Bangladesh Foreign Direct Investment.docx

8/16/2019 Bangladesh Foreign Direct Investment.docx

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Assignment On

International Business

Topic: Current scenario of

“FDI” in Bangladesh

Course Title: International Business

Course Code: IBS-301

Submitted To:

Ms. Saya Sadia Sho!on

"ecturer De#artent of B$% sylhet international uni&ersity

Submitted By:

Mir'a $la

ID (o) *+0,

Section) B

Seester) 3rd ear *nd Seester

Submitted Date: *+-0+-*01/

Foreign Direct Investment (FDI):Foreign Direct In&estent - FDI 2he in&esting co#any ay ae its o&erseasin&estent in a nu4er of !ays - either 4y setting u# a su4sidiary or associate

co#any in the foreign country% 4y ac5uiring shares of an o&erseas co#any% or

through a erger or 6oint &enture. 2he acce#ted threshold for a foreign direct


2/24

in&estent relationshi#% as defined 4y the 78CD% is 109. 2hat is% the foreign

in&estor ust o!n at least 109 or ore of the &oting Stoc or ordinary shares of

the in&estee co#any. $n e:a#le of foreign direct in&estent !ould 4e an

$erican co#any taing a a6ority stae in a co#any in China. $nother

e:a#le !ould 4e a Canadian co#any setting u# a 6oint &enture to de&elo# a

ineral de#osit in Chile. ;In&esto#edia<

FDI is one of the ost i#ortant co#onents of international in&estent !hich

creates a long-ter relationshi# 4et!een the direct in&estor and the enter#rise.

Direct in&estent relates the transaction 4et!een the in&estor and the enter#rise.

FDI sho!s the transactions aong affiliated enter#rises% 4oth incor#orated and

unincor#orated. 2he co#onents of FDI are) 1. 85uity ca#ital% *. =ein&ested

earnings and 3. Intra-co#any loans.

85uity Ca#ital is the o!nershi# as !ell as the share #urchasing of an enter#rise 4ya foreign in&estor. =ein&ested earnings deonstrate that #ortion of earning of an

in&estor !hich is not distri4uted 4ac to hi. 2his eans the #rofits that are not

gi&en out as di&idends is e#t !ithin the fir.Intra-co#any loans include de4t

transactions and these transactions are regarding lending 4y the foreign #arent

co#any to its affiliates in the for of 4oth short and long-ter.

FDI i#lies that the in&estor e:erts a significant degree of influence on the

anageent of the enter#rise resident in the other econoy. FDI ay 4e

undertaen 4y indi&iduals as !ell as 4usiness entities. Flo!s of FDI co#rise

ca#ital #ro&ided 4y a foreign direct in&estor to an FDI enter#rise% or ca#italrecei&ed fro an FDI enter#rise 4y a foreign direct in&estor.

Introduction:

Bangladesh is a de&elo#ing country. >o&ernent of Bangladesh is looingfor!ard to 4e a iddle incoe country !ithin *0*1. In order to do that re5uires

huge in&estent. 2here e:ists a sa&ing in&estent ga#. In&esti4le fund ay coe

fro internal as !ell as e:ternal. 8:ternal sources ay foreign direct in&estent

and foreign aid. Foreign Direct In&estent is considered as one of the crucial

ingredients for fostering econoic de&elo#ent of de&elo#ing country. 2he ga#

4et!een actual flo! of total in&estent and target of >o&ernent articulated in the

ediu ter acroeconoic frae!or is on the rise and ight gro! shar#ly in

the u#coing years ?1@. FDI #lays an i#ortant #art in creating 6o4s 4ut also

considered as a source of incoe. But the strong arguent in fa&or of #u4lic


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su##ort to FDI is 4ased on the #ros#ect for no!ledge s#illo&ers. Indeed% FDI

a##ears as the !ay to get ca#ital !ithout assuing the ris lined to the de4t.

