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FOREIGN DIRECT

INVESTMENT: A
SCENARIO OF
BANGLADESH
GROUP MEMBERS
Name ID
Monija Khatun 17-001
Sanzida Begum 17-002
Mst. Samsunnaher Begum 17-003
Shatabdi Chowdhury 17-024
Erfanul Alam Siddiquee 17-056
SAMSUNNAHER BEGUM
ID- 17-003
FDI AND ITS TYPE
FDI is an international
financial flow with the
intention of controlling or
participating in the
management of an enterprise
in a foreign country.

INWARD FOREIGN
DIRECT INVESTMENT
1
OUTWARD FOREIGN
DIRECT INVESTMENT
2
IMPORTANCE OF FDI
ADVANCED TECHNOLOGY AND
ORGANIZATIONAL FORMS.
TRIGGERING TECHNOLOGICAL
AND OTHER SPILLOVERS
ASSISTING HUMAN CAPITAL
FORMATION
INTERNATIONAL TRADE
INTEGRATION
COMPETITIVE BUSINESS
ENVIRONMENT
ENTERPRISE DEVELOPMENT
IMPROVING ENVIRONMENTAL AND
SOCIAL CONDITIONS
CHEAP AND EFFICIENT LABOR IN
DEVELOPING COUNTRIES.
GOOD TRANSPORTATION AND
COMMUNICATION NETWORKS.
MACROECONOMIC AND
POLITICAL STABILITY.
LARGE DOMESTIC MARKET,
SUSTAINED RATES OF GROWTH
,ACCESS TO REGIONAL MARKETS.
EFFICIENT POLICY AND
REGULATORY
MAJOR DETERMINANTS OF
FDI INFLOW
ERFANUL ALAM SIDDIQUEE
ID: 17-056

DISADVANTAGES
Transfer of capital and technology
Promotes competition in the
domestic input market
Contribute to the corporate
revenue in the host country.
Human capital development of the
host country.
Reducing Unemployment
Increasing purchasing power .
Improvement in communication
system, transportation facilities,
and education.
Increase in GDP
Exploits the cheap labor
Use natural resources recklessly
No reinvest
Influencing power in government
decision
ADVANTAGES
PRESENT SCENARIO OF FDI IN
BANGLADESH
There is no regular trend in the
flow of FDI .The flow of FDI
increased in 2005 but
decreased in 2006 & 2007.It
again increased in 2008, 2009,
2011 & 2012 with a drop in
2010.
Last year, Bangladesh got the
most of its FDI from Malaysia,
Egypt, United Kingdom, South
Korea, Netherlands, Thailand
and Hong Kong.


0
200
400
600
800
1000
1200
1400
1600
2000 2002 2004 2006 2008 2010 2012
FDI Inflow in BD
Values are in Million
FDI IN AGRICULTURE SECTOR
In our country the most
preferable sector is
agriculture which is mostly
elaborated in the national
budget and others. Though
this sector is the most
preferable FDI contribution is
not very strong in this sector
0
5
10
15
20
25
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
FDI in Agriculture sector
Values are in Million
Our country has the natural
resources of Gas but we are poor
in power and petroleum
As a result we expect a bulky
contribution on this sector. So we
get 208.3 in 2005 out of 845.3 and
208.2 in 2006 out of 792.5. In
2006 it was 26.3% through the
FDI contribution.

0
50
100
150
200
250
300
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
FDI in power, Gas and Petroluem
FDI IN POWER, GAS AND
PETROLUEM
Values are in Millions
SANZIDA BEGUM
ID- 17-003

Traditionally the FDI contributions
devoted to this sector expecting
the huge profit and enlarge
business facilities. So every
country wants to contribute this
sector in case of FDI decision. In
Bangladesh this sector has the
magnitude contribution in total
FDI. In the year of 2005 this sector
contribution 219.3 out of 845.3
million $US and in the year of
2006 contribution is 104.9 out of
792.5 million $US. The
percentage contribution of 2006 is
13.2%

