http://www.thefinancialexpress-bd.com/2009/06/16/69964.html
FDI up by 67.4pc in nine months
FHM Humayan Kabir
Foreign direct investment (FDI) in Bangladesh has swelled to US$882 million, up by 67.4 per cent, in first nine months of the current financial year compared to the same period last year, officials said Monday.
The central bank data showed net investment by the foreign firms in July-March period of last FY2008 was worth of $527 million, which has risen by $355 million to $882 million in the same period of this fiscal.
“It’s a great news for Bangladesh. At last, the country has started to recover from the ailing FDI trend in last couple of year,” a Bangladesh Bank (BB) official told the FE.
The investment flow of $882 million during nine months (July-March) of current fiscal is also 36 per cent higher than US$650 million investment during 12 months of the previous FY2007, the central bank official said.
He said political stability and transition to democracy have mainly helped to regain the investment flow to the country from second quarter in the outgoing financial year.
He said during the interim government period imposition of the state of emergency had affected the FDI flow to Bangladesh though it had been maintaining growth till FY2006.
In FY2006, Bangladesh bagged $793 million worth of net foreign direct investment, which plunged to $650 million in FY2007 and to $527 million in FY2008.
Economist Mustafizur Rahman told the FE that it was a good news that the FDI flow started to regain in the current fiscal.
“But you should bear in mind that the country has grabbed $300 million single investment from a Japanese company to local mobile phone industry which helped build the net foreign investment,” he said adding if the trend shows a gain in the last quarter then the real picture would be realised.
Mr. Rahman, also executive director of the local think tank –Centre for Policy Dialogue (CPD), said there is massive potentiality of investment in the coming days as the registration for fresh investment with the Board of Investment (BoI) has gone up nearly three-fold.
“If the government can supply adequate energy and develop the infrastructure, plenty of investment will come to the country,” he said.
A senior BoI official said there are lot of investment proposals coming especially for the textile sector.
“We’ve already registered billions of dollars worth of investment proposals both from local and foreign countries this fiscal. It is more than double compared to the same period last fiscal,” he said requesting anonymity.
As per BoI statistics, the board has registered $4.1 billion worth of investment proposal till April this financial year, more than half a billion dollar higher than the total registration in previous FY2008.
The BoI official said most of the investment proposals are coming to the manufacturing sectors including textile, pharmaceuticals, sports-wear etc.
Mustafizur Rahman said since the government has proposed adequate funds in the next budget for power and energy sector development and introduced new paradigm of investment –public-private partnership (PPP), there is potentials of boosting investment.
Zaid Bakth, research director of Bangladesh Institute of Development Studies (BIDS), said: “Since Bangladesh has abundant cheap labour, some manufacturing units from different countries including China have been relocating to the country. It will boost our investment further.”
There is a possibility of a heafty sum of foreign investment in energy and power sector in the coming days, he added.
Mr. Bakth said the government should take quick decision on the “offshore bidding round 2008″ for the sake of exploring new oil and gas sources as those would facilitate more investment to the country.