Des#ite the contro&ersies surrounding the 4enefits and cost of FDI a nu4er of

de&elo#ing. >o&ernents ha&e no! changed their #olicies fro restricting to!ards

#rooting foreign in&estent ?*@.2he gains fro FDI inflo!s are un5uestiona4le

as it contri4utes to econoic gro!th through an increase in #roducti&ity 4y

#ro&iding ne! in&estent% 4etter technologies and anagerial sills to the host

countries. 2he i#act of FDI on econoic gro!th de#ends on the degree of

ca#acity of the host country to use FDI efficiently. Siilarly% trade li4erali'ation

ay facilitate econoic gro!th through efficiency in #roduction 4y utili'ing the

a4undant factors of #roduction ore effecti&ely and a4sor4ing 4etter technologies

fro ad&anced countries. 7n the one hand% it ay har the gro!th #rocess

through &arious fors of acroeconoic insta4ility such as ters of trade

deterioration and 4alance of #ayents crisis. 2herefore% it is a challenge for

de&elo#ing countries to find out the a##ro#riate direction of the role of FDI andtrade li4erali'ation in econoic gro!th ?3@. FDI is considered as an i#ortant tool

for econoic de&elo#ent of de&elo#ing country. If the in&esting country is

!ealthier than the host country then ca#ital !ill flo! to the host country ?,@.

Factors Aecting Foreign Direct Investment:

Because Foreign Direct In&estent can significantly affect a countryAs econoy% itis i#ortant to identify and onitor the factors that influence it. 2he ost

influential factors are)

• Inflation.

• (ational incoe.

• >o&ernent restriction.

• 8:change rates.

Impact o Inlation:

If a countryAs inflation rate increases relati&e to the countries !ith !hich it in&ests%its ca#ital account !ould 4e e:#ected to decrease% other things 4eing e5ual.

Consuer and cor#orations in that country !ill ost liely #urchase ore goods


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or in&est ore in o&erseas ;due to high local inflation


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2he !orld has seen a s#ectacular !a&e of glo4al cor#orate acti&ity #articularlyduring the second half of the last decade. 2his has 4een facilitated 4y ad&ances

ade in the inforation technology. 2his trend% strengthened !ith the direction

to!ard 4order less-econoies% is dra!ing ore and ore 2(Cs;2rans national

cor#oration< into the glo4al o#eration.FDI is no longer only a strategic o#tion of cor#orations% it also #lays a ey role in the national econoic de&elo#ent

strategies. arious countries are atte#ting to attract foreign in&estors through a

&ariety of easures% i.e. li4erali'ation of in&estent en&ironent% fiscal refors

and a #acage of incenti&e offers. FDI can transfor a countryAs econoic

scenario !ithin shortest #ossi4le tie. It is not erely access to fund% 4ut also

#ro&ide transfer of technical no!-ho! and anageent e:#ertise. It is also a

sta4ili'ing factor in any econoy% 4ecause once 2(Cs ha&e ade an asset-4ased

direct in&estent% they cannot si#ly #ull out o&ernight lie in the case of

#ortfolio in&estent. (orally the 4enefits accrua4le fro FDI are inclusi&e of

;a< 2ransfer of technology to indi&idual firs and technological s#ill-o&er to the

!ider econoy%

;4< Increased #roducti&e efficiency due to co#etition fro ultinational

su4sidiaries

;c< I#ro&eent in the 5uality of the factors of #roduction including anageent

in other firs% not 6ust the host fir%

;d< Benefits to the 4alance of #ayents through inflo! of in&estent funds%

;e) Increase in e:#orts

;f< Increase in sa&ings and in&estent and

;g< Faster gro!th and e#loyent.

2hus% foreign direct in&estent is &ie!ed as a a6or stiulus to econoic gro!th

in de&elo#ing countries. Its a4ility to deal !ith t!o a6or o4stacles% naely%

shortages of financial resources and technology and sills% has ade it the centre of attention for #olicy-aers in lo!-incoe countries in #articular.


