board of Investment executive chairman SA Samad at his office in Dhaka while unveiling the UNCTAD report on the day.
The FDI flow globally declined by 18 per cent to $1.35 trillion in 2012 from $1.65 trillion in the previous year, he said, adding that Bangladesh registered a significant growth in the year and proved itself as an attractive destination for FDI.
‘It is really a good sign that FDI inflows increased in the country despite sluggish global economy and investment scenario,’ Samad said.
He, however, said that the amount of FDI came in the country was less than the expected amount considering the potential of the country’s economy.
Bangladesh should receive $5 billion in foreign investment to gain 8 per cent economic growth every year, he added.
The BoI chairman said that reinvested earning increased which signified the confidence of the investors in the investment climate of Bangladesh despite apprehension on the performance of the economy by local and international think-tanks.
He said that investors from Malaysia, United Kingdom, Egypt, South Korea, Netherlands, Thailand and Hong Kong invested higher in 2012.
Malaysia invested the highest amount of $247.35 million, followed by UK $136.94 million, Egypt $126.6 million, South Korea $97.59 million and Netherlands $79.82 million.
Power and energy adviser to the prime minister Tawfiq-e-Elahi Chowdhury termed the Bangladesh performance positive despite global economic slowdown.
‘The world economy is now gripped by economic recession. So it is our credit to maintain the FDI inflows in such circumstances,’ he said.
Among the South Asian countries, India received the highest amount of FDI of $25.5 billion, $6 billion less than that of previous year. The FDI flow to India along with Pakistan and Nepal declined in the year following the globally declining trend, the WIR showed.
While presenting the report, M Ismail Hossain, a professor of economics at Jahangirnagar University, said, ‘Investors have become cautious about their new investment because of fragility and policy uncertainty in some major economies across the world and that’s why the overall global FDI inflows declined.’
According to the report, developed economies recorded the biggest fall followed by transition and developing economies. The FDI flows to developing Asia slipped by 7 per cent.
-With New Age input
