Fdi and Business Environment in Bangladesh
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INTRODUCTION
The current issue of the Bangladesh Economic Update focuses on the magnitude, dynamics, sectoral distribution, and country-wise sources of FDI inflow in the country. The flow of foreign direct investment is of utmost importance in the current backdrop of overall slump in investment in the economy in recent days. If FDI falls, it will reduce investment, which in turn will shrink employment generation. These may lead to decline in consumption level and savings will face a downward trend. There would be, as a result, a contagious pressure on the GDP growth of Bangladesh.
Foreign Direct Investment (FDI) is considered as one of the crucial ingredients for fostering economic development of a developing country. Countries that are lagging behind to attract FDI are formulating and implementing new policies for attracting more investment. Even compared to other South Asian countries, FDI inflow to Bangladesh has traditionally been lower.
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The future outlook of FDI is grim. Based on the recent years’ performance, it is predictable that the share of FDI as percentage of GDP may decline by widening gaps between the projected medium term targets by the government and the actual receipts of the inflow. The FDI inflows as percentage of total investment may decline further.
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Meaning of FDI
The term, Foreign Direct Investment (FDI) can be defined as the investment which is directly invested in a particular country (host country) by the people of the other countries (home countries) in collaboration with the local investors or alone.
According to the definition given by the World Trade Organization (WTO), “FDI occurs when an investor based in one country (the home country) acquires an asset in another country (the host country) with the intent to manage
INTRODUCTION
The current issue of the Bangladesh Economic Update focuses on the magnitude, dynamics, sectoral distribution, and country-wise sources of FDI inflow in the country. The flow of foreign direct investment is of utmost importance in the current backdrop of overall slump in investment in the economy in recent days. If FDI falls, it will reduce investment, which in turn will shrink employment generation. These may lead to decline in consumption level and savings will face a downward trend. There would be, as a result, a contagious pressure on the GDP growth of Bangladesh.
Foreign Direct Investment (FDI) is considered as one of the crucial ingredients for fostering economic development of a developing country. Countries that are lagging behind to attract FDI are formulating and implementing new policies for attracting more investment. Even compared to other South Asian countries, FDI inflow to Bangladesh has traditionally been lower.
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-------------------------------------------------
The future outlook of FDI is grim. Based on the recent years’ performance, it is predictable that the share of FDI as percentage of GDP may decline by widening gaps between the projected medium term targets by the government and the actual receipts of the inflow. The FDI inflows as percentage of total investment may decline further.
-------------------------------------------------
Meaning of FDI
The term, Foreign Direct Investment (FDI) can be defined as the investment which is directly invested in a particular country (host country) by the people of the other countries (home countries) in collaboration with the local investors or alone.
According to the definition given by the World Trade Organization (WTO), “FDI occurs when an investor based in one country (the home country) acquires an asset in another country (the host country) with the intent to manage