October 16, 2019

FDI jumps 50.1pc

to $3.89b in FY’19
Presenter: Avijit Sarker (ZR1803003)
 The Author

Asjadul Kibria
Education
BSS (Hons), MSS. Economics
University of Dhaka

Work
Planning Editor, The Financial Express Bangladesh
Past: Prothom Alo
 FACTS
FDI Rises 50.71%
FDI in FY’19 is $3.89b
Intra-Bank Loan Doubled
Equity Capital becomes
$1.19b
Outstanding Stock of FDI is
$18.68b in FY’19
 Inflow
Around 95% of FDI comes from
non-EPZ farms

Sector-wise FDI Inflow

FDI Inflow for Bangladesh
4500 1400
4000 1200
3500 1000
3000
800
2500
600
2000 3888.99
1500 400
2454.81 2580.44
1000 2003.53 200
500
0
0
FY 2016 FY 2017 FY 2018 FY 2019 -200

Sharp increase in net FDI inflow during FY’19

Source: Bangladesh Bank

 Scenario

Who Contribute to FDI and Where it Flows

Top Countries Investing In Top Sectors Bringing

Bangladesh
China- $1.03 billion
Netherlands- $692 million
UK- $$371 million
USA- $174 million
FDI
Power- $1.01 billion
Food- $730 million
Textile- $430 million

Source: Dhaka Tribune

 Scenario
Who Contribute to FDI and Where it Flows (Cont.)

Source: Dhaka Tribune

 Initiatives & Result
Creation of a true One-stop Service (OSS) for the investors
Establishing 11 Special Economic Zones (SEZ)
Reduction of Cost and Time for Business establishment procedures and Exp-imp
Policy Reform and Efforts to improve the ratings of Bangladesh in various indicators such ‘Doing
Business report of World Bank’, ‘Global Competitive Index’ of the World Economic Forum and others

Foreign/JV Investment Proposals

Registered
Projects Project Value Manpower
Fiscal (Million USD)
year
       
2018-19 73 4061 14803

Source: BIDA,
Dhaka Tribune

Kazi M Aminul Islam
BIDA
“World Bank has named Bangladesh
among the top-20 improvers in
doing business in 2020. This is because
of  as the government’s various
initiatives, such as policy reforms,
removing infrastructural deficiencies and
creating a positive business environment
to encourage more investment by
creating a business-friendly
environment,”
Khondaker Golam Moazzem
CPD
“Amid stagnancy in private sector
investment, an uptrend in foreign
investment is a positive sign for the
country. It is because of
government's recent reforms, which
brought positive changes in doing
business,”
Expert
Opinion
Abdus Salam Murshedy
EAB
“Compared to the previous state of
business environment, the present
one is better as the government
steps have minimized the time for
getting business registration,
electricity connection and other
utility services,”
Source: Dhaka Tribune
 Recommendation

Open markets and allow for FDI inflows

Strengthen backward linkages from FDI into the indigenous
economy
Encourage spillovers from FDI into the indigenous economy

Encourage first-time foreign direct investors

Provide access to credit by reforming domestic financial

markets

9
9
 Question

Does FDI could negatively affect the Exchange Rate and

be a reason for the Trade Deficit?

Let’s Discuss…
Thanks!