...Trends of Foreign Direct Investment in Bangladesh CHAPTER ONE Background of the Study 1. Introduction 1.1 Introduction Foreign Direct Investment (FDI) is considered as one of the vital ingredients for overall development process of a developing Bangladesh. country like Industrial development is an important pre-requisite growth country. of for a economic developing is Bangladesh basically a country of agrarian economy. For her economic development, industrial economy is imperative. So Bangladesh is gradually moving from agrarian economy to industrial economy. In the age of globalization, it has become a burning issue to exchange views, ideas, capital and human resources. Government of Bangladesh is trying to create a favorable investment environment through introducing economic policies, incentives for investors, promoting privatization and so on. Therefore, the contribution of FDI is necessary in the enhancement of a country‟s economic growth. Researchers have marked FDI as an important factor in accelerating economic success and wealth of a country as well as a door in creating jobs, facilitating economy, and creating more competitive environment and contributing productivity to the host country. 1 Trends of Foreign Direct Investment in Bangladesh In Bangladesh, FDI plays a significant role in GDP acceleration and economic growth (Mottaleb 2007). FDI has a mentionable role in the modernization of the Bangladesh economy for last two decades. It helps the country...
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...POTENTIALITY OF FDI INFLOW IN BANGLADESH 1. INTRODUCTION Foreign Direct Investment (FDI) is considered as one of the crucial ingredients for fostering economic development of a developing country. Countries that are lagging behind to attract FDI are formulating and implementing new policies for attracting more investment. Even compared to other South Asian countries, FDI inflow to Bangladesh has traditionally been lower. Foreign direct investment (FDI) is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. 2. TYPES OF FDI As a part of the national accounts of a country FDI refers to the net inflows of investment. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative). Inward FDI occurs when foreign capital is invested in local resources. The factors propelling the growth of inward FDI include...
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...Incentives and Facilities in Bangladesh Exemption and allowances according to ITO, 1984: Tax rebate: An assesse shall be entitled to a credit from the amount of tax payable on his total income of an amount equal to fifteen percent of the sums specified in paragraphs of the said Part B of ITO, 1984. The aggregate of the allowances admissible of the Sixth Schedule Part B shall not exceed- (a) One crore and fifty lakh taka (b) exceed thirty per cent of the total income of the assesse. Tax Exemption: 44. (4) The Government may, (a) Make such amendments by way of addition, omission, alteration or qualification (b) Make any exemption, reduction in rate in respect of tax in favor of any class of income or in regard to the whole or any part of the income of any class of persons. Exclusion from total income: • Any income derived from house property held under trust or other legal obligation wholly for religious or charitable purposes. • Any service charge derived from operation of micro credit by a non-government organization registered with NGO Affairs Bureau; • Any voluntary contributions received by a religious or charitable institution and applicable solely to religious or charitable purposes; • The income of a local government; • Any income accruing to, or derived by, a provident fund to which the Provident Fund Act, 1925 (XIX of 1925), applies; • Any income accruing to, or derived by, workers participation fund established under the Bangladesh Labor Act, 2006; •...
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...Country Paper Aid Flow to Bangladesh and the Question of Accountability of CSOs at National Level to the People They Serve By Shadnaz Khan* Bangladesh, like other poor and less developed countries, has been a regular receiver of foreign aid or external assistance in order to lessen the gap between savings and investment and to mitigate the balance of payment deficit. However, there has been serious debate over the issues such as low performance in aid-utilization, donors’ stringent and one-size-fits-all conditionalities and global aid politics that are believed to undermine the potential benefits that aid could have brought to the development scenario of the country. The apprehension over aid issues is felt in different countries around the world and also among the donors themselves. As a result, the idea of aid effectiveness has received increasing attention and importance in international discussions that generates hope that the international structure of aid would create sustainable development outcome for the poor countries. This paper is divided into two parts. In the first part, a general description of aid flows to Bangladesh has been presented and in the second part, an attempt has been made to assess the donor support models for CSOs in managing aid at country level and the scope for ensuring their accountability to their primary constituents, i.e., the people they serve in Bangladesh. A General Scenario of Aid flow to Bangladesh From 1972 to 30 June 2006...
