Foreign Direct Investment decline by 15%

Foreign Direct Investment (FDI) in the country has been steadily declining. In the first three months of the current fiscal year, investment decreased by 15%. Business owners fear that, without political stability, both domestic and foreign investments may decline further. According to them, creating a favorable business environment and building trust are now major challenges.

The country’s economy has been facing multiple crises for the past few years. After the interim government took charge in August, the country’s main export sector, the garment industry, was severely impacted. Production almost came to a halt due to attacks by criminals and worker unrest. The government is also concerned about the stagnation of investments in such circumstances.

Foreign investment has also been affected. Between July and September of the current fiscal year, net FDI stood at $300 million, compared to $353 million during the same period last year. This indicates a 15% decrease in foreign investment over the past three months.

Despite the national election in the previous fiscal year, net foreign investment was $1.47 billion, up from $1.39 billion in FY 2022-23. The highest FDI in the last decade was recorded in 2015, at $2.83 billion.

Jabed Akhtar, president of the Foreign Investors Chamber, stated, “No new investments are coming at the moment. Everyone is wondering what will happen in Bangladesh. Will a new government come? There will always be uncertainty. This situation will not change quickly.”

Even the 100 economic zones established to attract FDI are not receiving the desired investments. Business leaders believe that without expanding the services sector and ensuring infrastructure development, increasing foreign investment will be impossible.

Jabed Akhtar further explained, “In order to profit, foreign investors need to take their money out of the country. Therefore, improving the country’s credibility is crucial. The more credibility we build, the more they will trust in investing.”

Dr. Khondkar Azizul Islam, an executive member of BIDA, said, “The gas and electricity sectors are currently in a good position. Investors, both domestic and foreign, can come to our five investment zones.”

According to various research institutions, the country’s FDI is currently less than 1% of GDP, and it needs to be increased further to meet the goals of developed countries. Analysts emphasize the need to improve political stability and policy support to achieve this.