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The major incentives for foreign

direct investment in Bangladesh

are:

a. Projection of Foreign investment from nationalization andexpropriation

b. Abolition of ceiling on investment and equity share-holding by

foreigners.

c. Tax holiday beteen ! " #$ years poer generating

companies. d. Accelerated depreciation in lieu of tax holiday on certain

simple conditions.

e. %oncessionary duty and &AT on capital machinery and spares.

f. 'ationalization of import duties and taxes.

g. (ix month multiple visa for prospective investors h. %itizenship

by investing )(* !$$+$$$ or transferring )(* #+$$$+$$$.

,. Permanent relationship by investing )(* !+$$$. j. Tax exemption on capital gains under certain simple conditions.

. /onded arehouse and bac to bac 01% for exporting

industries.

l. Avoidance of double taxation ith certain countries.

m. Facilities for repatriation of capital+ pro2t+ royalty+ technical feeetc.

n. Tax exemption on royalty+ technical no-ho and expatriates3salary

o. Protection of intellectual property rights

p. Taa convertibility in current account


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q. Treating reinvestment of repairable dividend as neinvestment.

Current Situation:

Banglades& Foreign Direct Investment '''*+ , Data ,

C&art , Calendar

Foreign Direct In&estent in Bangladesh increased 4y 100 ESD Million in *01+fiscal year. Foreign Direct In&estent in Bangladesh a&eraged 1/.0 ESD

Million fro *00* until *01+% reaching an all tie high of 1*/ ESD Million in

*013 and a record lo! of */ ESD Million in *00,. Foreign Direct In&estent in

Bangladesh is re#orted 4y the Bangladesh Ban.


8/24

Actual -revious .ig&est /o0est Dates 1nit Fre2uency

100.00 1,3*.00 1*/.00 */.00 *00* - *01+ ESD Million early

2his #age #ro&ides - Bangladesh Foreign Direct In&estent - actual &alues%historical data% forecast% chart% statistics% econoic calendar and ne!s. Bangladesh

Foreign Direct In&estent - actual data% historical chart and calendar of releases -

!as last u#dated on May of *01/.

Banglades& Trade /ast -revious .ig&est /o0est 1nit

Balance of 2rade -,G.1* -/3.G* 0.00 -1*G.,0 BD2 Billion ?H@

8:#orts 13.0+ *0/.0* *11. 0.0+ BD2 Billion ?H@

I#orts *,1.1 */.G+ *G./ 0.+ BD2 Billion ?H@

Current $ccount ,+/.00 1/,,.00 1/,,.00 -1/3G.00 ESD Million ?H@

Current $ccount to >D 0.G0 0.,0 3.0 -,.,0 #ercent ?H@

2ers of 2rade G+.G G+.G 10,.0 G0.01 Inde: oints ?H@

Ca#ital Flo!s 0. G. /.+0 -1*.* BD2 Billion ?H@

=eittances 1*G+.+ 113/.*/ 1,1.3/ 100+.G0 ESD Million ?H@

>old =eser&es 13.G 13.G 13.G 3.* 2ones ?H@

Foreign Direct In&estent 100.00 1,3*.00 1*/.00 */.00 ESD Million ?H@

8:ternal De4t *3.+0 *,.,0 *,.,0 1/.1 ESD Billion ?H@ Crude 7il roduction ,.00 ,.00 /.00 1.10 BB"JDJ1K ?H@