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...Major Determinants and Hindrances of FDI inflow in Bangladesh: Perceptions and Experiences of Foreign Investors and Policy Makers An assignment on Major Determinants and Hindrances of FDI inflow in Bangladesh: Perceptions and Experiences of Foreign Investors and Policy Makers Submitted To: S. M. Zahidur Rahman Associate Professor Submitted By: Tasnuba Nowrin ID-090316 Fatema Khatun ID- 090349 KHULNA UNIVERSITY Business Administration Discipline BBA Program 4th Year, 1st Term Course Title: Financial Management and Institution Course No: FIN-4203 September 10, 2012 Summary on previous article Foreign Direct Investment (FDI) is considered as a crucial component for economic development of a developing country. Countries that are lagging behind to attract FDI are now formulating and implementing new policies for attracting more investment. The determinants which play as a driving force for attracting FDI are geographical location, cheap labour cost, and government attitude towards liberalization of the existing laws of the host country, skilled manpower, incentives for investors, and exemption of taxes etc. According to Bangladesh Board of Investment Handbook (2007) Bangladesh offers an attractive investment climate compared to other South Asian Economies. But among the emerging economies India and China are the desired choice for investment (Baskaran and Muchie, 2008). FDI is considered as an important tool for economic development in a developing country. If...
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...Bangladesh Economic Update Foreign Direct Investment (FDI) February 2012 Bangladesh Economic Update Volume 3, No. 2, February 2012 Acknowledgement: Bangladesh Economic Update is an output of the Economic Policy Unit of the Unnayan Onneshan, a multidisciplinary research centre based in Dhaka, Bangladesh. The report is prepared by a team, under the guidance of Rashed Al Mahmud Titumir and Palash Kanti Das. The team comprises Nibedita Roy and A. Z. M. Saleh. © Copyright: Unnayan Onneshan-The Innovators The content of this publication may be reproduced for non-commercial purposes with proper citation (please send output to the address mentioned below). Any other form of reproduction, storage in a retrieval system or transmission by any means for commercial purposes, requires permission from the Unnayan Onneshan-The Innovators. For orders and request please contact: Unnayan Onneshan - The Innovators 16/2, Indira Road, Farmgate Dhaka-1215, Bangladesh Tell: + (880-2) 8158274, 9110636 Fax: + (880-2) 8159135 E-mail: info@unnayan.org Web: www.unnayan.org Bangladesh Economic Update, February 2012 2|P a g e Bangladesh Economic Update Vol. 3, No. 2, February 2012 Economic Policy Unit Unnayan Onneshan 1. INTRODUCTION The current issue of the Bangladesh Economic Update focuses on the magnitude, dynamics, sectoral distribution, and countrywise sources of FDI inflow in the country. The flow of foreign direct investment is of utmost importance in the current backdrop of overall...
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...Answer: Foreign Direct Investment (FDI) has been an important part of the economic transition, business liberalization and macro-economic growth story in Bangladesh over the last decade. Since the last decade, there has been a considerable change in global flows of trade and finance including a surge in FDI. Despite being a recent phenomenon, several underlying factors have contributed to increasing the FDI inflow in Bangladesh, such as trade and exchange liberalization, current account convertibility, emphasis on private sector led development, liberalization of the investment regime, opening up of infrastructure and services to the private sector-both domestic and foreign, and above all the interest of foreign investors in energy and telecommunication sector. It is argued that more open trade policies are associated with the presence of foreign firms and economy-wide technological and productivity gains in developing countries like Bangladesh. There also exists evidence of a strong positive correlation between increasing share of FDI in GDP and diversification to high-technology exports in countries that have open trade regimes. Foreign Direct Investment (FDI) has played a key role in the modernization of the Bangladesh economy for the last 15 years. Bangladesh received FDI of $1.13 billion last year compared to $910 million in 2010. This increase of about 25% is higher than the average 23% worldwide growth of FDI. According to the 2012 World Investment Report (WIR)...
