Foreign Direct Investment in Bd

Topics: Investment, Foreign direct investment, Macroeconomics Pages: 10 (3140 words) Published: April 4, 2013
Executive Summary

The overall report is prepared focusing on the scenario of FDI (Foreign Direct Investment) in Bangladesh. There are many prospects of FDI in Bangladesh. The Countries that invest in Bangladesh mainly or supply currencies in the form of investment emphasizes on the economic stability. The provision of FDI exerts that the balanced growth should be the result of the economy. There are many sectors that are highlighted in report that could be the target of Foreign Direct Investment. The weakness of the governance to flourish the economy has also been depicted in the main part of the report. The past rate of FDI and some of the interest of the investors has been presented throughout the report. The competitive advantages are the availability of the natural resources, location, human resources, GSP facility etc. The graphical presentation of FDI trends has also been provided. The sources that can the locus of the FDI are discussed with logic. There are some prospective sectors that are to be considered with special care such as textile, leather, frozen food, agro based industry, information technology etc. The overall discussion shows a complete picture of the present scenario and the prospects of the foreign direct investment in Bangladesh. The recommendation part provides a “to do list” that can be followed to reflect the full impact of the FDI in Bangladesh. Finally the economic consideration and the objective of implementation of FDI should be integrated to bring the maximum benefit for Bangladesh.

Economic supremacy is the foremost feature of the current world. In order to survive, Bangladesh has no other options but to attain economic development. Foreign Direct Investment (FDI) is recognized as a key component for economic growth for Bangladesh. Being one of the Least Developed Countries (LDC) with insufficient domestic savings rate for investment after fulfilling its basic needs, the importance of foreign investment is unquestionable. Foreign Direct Investment (FDI) will create employment, increase efficiency of labor, encourage technology transfer and develop new exportable sector. To attract more and more FDI the government of Bangladesh has been trying to establish private investment friendly environment. A number of opportunities have been given by the Government of Bangladesh (GoB) to attract foreign investors to invest in the country in some prospective sectors. As Bangladesh does not have sufficient domestic savings for investment, foreign investment is the most powerful ingredient for its economic development. In international business FDI has become a significant component for many countries. Nowadays Asian countries have a great influence in the global economy. Though Bangladesh is comparatively lagging behind of them, there are a lot of opportunities to attain economic development by undertaking some initiatives. Considering the above facts the overall purpose of preparing the paper was to identify the prospect of Foreign Direct Investment in Bangladesh Economy.

1.1 Defining FDI

FDI is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor exerts a significant degree of influence on the management of the enterprise resident in the other economy. Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals as well as business entities. Flows of FDI comprise capital provided (either directly or through other related enterprises) by a foreign direct investor to an FDI enterprise, or capital...
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