Direct Foreign Investment (Dfi) And Bangladesh- Facts And Fantasy

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Direct Foreign Investment (DFI) and Bangladesh- Facts and fantasy

Bangladesh is enjoying the Direct Foreign Investment (DFI) very poorly in comparison with India, China or other Asian countries. In this study we would like to find out some reasons and would discuss the relevant matters that might shed better light on the Bangladeshi economy.

The economic calculation:

  • In order to achieve the 8% growth in the Gross Domestic Product, we have to have 32% investment, which is at present 23-24% maximum.

  • Bangladesh gets 79% investments from ten Western and Eastern Countries. USA and UK hold 30% of the total foreign stakes. 

The tendency of the foreign companies is to harvesting, rather than reinvesting further, particularly the Oil, Gas, and Electricity producing companies are doing this.

Positive sides:

  • Government is providing policy facilities open handedly to DFI

  • Specialized economic zone, Specialized Economic Zone (SEZ) Act has been drafted, which would be directly related to Prime Minister’s office. So, Government, in other sense, would turn to a business party, one might wonder! 

  • Current tendency for foreign investment is service sector;

The reasons for poor Direct Foreign Investment could be summed up as follows:

  • Mainly it’s the infrastructure and lack in good governance, or corruptions.

  • Government is only announcing promotional packages and benefits for investing DFIs; yet it is not getting fruitful results! There must be some hidden reasons; experts are blind to see them!

  • Corruptions in all departments and sections;

  • Inefficient government bureaucracy;

  • Ever changing policy, or instability in policy matter;

  • Limited number of highly skilled resources, human resources;

  • Global recession;

  • Long chain of processing documents and papers in doing business;

  • Functions and role of Investment Board is also a matter of investigation;

  • Political destructive and instability in following policy matters.

  • For particularly energy sector, proper communication and invitation to the right parties are not done properly and timely;

  • High administrative costs, due to bribery in all the sectors. 

If considering the above proper measures are not taken by the Bangladesh Government, aspiration and hope would be like high and dry in future like today, the rests rhetoric. Only words cannot soft the beaten rice or rather other wittingly comments ‘crunchy fries require pan-full of oil.

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