FDI rises despite global downturn

Bangladesh recorded a rise in foreign direct investment (FDI) last year, bucking a global downturn in cross-border investments, Board of Investment (BoI) said yesterday.
Actual FDI inflows rose 13.75 percent to $1.29 billion in 2012, the highest ever in the history of Bangladesh, said BoI referring to the World Investment Report 2013 by United Nations Conference on Trade and Development (UNCTAD).
The country received $1.13 billion in FDI in 2011, according to UNCTAD.
By registering the growth, Bangladesh secured the second position among eight Saarc nations, outpacing Pakistan in attracting foreign investors, said BoI that has been tasked with releasing UNCTAD report in Bangladesh since 2004.
India continued to be the leader in luring foreign investors. But FDI flow to India, the third biggest economy in Asia, slipped along with Pakistan and Nepal following the declining trend in FDI inflows across the world.
Globally, FDI inflows fell 18 percent to $1.35 trillion in 2012 from $1.65 trillion the previous year reflecting caution among investors about fragility and policy uncertainty in some major economies, said M Ismail Hossain, a professor of Economics at Jahangirnagar University, making a presentation on the UNCTAD report at the BoI office in Dhaka.
In Bangladesh, FDI growth rate slowed to 13.75 percent last year from 24.42 percent the previous year.
BoI Executive Chairman SA Samad said, "It is really a good sign that we have received increased FDI despite sluggish global economy".
He, however, said there was no room for complacency, as the amount of FDI inflows was less than what had been expected, considering the potentials of Bangladesh's economy.
Telecommunication sector received the highest amount of FDI followed by textiles, banking, power, gas and petroleum. Telecommunication and textiles together accounted for more than half of the total FDI in 2012, according to UNCTAD.
Of the total FDI in 2012, $497 million was equity investment, and $587 million was reinvested earnings, which grew 20 percent over the previous year.
Increased reinvested earnings signified the investors' confidence in Bangladesh's investment climate despite some think tanks' apprehension about the performance of the economy, said BoI.
Investors from Malaysia, the United Kingdom, Egypt, South Korea, Netherlands, Thailand and Hong Kong made higher investments in 2012, according to UNCTAD.