Foreign Direct Investment is the category of international investment that reflects the objective of a resident entity in one economy obtaining a lasting interest in an enterprise resident in another economy.
The global experience suggests that, depending on the country context, the benefits of FDI are highly uneven and can become ambiguous or possibly negative. However, given its present characteristics, Bangladesh is likely to benefit through more FDI inflows. It is important, therefore, for Bangladesh to ensure an investment climate that can attract more FDI flows to the country. For the purpose, several policy areas are important that are given below:
RECOMMENDATIONS TO INCREASE FDI INFLOW IN BANGLADESH
- Increasing power generation and other utilities (like gas, water) supplies to the manufacturing entity.
2.Preparing complete project profile (PP) and approaching relevant multinational companies (MNCs).
3.Establishing an Investment Promotion Agency other than the Board of Investment (Regulator).
4.Increasing government’s investment could be under public private partnership (PPP) modality to achieve trust of foreign investors.
5.Functional one stop investment service center to reduce investment relevant harassments.
- Increase/attract investment in infrastructure development.
7.Emphasizing on the job training to facilitate technology transfer and employment generation.
8.Attracting FDI into backward and forward linkage industries including testing laboratories, common facility centers, industrial park development and international value chain linkage industries.
9.Attracting cluster based investment to upgrade existing 177 SME Clusters in Bangladesh.
10.Emphasizing on labor intensive, import substitute, and export oriented industries.
Declaring a long range of fiscal/non-monetary incentive or having competitive advantage in factors of production is not enough to get FDI into a country. Government has to be proactive for creating and maintaining an FDI friendly business environment in Bangladesh. To get the satisfactory amount of FDI, Bangladesh has to complete its home work like identifying potential sectors, preparing specific project proposal, approaching potential FD Investor companies etc.