2erroris Inde: +.* +., +.* ,.10 ?H@

/angladesh 4 5conomic ,ndicators

http://www.tradingeconomics.com/bangladesh/balance-of-tradehttp://www.tradingeconomics.com/bangladesh/balance-of-tradehttp://www.tradingeconomics.com/bangladesh/balance-of-tradehttp://www.tradingeconomics.com/bangladesh/exportshttp://www.tradingeconomics.com/bangladesh/exportshttp://www.tradingeconomics.com/bangladesh/exportshttp://www.tradingeconomics.com/bangladesh/importshttp://www.tradingeconomics.com/bangladesh/importshttp://www.tradingeconomics.com/bangladesh/importshttp://www.tradingeconomics.com/bangladesh/current-accounthttp://www.tradingeconomics.com/bangladesh/current-accounthttp://www.tradingeconomics.com/bangladesh/current-accounthttp://www.tradingeconomics.com/bangladesh/current-account-to-gdphttp://www.tradingeconomics.com/bangladesh/current-account-to-gdphttp://www.tradingeconomics.com/bangladesh/current-account-to-gdphttp://www.tradingeconomics.com/bangladesh/terms-of-tradehttp://www.tradingeconomics.com/bangladesh/terms-of-tradehttp://www.tradingeconomics.com/bangladesh/terms-of-tradehttp://www.tradingeconomics.com/bangladesh/capital-flowshttp://www.tradingeconomics.com/bangladesh/capital-flowshttp://www.tradingeconomics.com/bangladesh/capital-flowshttp://www.tradingeconomics.com/bangladesh/remittanceshttp://www.tradingeconomics.com/bangladesh/remittanceshttp://www.tradingeconomics.com/bangladesh/remittanceshttp://www.tradingeconomics.com/bangladesh/gold-reserveshttp://www.tradingeconomics.com/bangladesh/gold-reserveshttp://www.tradingeconomics.com/bangladesh/gold-reserveshttp://www.tradingeconomics.com/bangladesh/foreign-direct-investmenthttp://www.tradingeconomics.com/bangladesh/foreign-direct-investmenthttp://www.tradingeconomics.com/bangladesh/foreign-direct-investmenthttp://www.tradingeconomics.com/bangladesh/external-debthttp://www.tradingeconomics.com/bangladesh/external-debthttp://www.tradingeconomics.com/bangladesh/external-debthttp://www.tradingeconomics.com/bangladesh/crude-oil-productionhttp://www.tradingeconomics.com/bangladesh/crude-oil-productionhttp://www.tradingeconomics.com/bangladesh/crude-oil-productionhttp://www.tradingeconomics.com/bangladesh/terrorism-indexhttp://www.tradingeconomics.com/bangladesh/terrorism-indexhttp://www.tradingeconomics.com/bangladesh/balance-of-tradehttp://www.tradingeconomics.com/bangladesh/exportshttp://www.tradingeconomics.com/bangladesh/exportshttp://www.tradingeconomics.com/bangladesh/importshttp://www.tradingeconomics.com/bangladesh/importshttp://www.tradingeconomics.com/bangladesh/current-accounthttp://www.tradingeconomics.com/bangladesh/current-accounthttp://www.tradingeconomics.com/bangladesh/current-account-to-gdphttp://www.tradingeconomics.com/bangladesh/current-account-to-gdphttp://www.tradingeconomics.com/bangladesh/terms-of-tradehttp://www.tradingeconomics.com/bangladesh/terms-of-tradehttp://www.tradingeconomics.com/bangladesh/capital-flowshttp://www.tradingeconomics.com/bangladesh/capital-flowshttp://www.tradingeconomics.com/bangladesh/remittanceshttp://www.tradingeconomics.com/bangladesh/remittanceshttp://www.tradingeconomics.com/bangladesh/gold-reserveshttp://www.tradingeconomics.com/bangladesh/gold-reserveshttp://www.tradingeconomics.com/bangladesh/foreign-direct-investmenthttp://www.tradingeconomics.com/bangladesh/foreign-direct-investmenthttp://www.tradingeconomics.com/bangladesh/external-debthttp://www.tradingeconomics.com/bangladesh/external-debthttp://www.tradingeconomics.com/bangladesh/crude-oil-productionhttp://www.tradingeconomics.com/bangladesh/crude-oil-productionhttp://www.tradingeconomics.com/bangladesh/terrorism-indexhttp://www.tradingeconomics.com/bangladesh/terrorism-indexhttp://www.tradingeconomics.com/bangladesh/balance-of-trade