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...Investment: Impact on Sectoral Growth in Bangladesh Introduction Foreign direct investment (FDI) is a potent weapon of developing the Bangladesh economy and can play an important role in achieving the country’s socio-economic objectives including poverty reduction goals. In a capital-poor country like Bangladesh, FDI can emerge as a significant vehicle to build up physical capital, create employment opportunities, develop productive capacity, enhance skills of local labor through transfer of technology and managerial know-how, and help integrate the domestic economy with the global economy. This policy note provides an assessment of the current situation of FDI in Bangladesh and examines its impact on the country’s balance of payments. Foreign Direct Investment (FDI) is capital provided by a foreign direct investor, either directly or through other related enterprises, where the foreign investor is directly involved in the management of the enterprise. Until the1980s, most developing countries viewed FDI with great weariness. In recent years, however FDI restrictions have been significantly reduced. Most countries offer incentives to attract FDI, such as tax concessions, tax holidays, accelerated depreciation on plants and machinery, export subsidies and import entitlements etc. As a developing country, Bangladesh needs FDI for its ongoing development process. Since independence, Bangladesh is trying to be a suitable location for FDI. Special zones have been set up and lucrative...
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...Executive Summary Foreign Direct Investment is one of the vital force to boost up the economy. In this project report I would like to draw a current scenario of Foreign Direct Investment in Bangladesh. In this regard I present the most updated data, avoid the uncompleted data and use the best judgment at the time of presenting the data to better knowing the current trend about the Foreign Direct Investment in Bangladesh. I prepared an overview of “Foreign Direct Investment in Bangladesh” based on secondary data and information. For this specific purpose I collected data and information from various sources like published materials such as the Bangladesh Economic Review, Different articles of Board of Investment (BOI) and Bangladesh Export Processing Zone (BEPZA), Daily Statement of Affairs of different Internet based publication and other books on Foreign Direct Investment in Bangladesh and articles related to Foreign Direct Investment in Bangladesh. I furnished the full contents of the report in eight chapters. I concentrated on arranging and putting the data in such a way that the report progressively anchors to a desired destination of understanding. Introduction Part-1 Investment has acquired considerable emotive force in any country. It is viewed as beneficial on employment creator-as it brings about economic development. It can termed capital flowing from a firm or individual within the country or in one country to a business or businesses in another country involving...
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...Report on Foreign Direct Investment in Bangladesh Executive Summary Foreign Direct Investment is one of the vital force to boost up the economy. In this project report I would like to draw a current scenario of Foreign Direct Investment in Bangladesh. In this regard I present the most updated data, avoid the uncompleted data and use the best judgment at the time of presenting the data to better knowing the current trend about the Foreign Direct Investment in Bangladesh. I prepared an overview of “Foreign Direct Investment in Bangladesh” based on secondary data and information. For this specific purpose I collected data and information from various sources like published materials such as the Bangladesh Economic Review, Different articles of Board of Investment (BOI) and Bangladesh Export Processing Zone (BEPZA), Daily Statement of Affairs of different Internet based publication and other books on Foreign Direct Investment in Bangladesh and articles related to Foreign Direct Investment in Bangladesh. I furnished the full contents of the report in eight chapters. I concentrated on arranging and putting the data in such a way that the report progressively anchors to a desired destination of understanding. Introduction Part-1 Investment has acquired considerable emotive force in any country. It is viewed as beneficial on employment creator-as it brings about economic development. It can termed capital flowing from a firm or individual within the country or in one country...
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...different constraints, and to quite frequent conflicts resulting from different laws, cultures, and societies. The basic principles of business are still relevant, but their application, complexity, and intensity vary substantially. Area of study within this topic include differences in legal systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environment standards, local culture, corporate culture, foreign exchange market, tariffs, import and export regulations, trade agreements, climate education and many more topics. Each of these factors requires significant changes in how individual business units operate from one country to the next. Importance of this topic: Still Bangladesh is a developing country, we are...
