Foreign direct investment (FDI) is a powerful weapon of developing the Bangladesh economy and can play an important role in achieving the country’s socio-economic objectives including poverty reduction goals. In a capital-poor country like Bangladesh,FDI can emerge as a significant vehicle to build up physical capital, create employment opportunities, develop productive capacity, enhance the skills of local labor through transfer of technology and managerial know-how, and help integrate the domestic economy with the global economy.
During the liberation war in 1971 a nationalist weave emerged which gives Bangladeshis a spirit of freedom and dignity of independence but it also results on more reserved position in case of economic policy. Policy makers at that period used to see foreign companies access with a negative eyes. Foreign investments were discouraged as a result foreign direct investment (FDI) inflow in Bangladesh till 1980 is very insignificant. Afterwards a series of policy incentives, investment sovereignty has been offered to the FDI investors including tax holiday for several years, duty free facility for importing capital machinery, 100% foreign ownership, 100% profit repatriation facility, reinvestment of profit or dividend as FDI, multiple visa, work permit to foreign executives, permanent resident or even citizenship for investing a specific amount, Export Processing Zone (EPZ) facility, and easy hassle free exit facility. There are some potential sectors that can attract more FDI in Bangladesh. They are as follows:
- power generation
- Infrastructure development
- Private port establishment
- Joint venture with deep sea port establishment under PPP
- Ship building
- ICT sector.
- Call center.
- Health care.
- Gas extraction.
- Agro processed product.
- Electrical & electronics.
- Light engineering, and fashion designing etc.
After so many incentives offered by the government till now FDI Inflow into Bangladesh is not at a satisfactory level.During last few years fresh FDI investment in not taking place. From the statistics of last few years it is quite clear that, reinvestment of locally earned profit is the major amount of FDI into Bangladesh. Fresh FDI inflow is decreasing day by day. Government has to investigate the issue and undertake necessary measures to increase fresh FDI into Bangladesh.