0
50
100
150
200
250
300
350
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
FDI in Manufacturing sector
FDI IN MANUFACTURING
SECTOR
Many foreign investors are now
interested to do business in
telecom sector in Bangladesh
which reveals that Bangladesh has
become a significant hub for
telecoms. It has been forecasted
that the average revenue from
telecoms sector will be Tk. 1500
crore a year.
In the year of 2006 the
contribution was 347 million $US
out of 792.5 million $US where
almost the full contribution
diverted to telecommunication
sector
0
100
200
300
400
500
600
700
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
FDI in Telecommunication
FDI IN TELECOMMUNICATION
SECTOR
COUNTRY WISE FDI
CONTRIBUTION
FDI INFLOW BY
COMPONENTS
EQUITY CAPITAL
REINVESTED EARNING
INTRA-COMPANY LOAN
LOCATION
NATURAL RESOURCES
HUMAN RESOURCES
SOCIAL STABILITY
LANGUAGE
MARKET ACCESS
GSP FACILITY

COMPETITIVE STRENGTH
OF BANGLADESH FOR
INVESTMENT


COMPOSITE TEXTILES AND LINKAGE INDUSTRIES
TELECOMMUNICATION
INFORMATION AND TELECOMMUNICATION
TECHNOLOGY (ICT)
ENERGY AND GAS SECTOR
INFRASTRUCTURE

PROSPECT OF FDI IN
BANGLADESH
MONIJA KHATUN
ID- 17-001

IN BANGLADESH

DEPENDENT VARIABLES
GDP
EXPORT
DOMESTIC INVESTMENT

INDEPENDENT VARIABLE
FDI INFLOW



THE RELATIONSHIP BETWEEN FDI
AND ECONOMIC GROWTH IN
BANGLADESH
Model Specification
Y1= a+b1x1
Y1 = Gross Domestic Product in million USD

Y2= a+b2x2
Y2 = Export in million USD

Y3 = a+b3x3
Y3 = Domestic Investment in million USD


IMPACT OF FDI ON GDP
The following regression equation is found,
Y1 = 56987 + 158.757 FDI
R=.757
R square = .57
IMPACT OF FDI ON EXPORT
The following regression equation is found,
Y2 = 934.8 + 15.7 FDII
R=0.811
R square = 0.658

IMPACT OF FDI ON DOMESTIC INVESTMENT
The following regression equation is found,
Y3 = 934.8 + 15.7 FDI
R=0.750
R square = 0.563

SHATABDI CHOWDHURY
ID- 17-024

Poorly developed socio-
economic and physical
infrastructure
Lack of skilled people at
various levels
Unreliable energy supply
Corruption
Administrative complexity and
non-transparency
Poor implementation of
existing policies
Low labor productivity
Frequent change in govt.
policies

Unhealthy trade union practices
Underdeveloped money and
capital markets and regulations
on these markets
Less improved seaport facilities
& malpractices at the port
Deteriorating law and order
situation
Political instability and
disturbances
High cost of doing business
Redtops and corruption in
getting infrastructural facilities
Unfriendly legal system

PROBLEMS OF FDI


BUREAUCRACY
POLITICAL UNREST
CORRUPTION
LACK OF GOOD GOVERNANCE
INEFFECTIVE JUDICIARY SYSTEM
LACK OF ADEQUATE INFORMATION
INFRASTRUCTURE
INFLATION
LACK OF GOOD IMAGE
INDECISION OF GOVERNMENT
LACK OF PROPER POLICY REGARDING FDI
OBSOLETE TECHNOLOGY

REASONS BEHIND FLUCTUATIONS IN
FDI


QUALITY OF BUREAUCRACY AND GOVERNANCE
IMPROVEMENT OF LAW AND ORDER SITUATION
IMPROVEMENT OF PORT SERVICES
PRIVATIZATION AND FURTHER REFORMS

RECOMMENDATIONS
THANK YOU

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