9/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early

!nem"loymentRate 9.< 7 *ec1#9 9.! 9.< ;!.# =early

#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily

Balance of Trade -9:.#8 /*T /illion Feb1#6 -6onthly

Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy

(urrency :.69 >ay1#6 :.:! 9$.# ; :ay1#6 98! 8:8 ; :?#? *aily

GP LastReferen

ce

Previo

usRange

Freque

ncy

GP Growth Rate 6.!# 7 *ec1#! 6.#8 9.$: ; 6.6< =early

GP *nnual

Growth Rate .$! 7 *ec1#6 6.!! 9.$: ; .$! =early

GP#9 )(*/illion

*ec1#9 #!$ 9.< ; #9 =early

GP (onstant

Prices:89! /*T/illion

*ec1#! 9! 8


10/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

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Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

ncy


(onstruction /*T >illion ? #8!!illion

@un1#68!99:<#

##6#?# ;8?88:8#

=early

GP From &ining8::? /*T>illion

@un1#6 8


11/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

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ncy


Rate

-m"loyed Persons !9.# >illion *ec1#$ !6

.ages8!!</*T1>onth

*ec1#$ #9:! 68! ; 8!!< =early

.ages in

&anufacturing89< ,ndexPoints

*ec1$? 8$6 ##< ; 89< =early

Po"ulation #!: >illion *ec1#! #!6 !$.# ; #!: =early

Retirement *ge

&en!? *ec1#! !? ! ; !? =early

Retirement *ge.omen

!? *ec1#! !? ! ; !? =early

Prices LastReferen

ce

Previo

usRange

Freque

ncy

#n$ation Rate !.6# 7 Apr1#6 !.6! -$.$< ; #6 >onthly

http://www.tradingeconomics.com/bangladesh/unemployment-ratehttp://www.tradingeconomics.com/bangladesh/employed-personshttp://www.tradingeconomics.com/bangladesh/wageshttp://www.tradingeconomics.com/bangladesh/wages-in-manufacturinghttp://www.tradingeconomics.com/bangladesh/wages-in-manufacturinghttp://www.tradingeconomics.com/bangladesh/populationhttp://www.tradingeconomics.com/bangladesh/retirement-age-menhttp://www.tradingeconomics.com/bangladesh/retirement-age-menhttp://www.tradingeconomics.com/bangladesh/retirement-age-womenhttp://www.tradingeconomics.com/bangladesh/retirement-age-womenhttp://www.tradingeconomics.com/bangladesh/inflation-cpihttp://www.tradingeconomics.com/bangladesh/unemployment-ratehttp://www.tradingeconomics.com/bangladesh/employed-personshttp://www.tradingeconomics.com/bangladesh/wageshttp://www.tradingeconomics.com/bangladesh/wages-in-manufacturinghttp://www.tradingeconomics.com/bangladesh/wages-in-manufacturinghttp://www.tradingeconomics.com/bangladesh/populationhttp://www.tradingeconomics.com/bangladesh/retirement-age-menhttp://www.tradingeconomics.com/bangladesh/retirement-age-menhttp://www.tradingeconomics.com/bangladesh/retirement-age-womenhttp://www.tradingeconomics.com/bangladesh/retirement-age-womenhttp://www.tradingeconomics.com/bangladesh/inflation-cpi


