Bangladesh FDI drops 36 percent

DHAKA - Foreign direct investment (FDI) in Bangladesh plunged by 36 percent in 2009 and may see no dramatic improvement, the UN Conference on Trade and Development (UNCTAD) has said.

The UNCTAD blames it on the bureaucratic red tape that continues to act as the biggest barrier in attracting overseas funds.

The economy was also beset by energy shortage, driving away investors, S.A. Samad, executive chairman of the state-run Board of Investment (BoI), said here Thursday while releasing the UNCTAD report titled “Inflow of FDI in Bangladesh in 2009″.

According to the report, the FDI declined in Bangladesh by $386 million to reach $700.16 million in 2009 from $1.08 billon in 2008.

The BoI executive chairman said sluggish bureaucratic procedures were continuing to discourage overseas investors although the country offered attractive incentives to them.

The foreign investors complained about procedural complexities in starting business here, Samad said, adding that the investors hardly raise questions on the power and energy situation.

The working of the bureaucracy in Bangladesh is complex and difficult and should be simplified, the New Age newspaper quoted him as saying.

Since she took office in January 2009, Prime Minister Sheikh Hasina has been seeking foreign investors from India and has visited China, Russia, Malaysia, South Korea, Saudi Arabia and Kuwait in a hop of attracting more FDIs.

The Chinese have made promises, while an Indian delegation earlier this month discussed measures for mutual investment that would benefit Bangladesh and India’s northeastern region.