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 Foreign direct investment (FDI) in the country rose by 39 per cent to $4.7 billion in fiscal year 2021-22 compared with that of $3.38 billion in the previous fiscal. In FY22, net FDI inflow also increased by 61 per cent to $2.17 billion against $1.35 billion in FY21, according to Bangladesh Bank data.
Over the last 10 years, FDI has been playing an essential role in maintaining the tempo of the current economic development of Bangladesh. 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 devise necessary measures to develop more infrastructures, build more skilled workforce, improve connectivity and encourage high-tech for a sustainable economic growth.
Bangladesh should devise necessary measures to develop more
infrastructures, build more skilled workforce, improve connectivity
and encourage high-tech for a sustainable economic growth
Experts are of the opinion that global inflation, supply chain disruptions and the Russia-Ukraine war might disrupt the growth of FDI in the country in the coming days. On top of that, soaring transport costs due to a hike in fuel oil prices, fuel and electricity shortages, and significant devaluation of the local currency taka could be a heavy drag on the FDI inflow.
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 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.