12/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

ncy


(onsumer Price

#nde, (P#

88< ,ndex

Points Apr1#6 88< !#.?? ; 88< >onthly

GP e$ator #9 7 *ec1#! #9 #86 ; 889 =early

Producer Prices8#:$ ,ndexPoints

@un1$6 8$:8 #8onthly

-,"ort Prices#! ,ndexPoints

*ec1#9 #6< :.? ; #! =early

#m"ort Prices8$< ,ndexPoints

*ec1#9 #?$ :?.? ; 8$< =early

("i Trans"ortation

8$6 ,ndex

Points Apr1#6 8$6 #onthly

Food #n$ation


13/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

ncy


#nterest Rate 6.! 7 Apr1#6 .8! 9.! ; :.! *aily

#nter%an' Rate ar1#6 869$: 9# ; 8!:$ >onthly

Loans to Private

)ector!:?9 /*T/illion

Feb1#6 !:!< #!8 ; !:?9 >onthly

e"osit #nterest

Rate?.$: 7 *ec1#9 ##.#? 6.$9 ; #8.$! =early

http://www.tradingeconomics.com/bangladesh/interest-ratehttp://www.tradingeconomics.com/bangladesh/interbank-ratehttp://www.tradingeconomics.com/bangladesh/money-supply-m0http://www.tradingeconomics.com/bangladesh/money-supply-m1http://www.tradingeconomics.com/bangladesh/money-supply-m2http://www.tradingeconomics.com/bangladesh/money-supply-m3http://www.tradingeconomics.com/bangladesh/foreign-exchange-reserveshttp://www.tradingeconomics.com/bangladesh/foreign-exchange-reserveshttp://www.tradingeconomics.com/bangladesh/loans-to-private-sectorhttp://www.tradingeconomics.com/bangladesh/loans-to-private-sectorhttp://www.tradingeconomics.com/bangladesh/deposit-interest-ratehttp://www.tradingeconomics.com/bangladesh/deposit-interest-ratehttp://www.tradingeconomics.com/bangladesh/interest-ratehttp://www.tradingeconomics.com/bangladesh/interbank-ratehttp://www.tradingeconomics.com/bangladesh/money-supply-m0http://www.tradingeconomics.com/bangladesh/money-supply-m1http://www.tradingeconomics.com/bangladesh/money-supply-m2http://www.tradingeconomics.com/bangladesh/money-supply-m3http://www.tradingeconomics.com/bangladesh/foreign-exchange-reserveshttp://www.tradingeconomics.com/bangladesh/foreign-exchange-reserveshttp://www.tradingeconomics.com/bangladesh/loans-to-private-sectorhttp://www.tradingeconomics.com/bangladesh/loans-to-private-sectorhttp://www.tradingeconomics.com/bangladesh/deposit-interest-ratehttp://www.tradingeconomics.com/bangladesh/deposit-interest-rate


14/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

ncy


Trade Last

Referen

ce

Previo

us Range

Freque

ncy

Balance of Trade-9:.#8 /*T/illion

Feb1#6 -6onthly

-,"orts#?< /*T/illion

Feb1#6 8$6 $.$! ; 8#8 >onthly

#m"orts89# /*T/illion

Feb1#6 8$ $.! ; 8:: >onthly

(urrent *ccount9!6 )(*>illion

*ec1#! #699 -#6


15/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

ncy


Remittances

#8:6 )(*

>illion >ar1#6 ##onthly

Gold Reserves #ar1#6 #


16/24

Overview LastRefere

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Previo

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Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


Government e%t

to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

&ar'ets LastReferen

ce

Previo

usRange

Freque

ncy


GP LastReferen

ce

Previo

usRange

Freque

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Budget

Government

Budget 3alue$68< /*T/illion

*ec1#! -9#96 -9#96 ; $68


17/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


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to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

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GP LastReferen

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Previo

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(a"acity

!tili4ation !! 7 @un1$< !: 9: ; :onthly

Business

(on5dence?.

(om"etitiveness

#nde,


18/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


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to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

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Previo

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GP LastReferen

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Previo

usRange

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is"osa%le

Personal #ncome

!8


19/24

Overview LastRefere

nce

Previo

usRange

Frequen

cy

GP Growth Rate 6.!# 7 *ec1#! 6.#89.$: ;6.6<

=early


#n$ation Rate !.6# 7 Apr1#6 !.6!-$.$< ;#6

>onthly

#nterest Rate 6.! 7 Apr1#6 .8!9.! ;:.!

*aily


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to GP#: 7 *ec1#< #:.?

#: ;99.?

=early

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Ta, Rate

)ales Ta, Rate #! 7 *ec1#! #! #! ; #! =early

*dvantages 7(ontri%ution:

Foreign direct investment (FDI) is an in&estent in a 4usiness 4y an in&estor

fro another country for !hich the foreign in&estor has control o&er the co#any

#urchased. 2he Organi3ation o $conomic Cooperation and Development

(O$CD) defines control as o!ning 109 or ore of the 4usiness. Businesses that

ae foreign direct in&estents are often called multinational corporations

(4!Cs) or multinational enterprises (4!$s). $ M(8 ay ae a direct

http://www.tradingeconomics.com/bangladesh/personal-income-tax-ratehttp://www.tradingeconomics.com/bangladesh/sales-tax-ratehttp://www.tradingeconomics.com/bangladesh/personal-income-tax-ratehttp://www.tradingeconomics.com/bangladesh/sales-tax-rate


20/24

in&estent 4y creating a ne! foreign enter#rise% !hich is called a "reenield

investment% or 4y the ac5uisition of a foreign fir% either called an ac2uisition or

bro0n ield investment.

