Foreign Direct Investment in Bangladesh

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Assignment on Foreign Direct Investment in Bangladesh

Prepared By
Name: Sharmin Hussain
ID :2010-3-90-004
Subject Code: MBM-506
Subject Title: Economic Condition Analysis.

Prepared For

Professor Abdul Bayes

TopicPage No
Current Situation of FDI in Bangladesh3
Overall FDI inflows3
FDI inflows by Components:4
FDI Inflows by EPZ and Non-EPZ Areas6
FDI Inflows by Major Sectors7
FDI Inflows by Major Countries9
Stock Position of Foreign Direct Investment (FDI)11
(a) Overall Stock position of Foreign Direct Investment (FDI):11 (b) Stock position of Foreign Direct Investment (FDI) by Major Sectors:11 (c) Stock position of Foreign Direct Investment (FDI) by Major Countries:12 Stock Position of Private Sector External Debt (PSED):14

Impact on Balance of Payments15
Policy Implications17
Conclusions 19

Table 1: FDI Inflows by Components (Jan-Jun, 2007 to Jul-Dec, 2009).5 Table 2: FDI Inflows by Areas and Components (July-Dec, 2008 to July-Dec, 2009).7 Table 3: FDI Inflows classified by Major Countries and Major Sectors for the period of July-December, 2009.10 Table 4: FDI Stock classified by Major Countries and Major Sectors as on December, 200913

Figure 1: Half Yearly FDI Inflows (Jan-Jun2007 to Jul-Dec 2009)3 Figure 2: Yearly FDI Inflows (2005 to 2009)4
Figure 3: Half Yearly FDI Inflows by Components5
Fig-4: FDI Inflows for EPZ & Non EPZ Area 6
Fig-5: FDI Inflows for Non EPZ Area ( Jul-Dec 2009)6
Fig-6: FDI Inflows EPZ Area ( Jul-Dec 2009)6
Figure 7: Major Sector Wise FDI Inflows During July- December 20098 Figure 8: Major Country Wise FDI Inflows During July- December 20099 Figure 9: Stock Position of FDI11
Figure 10: Trends in Major Sector Wise FDI Stocks12
Figure 11: Trends in Major Country Wise FDI Stocks12
Figure 12: Stock Position of Private Sector External DEBT14 Fig-13: Sector Wise FDI Inflows15


The economy of Bangladesh is a developing market-based economy. Its per capita income in 2008 was est. US$1,500 (adjusted by purchasing power parity). According to the International Monetary Fund, Bangladesh ranked as the 48th largest economy in the world in 2009, with a gross domestic product of US$256 billion. The economy has grown at the rate of 6-7% p.a. over the past few years. More than half of the GDP belongs to the service sector; nearly half of Bangladeshis are employed in the agriculture sector, with RMG, fish, vegetables, leather and leather goods, ceramics, rice as other important produce. Remittances from Bangladeshis working overseas, mainly in the Middle East is the major source of foreign exchange earnings; exports of garments and textiles are the other main sources of foreign exchange earning. GDP's rapid growth due to sound financial control and regulations have also contributed to its growth. However, foreign direct investment is yet to rise significantly. Bangladesh has made major strides in its human development index. Improving at a very fast rate, infrastructure to support transportation, communications, power supply and water distribution are rapidly developing. Bangladesh is limited in its reserves of oil, but recently there was huge development in coal mining. The service sector has expanded rapidly during last two decades, the country's industrial base remains positive. The country's main endowments include its vast human resource base, rich agricultural land, relatively abundant water, and substantial reserves of natural gas, with the blessing of possessing the world’s only natural sea ports in Mongla and Chittagong, in addition to being the only central port linking two large burgeoning economic hub groups SAARC and ASEAN. Foreign direct investment (FDI) is a potent weapon of developing the Bangladesh economy and can play an important role in achieving the country’s socio-economic objectives including...