FDI records 540 million dollars in FY 2005 in Bangladesh

The actual inflow of the foreign direct investment (FDI) in Bangladesh in fiscal 2004-05 reached to a record 540 million US dollars, an up by 40.25 percent compared to the previous fiscal year.

"The rise is attributed to the increase of investment in telecommunications, energy and textile sectors during this period," Board of Investment Executive Chairman Mahmudur Rahman was quoted by The Independent as saying on Monday.

Besides, he said, foreign investors have found that Bangladesh has a sizable market now and a section of people have the capacity to spend a portion of their income in various sectors.

"Per capita income has also increased," he said giving the example of extent of cell phone use by the people.

Mahmudur Rahman said the textile sector received a stake of FDI following the Multi-fiber Agreement phase out era.

"The buyers are now consolidating in countries where they get products at a lower prices," said Mahmudur Rahman, "Bangladesh is one of such countries and the FDI is coming in the sector because of low production cost."

He said, "This is a threshold figure and now the foreign investors will start to come than before." He expected that the actual FDI will be 700 million US dollars in fiscal 2005-06 (July 2005-June 2006).

Dr. Khandaker Golam Moazzem, a research fellow of Center for Policy Dialogue (CPD), termed the increase of FDI as a good sign for the country's economy. "This would help augment the balance of payment capacity of the country," he was quoted by the daily as saying.

However, he said most of the FDI is coming in the capital-intensive sector. "As a labor surplus country, we need labor-intensive FDI." He suggested taking initiatives to attract more FDI in infrastructure, energy and power and export-oriented sectors.

Source: Xinhua