List of *dvantages of Foreign irect #nvestment:

*5 $conomic Development Stimulation:

Foreign direct in&estent can stiulate the target countryAs econoic

de&elo#ent% creating a ore conduci&e en&ironent for you as the in&estor and

4enefits for the local industry.

'5 $asy International Trade:

Coonly% a country has its o!n i#ort tariff% and this is one of the reasons !hy

trading !ith it is 5uite difficult. $lso% there are industries that usually re5uire their

#resence in the international arets to ensure their sales and goals !ill 4e

co#letely et. Lith FDI% all these !ill 4e ade easier.

65 $mployment and $conomic Boost:

Foreign direct in&estent creates ne! 6o4s% as in&estors 4uild ne! co#anies in

the target country% create ne! o##ortunities. 2his leads to an increase in incoe

and ore 4uying #o!er to the #eo#le% !hich in turn leads to an econoic 4oost.

75 Development o .uman Capital #esources:

One 4ig ad&antage 4rought a4out 4y FDI is the de&elo#ent of huan ca#ital

resources% !hich is also often understated as it is not iediately a##arent. uan

ca#ital is the co#etence and no!ledge of those a4le to #erfor la4or% ore

no!n to us as the !orforce. 2he attri4utes gained 4y training and sharing

e:#erience !ould increase the education and o&erall huan ca#ital of a country. Its

resource is not a tangi4le asset that is o!ned 4y co#anies% 4ut instead soething

that is on loan. Lith this in ind% a country !ith FDI can 4enefit greatly 4y

de&elo#ing its huan resources !hile aintaining o!nershi#.

85 Ta% Incentives:

-arent enter#rises !ould also #ro&ide foreign direct in&estent to get additional

e:#ertise% technology and #roducts. $s the foreign in&estor% you can recei&e ta:

incenti&es that !ill 4e highly useful in your selected field of 4usiness.

+5 #esource Transer:

Foreign direct in&estent !ill allo! resource transfer and other e:changes of


21/24

no!ledge% !here &arious countries are gi&en access to ne! technologies and

sills.

95 #educed Disparity Bet0een #evenues and Costs:

Foreign direct in&estent can reduce the dis#arity 4et!een re&enues and costs.Lith such% countries !ill 4e a4le to ae sure that #roduction costs !ill 4e the

sae and can 4e sold easily.

5 Increased -roductivity:

The facilities and e5ui#ent #ro&ided 4y foreign in&estors can increase a

!orforceAs #roducti&ity in the target country.

;5 Increment in Income:

$nother 4ig ad&antage of foreign direct in&estent is the increase of the target

countryAs incoe. Lith ore 6o4s and higher !ages% the national incoe norally

increases. $s a result% econoic gro!th is s#urred. 2ae note that larger

cor#orations !ould usually offer higher salary le&els than !hat you !ould

norally find in the target country% !hich can lead to increent in incoe.

List of isadvantages of Foreign irect #nvestment:

*5 .indrance to Domestic Investment:

As it focuses its resources else!here other than the in&estorAs hoe country%

foreign direct in&estent can soeties hinder doestic in&estent.

'5 #is< rom -olitical C&anges:

Because #olitical issues in other countries can instantly change% foreign direct

in&estent is &ery risy. lus% ost of the ris factors that you are going to

e:#erience are e:treely high.

65 !egative Inluence on $%c&ange #ates:

Foreign direct in&estents can occasionally affect e:change rates to the ad&antage

of one country and the detrient of another.

75 .ig&er Costs:

If you in&est in soe foreign countries% you ight notice that it is ore e:#ensi&e

than !hen you e:#ort goods. So% it is &ery i#erati&e to #re#are sufficient oney

to set u# your o#erations.


