The New Nation - Internet Edition

THE value of local and foreign investment proposals submitted to the Board of Investment fell to an alarming low in the first quarter of the current fiscal year, continuing the declining trend prevalent in the previous six months, according to a media report quoting official figures. Foreign direct investment proposals dipped to a meagre $16.82 million in the July-September period of 2007-2008 from $ 1.17 billion in the corresponding period of the previous fiscal year marking a decline by 98.56 per cent. The first quarter of the 2007-2008 fiscal witnessed domestic investment proposals decreasing to Tk 2,539.79 crore, a 68.7 per cent fall against Tk 8,113.32 crore worth of investment proposals registered during the same period of 2006-2007. Import of capital machinery - which is considered a strong criterion of real investment - also declined by 25 per cent in the first quarter of the current fiscal year.

As reported in the nine months of the 2007 calendar year, foreign investment proposals in terms of value dropped to $ 214.025 million from $ 1.43 billion during the same period in 2006. The local investment proposals declined to Tk 9,222.1 crore between January -September 2007 from Tk 15,646.74 crore during the same period last year. The BOI, which has recently been running without an executive chairman at its helm, expects the investment proposals to increase when the figures of the later months of the gone-by-year becomes available. Government officials are optimistic as they say that the latest measures of the present interim administration start creating confidence in the business sector, investment will regain momentum as they try to attribute the recent decline in registration of investment proposals to stringent measures in the regulatory regime.

The BOI, according to the media report, received foreign investment proposals worth $7.61 million in January 2007, $ 41.71 million in February, $ 27.95 million in March, $92.2 million in April, $13.73 million in May, $14 million in June, $2.60 million in July, $12.16 million in August and $ 2.04 million in September 2007. Data based on actual inflow of foreign investment showed that Bangladesh attracted $ 790 million in FDI in 2006, lower than $845 million worth of FDI in 2005, which was again up from 460 million in 2004. The investment proposals were worth Tk 1,092 crore in January 2007. The decline in value of local investment in the last six months reversed the increasing trend of the past ten years.

Local entrepreneurs registered with the BOI proposals worth Tk 4,745.7 crore in the 1996-97 fiscal year, Tk 6,621.0 crore in 1990-2000, Tk 8,806.6 crore in 2001-2002, Tk. 13,546.1 crore in 2003-2004 and Tk 18,370.3 crore in 2005-2006.

The foreign investment curve with the falling trend is rather alarming. It's really difficult to attract foreign investors to a least developed country like Bangladesh easily in this highly competitive world of today. Efforts must be there to regain confidence of foreign investors to attract FDI and develop the country.