Bangladesh: A Good Destination for Foreign Investment

4 Pages Posted: 24 May 2009

Date Written: May 23, 2009

Abstract

Economic supremacy is the dominant feature of the present-day world. In order to survive, we have no option but to attain economic development. Foreign investment is recognised as a key ingredient for economic growth for the least developed countries (LDCs) and for Bangladesh, being one of the LDC with a domestic savings rate -- which in quite insufficient for investment after fulfilling its basic needs -- the importance of foreign investment is undeniable.

Today investing in a developed country is not viable due to very high labour cost and other factors. As a result, global investors are seeking for opportunities to invest in the developing countries or LDCs for the best return. But as an LDC, we have a lot to do to attract such investments in our own interest. Foreign direct investment (FDIs) will create employment, increase efficiency of our labour, encourage technology transfer and develop new exportable sectors for us.

Foreign investment in Bangladesh unfortunately, is not satisfactory. According to the UNCTAD, in 2003 Bangladesh had achieved only 0.05 per cent foreign investment, while the proportion was 0.9 per cent in India, 0.52 per cent in Vietnam, 10.2 per cent in Indonesia and 70 per cent in China.

In Bangladesh, most foreign investments have gone into the energy sector (mineral resources / mining). Comparatively foreign investment in the manufacturing sector is not high. This may be due to the fact that Bangladesh has a small domestic market and is not fully capable of consuming quality goods due to low purchasing power.

Suggested Citation

Abdin, Md. Joynal, Bangladesh: A Good Destination for Foreign Investment (May 23, 2009). Available at SSRN: https://ssrn.com/abstract=1409028 or http://dx.doi.org/10.2139/ssrn.1409028

Md. Joynal Abdin (Contact Author)

DCCI Business Institute (DBI) ( email )

DCCI Building (11th Floor), 65-66 Motijheel C/A
Dhaka, 1000
Bangladesh

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