BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

FOREIGN DIRECT INVESTMENT IN BANGLADESH : TREND AND PATTERN

Author: M. Tahlil Azim

DOI Link: https://www.doi.org/10.56888/BIISSj2000v21n2a1

ABSTRACT

The paper aims at tracing the trajectory of Foreign Direct Investment (FOI) flowing into Bangladesh. Data used in the study concern the volume of FOI registered in Bangladesh up to December 1997. It did not cover FDI in the extractive and financial services. The study revealed that as of December 1997, as many as 948 projects with commitments of Tk. 1,46,082 million foreign capital had been registered with the Ministry of Industries/Board of Investment and Bangladesh Export Processing Zone Authority. The analysis of the trend and pattern of FOI in the country indicates that, on the whole, the volume of FDI had been increasing over the years. As regards sources of FOI, Malaysia promised to be the largest investor in the country followed by South Korea. Hong Kong, UK, Japan, Singapore, USA, Germany, India and China. The sectoral pattern of FOI demonstrated that textiles and garments as a composite sector was the largest recipient of FOI followed by service sector, drugs and chemicals, agro-based sector, paper & allied products, and cement & ceramics sectors. Export Processing Zones (EPZs) were found to have a notable role in FOI scenario of Bangladesh, and on an average foreign capital in EPZs contributed to around 20% of the total stock of FOI in the country. The study concludes that in order to entice foreign investors, Bangladesh had to improve its overall investment climate with an emphasis on political climate, labour productivity and infrastructure development.