22/24

85 $conomic !on=iability:

Considering that foreign direct in&estents ay 4e ca#ital-intensi&e fro the #oint

of &ie! of the in&estor% it can soeties 4e &ery risy or econoically non-&ia4le.

+5 $%propriation:# ee4er that #olitical changes can also lead to e:#ro#riation% !hich is a scenario

!here the go&ernent !ill ha&e control o&er your #ro#erty and assets.

95 !egative Impact on t&e Country>s Investment:

The rules that go&ern foreign e:change rates and direct in&estents ight

negati&ely ha&e an i#act on the in&esting country. In&estent ay 4e 4anned in

soe foreign arets% !hich eans that it is i#ossi4le to #ursue an in&iting

o##ortunity.

5 4odernDay $conomic Colonialism:

4any third-!orld countries% or at least those !ith history of colonialis% !orry

that foreign direct in&estent !ould result in soe ind of odern day econoic

colonialis% !hich e:#oses host countries and lea&e the &ulnera4le to foreign

co#aniesA e:#loitations.

Pro%lems of F#:*lthough /angladesh is trying to be as friendly as possible to F*,+she is facing some problems regarding investment from foreign

sector. The F*, friendly policies of the government and a culture

of hospitality to foreigners are very much positive to elcome F*,in /angladesh. /ut it is a matter of concern that F*, records in the

country in terms of the number of projects implemented as

compared to those ocially registered is frustrating. Cnly 8 F*,projects ent into production in end of #??? and 8 ere in

process of implementation of the


23/24

during the year of #??6 - #??:+ hile the remaining 866 projects

languished only as the 2le-cases.

The problems that have restricted F*, potentials in the countryare as follos;

/ureaucratic interference. ,rregularities in processing papers. Cverlapping administrative procedures. Absence of a transparent system of formalities. %ontinuity and prevent timely implementation of strategic+

procedural+ and even routine duties. Frequent poer failures. Poor infrastructure support.

0abor unrest. Political unrest. 0ac of professional personnel. 0ac of commitment on the part of local investors. )nexpected delays in selecting projects in studying. Feasibility. Frequent changes in policies on import duties for ra

materials+ machinery and equipment etc.

Recommendations:There are many steps that can be taen in order to explorethe improvement of '>D sector in /angladesh and the

research shos that F*, is the best option to do so. The areaof the research is vast. There is alays change in the

scenario of the subject in accordance ith time. ,t is

recommended to do future research about F*, 2rmGsproductivity in the '>D sector in /angladesh+ 'esearch can

be made on the eHect of F*, in '>D sector and economic lifeof the investing enterprises+ 'esearch to spot suitable place

for the foreign companies ithin the country and pros andcons+ 'esearch on cost eHective policies to gain better

revenue from the F*, 2rms in the textiles and garments

sector in /angladesh.


24/24

(onclusion: This research studies the relationship beteen foreignequity and 2rm productivity of /angladeshi '>D sector.Firms productivity as measured by the total sales and

exports increase . The author shos that F*, 2rms havelarger sales and exports than the domestic 2rms in the same

industry and location. (o 2nally it has been found from this

research that F*, 2rms are more productive than the

domestic 2rms. Furthermore+ all scholarly articles+ casestudies and statistics discussed in this research suggests

that F*, 2rms are more productive than the domestic 2rmsand the domestic 2rms may bene2t from the productivity ofthe F*, 2rms in the '>D sector in /angladesh. The 2ndings

of this research support a more open F*, policy in

/angladesh garments and textiles sector. >ore F*, in the'>D sector in /angladesh ill bring much more economical

groth for the country and both of the investors and the

investing companies ill mae pro2table businesses

orldide. ,n addition+ if a domestic 2rm allos foreign

capital the infrastructure of the investng companies ill behigh standard as it has been found from this study that

foreign onership maes the domestic 2rms to improve theproduction+ or and safety and the quality of products.,n a conclusion+ the author tends to describe brieIy hat

information a reader can get and learn from this thesis. The

readers can no information about reliability and validity

that deals ith the authenticity of thesis and evaluation ofusefulness. There are some suggestions and future

researches also pointed out in the conclusion.

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