Foreign direct investment (FDI) rises to $1.13b

Unctad report on 2011 says textile, banking, energy, telecoms sectors attract most of the amount.

Foreign direct investment in Bangladesh last year rose by 24.42 percent to $1.13 billion, the highest in its history, according to Unctad’s World Investment Report-2012.

The country received $1.08 billion as its second highest FDI in 2008.

The report was released in Bangladesh by SA Samad, executive chairman of Board of Investment (BoI), at his office on Thursday.

The United Nations Conference on Trade and Development (Unctad) report also says the country’s economic growth last year was slower compared to 2010 when FDI increased by 30 percent to $913 million.

Globally, the FDI inflow last year soared by 16 percent and stood at $1.5 trillion. Three largest FDI recipients were the US ($227 billion), China ($124b) and Belgium ($89b).

FDI in India increased by 29 percent to $31.55 billion while in Pakistan it plunged to $1.32 billion falling by 52 percent.

Based on the Unctad report, M Ismail Hossain, an economics professor at Jahangirnagar University, made a presentation at the BoI office on Thursday about the investment outlook of Bangladesh and the world.

According to the presentation, the highest chunk of FDI in 2011 was $272.04 million that came to textile and apparel sector. The second biggest was $249.37 million to the banking sector while the third, $238.21 million, went to power, gas and petroleum sectors. Besides, telecommunications sector attracted $180.99 million.

The highest investment of $152.30 million came from Egypt against its investment of $3.01 million in 2010. The US invested $117.74m which was $56.95m a year back. The Netherlands‘ investment was $116.75m, up from $64.92m of the previous year.

The countries that made big investments in 2011 include the UK ($116.32m), South Korea ($113.06m) and Hong Kong ($104.84m).

The presentation also showed equity capital of the total FDI last year decreased by 16.94 percent to $431.85 million. Equity capital means a fresh investment which the investor brings from his home country.

However, reinvestment increased by 34.28 percent and became $489.63 million and inter-company loan shot up by 648.25 percent and stood at $214.90 million in 2011.

A BoI report presented on the occasion said reinvested earning and inter-company loans had apparently increased to a large extent, signifying investor confidence despite apprehension about the economy by various quarters.

Projecting the total FDI situation in 2011, SA Samad said Bangladesh could attract more investment if policy was not changed frequently.

He added the BoI has taken various steps to increase inflow of FDI and built a new website to post updates on the industry and economy.