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Foreign Direct Investment (FDI) in this year tapered off as first three months of this year fetched only $58.21 crore dollars which is 44% less than this time of the previous year when the actual investment was $103.55 crore dollars, thanks to the coronavirus pandemic.
Bangladesh Investment Development Authority (BIDA) said in April and May of this year, FDI became zero as the world was going through an unprecedented situation because of Covid-19. However, between June to August, some foreign companies showed interest to invest and many of them also registered. In June, there were four investment proposals. In July and August number of investment proposals listed were ten and five respectively but not a single proposal turned into a financial investment.
BIDA statistics revealed that in current year from April to June, investment proposals declined to 55% in comparison with the same period of the previous year. In 2019, from April to June registered investment proposals worth $3.42 crore and in same period of the current year investment proposals plummeted to $1.53 crore.
BIDA data showed that, in the first quarter of the current year, the United Kingdom leads in FDI followed by Norway, United Arab Emirates, USA, Singapore and Thailand in telecommunication, construction, power, garments, bank, gas, ICT, leather, insurance and cement sectors.
Chairman of BIDA, Sirajul Islam taking to The Business Post on Monday said, “Coronavirus pandemic took a severe toll on FDI as the world is still reeling from unexpected coronavirus pandemic shock. The world is still going through pandemic. Lockdown has been lifted and the business is trying to get back to its previous track again with the investors taking go slow strategy considering overall situation.”
The BIDA chairman also said, “No investment proposal was logged in April and May due to lockdown. Some 19 investment proposals were registered in June and July. The country will be flooded with investment if all the investment proposals are translated into reality. In reality, not even one-third of the FDI promises come to the country.”
“We are working on promotional works to attract investors from Japan and Singapore,” Sirajul Islam added.
Experts blamed the Competitive Policy Support for the FDI fizzling out in comparison with Vietnam, Indonesia, India and other countries.
Executive Director of Policy Research Institute, Ahasan H Monsur said, because of coronavirus pandemic, many foreign companies are leaving China and we had the chance to grab the opportunity but failed.
He said, “because of geo-political issues, Bangladesh has immense prospect of investment as companies are shifting their industries from China and Japan centring tariff issues. India and Vietnam start to get those investments but we (Bangladesh) received nothing yet.”
Good governance coupled with competitive policy support still remain a stumbling block in drawing FDI in the country said, Ahasan H Monsur.
BIDA data showed a worrying declining trend in FDI in the country as in 2019 FDI was $160 crore and in 2018 it was $361 crore but in the first quarter of the current year, FDI stood at $58.21 crore. If this downward trend continues, FDI could be less than $200 crore.
sh/wi