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...PROJECT PROPOSAL On Foreign Direct Investment (FDI) PROBLEMS AND PROSPECTS OF FOREIGN DIRECT INVESTMENTS IN BANGLADESH Prepared For Md. Sujahangir Kobir Sarkar Lecturer Department of Agricultural Economics & Rural Development Faculty of Business Administration and Management Patuakhali Science and Technology University Prepared By Ashfaqur Rahman Level - II , Semester - II Roll : 039 , Reg. : 01567 Session : 2007-2008 Faculty of Business Administration & Management PATUAKHALI SCIENCE & TECHNNOLOGY UNIVERSITY Date of Submission: April 30, 2010 TABLE OF CONTENTS 1. Background Information of the Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. Statement of Project Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4 3. Objectives of the Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4. Justification of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5. Benefits of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....5 6. Methodology of the Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 7. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
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...business in Bangladesh over years and what will be the course of actions in order to achieve the proper “Investment climate in Bangladesh”. The report is prepared in order to get the knowledge and fulfill the basic requirement to complete the course titled as “Economic Conditions Analysis”. b. Background of the study: Economics is a sea of theories. These theories are the stairway to lift us to a stage from where we can get the entire idea of its different sectors. “Economic Conditions Analysis” is basically theory related course in addition to a mixing of practical incidents to compare theories and its applications. Obtaining theoretical knowledge is only a halfway to reach the target because implementation of theories is the ultimate goal of it. Being a very practical course “Economic Conditions Analysis” requires a large extent of implementation of its theories and procedures in the real life. To meet up this requirement I have prepared the report titled “Investment climate in Bangladesh”. c. Objectives: 1. Broad Objective: The broad objective is to examine investment climate in Bangladesh over years and what should be done for better performance in the upcoming years. 2. Specific Objectives: The specific objectives of preparing the report are as follows: i. To present historical data regarding industrial policy, obstacles to implement and what should be done to create proper investment climate in Bangladesh. ii....
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...in Bangladesh: Board of Investment of Bangladesh is the principal investment promotion agency engaged mainly in investment promotion, facilitation, and policy advocacy support for the policy makers. The Board of Investment Act 1989 (Act XII of 1989) has entrusted the Board of Investment with responsibility for inter alia "collection, compilation, analysis and dissemination of all kinds of industrial data and establishment of data bank for that purpose"- BOI has endeavored in to portray a brief on Foreign Investment registered from 1977 to 2010 for Joint venture investment and from 1990-2010 for the 100% foreign investment projects. Country wise foreign and joint venture investment during 2009-2010* Country | No. of Projects | Proposed Investment (US$ m) | Saudi Arabia | 3 | 478,652.17 | Australia | 4 | 2,036.23 | USA | 5 | 2,990.33 | Finland | 2 | 3,023.89 | India | 9 | 8,451.53 | South Korea | 12 | 33,768.91 | Malaysia | 3 | 3,056.52 | Netherlands | 5 | 8,544.76 | China | 12 | 21,000.36 | United Kingdom | 5 | 3,507.76 | Pakistan | 2 | 990.91 | Japan | 8 | 2,624.85 | Denmark | 1 | 1,217.39 | Sri Lanka | 2 | 646.23 | Canada | 2 | 1,017.23 | Taiwan | 1 | 502.97 | Singapore | 4 | 1,929.62 | Turkey | 1 | 150.94 | Greece | 1 | 156.81 | Italy | 2 | 1,039.95 | Hong Kong | 5 | 14,805.94 | Total | 89 | 590,114.91 | As a developing country, Bangladesh needs FDI for its ongoing development process. Since independence, Bangladesh is trying...
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...Breaking into new markets with new products Dr. Zaidi Sattar Policy Research Institute of Bangladesh Prepared as a Background paper for the Seventh Five Year Plan 1 Table of Contents List of Tables .............................................................................................................................ii List of Figures ...........................................................................................................................ii List of Boxes .............................................................................................................................iii Acronyms .................................................................................................................................. iv I. INTRODUCTION ................................................................................................................ 1 II. CHALLENGE OF EXPORT DIVERSIFICATION ....................................................... 1 III. EXPORT PERFORMANCE AND PROGRESS OR LACK IN DIVERSIFICATION .................................................................................................... 3 Exploiting Non-traditional Markets for Exports ............................................................................... 14 IV. INTERNATIONAL EXPERIENCE AND LESSONS LEARNT ............................... 18 V. CONSTRAINTS TO EXPORT DIVERSIFICATION IN BANGLADESH ............... 21 Key Constraints to Export Expansion and Diversification ...........
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