Bangladesh major FDI recipient in 2011 with US$ 1.1bn: UNCTAD
Dhaka, July 6 (UNB) – Bangladesh has emerged as one of the major recipients of Foreign direct investment (FDI) as its inflow to South Asia rose by 23 percent to US$39 billion in 2011 following a decline in 2009 and 2010, according to UNCTAD’s World Investment Report 2012.
The report, subtitled ‘Towards a New Generation of Investment Policies’ and released in Geneva on Thursday, showed Bangladesh received a record high of US$1.1 billion in FDI during the period.
The country received foreign direct investment (FDI) worth US$ 1.13 billion (US$ 1136.38 million) in 2011, the highest in its history, showing a 24.42 percent rise from the FDI received in 2010, Chairman of the Board of Investment (BoI) Dr SA Samad told UNB on June 21. "The FDI will exceed US$ 1.5 billion this year," he said.
Dr Samad said simplification of investment procedures and reducing the cost of doing business are the two basic reasons behind the increased FDI inflow into the country.
The actual FDI inflow was US$ 913.32 million in 2010 against US$ 1136.38 million received in 2011, according to the BoI officials.
The FDI inflow mostly comprises fresh equity amounting to US$ 431.85 million while US$ 489.63 million came from reinvested earnings. The major sectors that attracted FDI include textile (US$ 272.04 million), banking (US$ 249.37 million), power, gas and petroleum (US$ 238.21), telecommunications (US$ 180.99) million and cement (US$ 51.65 million).
The countries that invested substantially in 2011 include Egypt (US$ 152.30 million), the USA (US$ 117.74 million), the Netherlands (US$ 116.75), the UK (US$ 116.32 million), South Korea (US$ 113.06 million), Hong Kong (104.84 million), Japan (US$ 46.55 million), Sri Lanka (US$ 31.58 million), India (US$ 25.74 million) and Norway (US$ 24.26 million).
The recovery took place mainly as a result of the good performance of India – which is the largest FDI recipient in South Asia and accounts for more than four fifths of total FDI inflows to the region, the report said.
FDI inflow to that country (India) alone reached US$32 billion in 2011, the UNCTAD (United Nations Conference on Trade and Development) said in its report.
The inflows to the Islamic Republic of Iran and to Pakistan, the second- and third-largest FDI recipients, amounted to US$4.2 billion and US$1.3 billion, respectively.
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Countries in the region face different challenges, such as political risks and obstacles to FDI, which need to be tackled to build an attractive investment climate, the report says.
Nevertheless, recent developments have highlighted new opportunities. For example, the political relationship between India and Pakistan, the two major economies on the subcontinent, has been moving towards greater engagement.
In Afghanistan, significant FDI has been flowing into extractive industries, despite the country’s continuing internal conflict.
In 2011, about 145 cross-border mergers and acquisitions (M&As) and 1,045 greenfield FDI projects – that is, ground-up investments in new ventures – by foreign firms were recorded in South Asia.
Cross-border M&As rose by 131 per cent in value, and the total reached $13 billion in 2011, surpassing the previous record set in 2008. This significant increase was driven mainly by large transactions in extractive industries.
After three years’ decline, outbound FDI from the region recovered as well. In 2011, FDI outflows from South Asia rose by 12 per cent to $15.2 billion. Outflows from India, the region’s dominant source of FDI, increased to $14.8 billion (see figure 1).
Though cross-border M&As slid across all three sectors – extractive industries, manufacturing and services – the drop was compensated largely by a rise in overseas greenfield projects, particularly in extractive industries, metal and metal products, and business services.
FDI growth seems to be keeping its momentum in 2012.
As economic growth in India has slowed, however, concerns have risen about short-term prospects for FDI inflows to South Asia, the World Investment Report says.
The global economic situation has created further uncertainties. Whether countries in the region can overcome old challenges and grasp new opportunities will depend to a large extent on governments’ efforts to further open up their economies and deepen regional economic integration, the report contends.
The report, subtitled ‘Towards a New Generation of Investment Policies’ and released in Geneva on Thursday, showed Bangladesh received a record high of US$1.1 billion in FDI during the period.
The country received foreign direct investment (FDI) worth US$ 1.13 billion (US$ 1136.38 million) in 2011, the highest in its history, showing a 24.42 percent rise from the FDI received in 2010, Chairman of the Board of Investment (BoI) Dr SA Samad told UNB on June 21. "The FDI will exceed US$ 1.5 billion this year," he said.
Dr Samad said simplification of investment procedures and reducing the cost of doing business are the two basic reasons behind the increased FDI inflow into the country.
The actual FDI inflow was US$ 913.32 million in 2010 against US$ 1136.38 million received in 2011, according to the BoI officials.
The FDI inflow mostly comprises fresh equity amounting to US$ 431.85 million while US$ 489.63 million came from reinvested earnings. The major sectors that attracted FDI include textile (US$ 272.04 million), banking (US$ 249.37 million), power, gas and petroleum (US$ 238.21), telecommunications (US$ 180.99) million and cement (US$ 51.65 million).
The countries that invested substantially in 2011 include Egypt (US$ 152.30 million), the USA (US$ 117.74 million), the Netherlands (US$ 116.75), the UK (US$ 116.32 million), South Korea (US$ 113.06 million), Hong Kong (104.84 million), Japan (US$ 46.55 million), Sri Lanka (US$ 31.58 million), India (US$ 25.74 million) and Norway (US$ 24.26 million).
The recovery took place mainly as a result of the good performance of India – which is the largest FDI recipient in South Asia and accounts for more than four fifths of total FDI inflows to the region, the report said.
FDI inflow to that country (India) alone reached US$32 billion in 2011, the UNCTAD (United Nations Conference on Trade and Development) said in its report.
The inflows to the Islamic Republic of Iran and to Pakistan, the second- and third-largest FDI recipients, amounted to US$4.2 billion and US$1.3 billion, respectively.
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Countries in the region face different challenges, such as political risks and obstacles to FDI, which need to be tackled to build an attractive investment climate, the report says.
Nevertheless, recent developments have highlighted new opportunities. For example, the political relationship between India and Pakistan, the two major economies on the subcontinent, has been moving towards greater engagement.
In Afghanistan, significant FDI has been flowing into extractive industries, despite the country’s continuing internal conflict.
In 2011, about 145 cross-border mergers and acquisitions (M&As) and 1,045 greenfield FDI projects – that is, ground-up investments in new ventures – by foreign firms were recorded in South Asia.
Cross-border M&As rose by 131 per cent in value, and the total reached $13 billion in 2011, surpassing the previous record set in 2008. This significant increase was driven mainly by large transactions in extractive industries.
After three years’ decline, outbound FDI from the region recovered as well. In 2011, FDI outflows from South Asia rose by 12 per cent to $15.2 billion. Outflows from India, the region’s dominant source of FDI, increased to $14.8 billion (see figure 1).
Though cross-border M&As slid across all three sectors – extractive industries, manufacturing and services – the drop was compensated largely by a rise in overseas greenfield projects, particularly in extractive industries, metal and metal products, and business services.
FDI growth seems to be keeping its momentum in 2012.
As economic growth in India has slowed, however, concerns have risen about short-term prospects for FDI inflows to South Asia, the World Investment Report says.
The global economic situation has created further uncertainties. Whether countries in the region can overcome old challenges and grasp new opportunities will depend to a large extent on governments’ efforts to further open up their economies and deepen regional economic integration, the report contends.
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