FDI inching up

Foreign direct investment in Bangladesh rose only 5.11 percent in fiscal 2017-18 from a year earlier the progress being slow because of inadequate infrastructure and poor ranking in the World Bank’s Ease of Doing Business index.

Bangladesh ranked 176 out of 190 countries in the World Bank’s Ease of Doing Business index this year, the lowest ranking for a South Asian nation.Last fiscal year, net FDI stood at $2.58 billion in contrast to $2.45 billion a year earlier, according to the central bank.FDI flow has been maintaining a rising trend in recent years but it was not up to the mark given the GDP size, said AB Mirza Azizul Islam, a former finance adviser to a caretaker government.The country’s FDI to GDP ratio has been hovering below 1 percent for long but its peers like Vietnam, China, India and Cambodia have more than 2 percent, he said.

“Foreign businesses place great importance on the Ease of Doing Business ranking before taking an investment decision.”

Bangladesh is yet to become an investment destination for foreigners due to its poor governance, unavailability of energy supply, infrastructure deficits, corruption, political uncertainty and concerns over security, Islam said. The power sector saw the highest inflows in fiscal 2017-18 of $589 million, followed by textile at $459 million and banking at $321 million.

Navojit Dastidar