Attracting Foreign Direct Investment

Abstract

Reviews the main bottlenecks to overall investment in Bangladesh and then focuses on foreign direct investment (FDI) performance and the openness of Bangladesh to FDI, relying extensively on 2012 indicators from the World Bank's Investing Across Borders (IAB) initiative. Although Bangladesh remains one of the most open countries to foreign equity ownership, the IAB data find (1) gaps between policies and practice; (2) lengthy and discretionary administrative procedures; (3) weak dispute arbitration systems; and (4) poor access to land-related information. The United Nations Conference on Trade and Development's (UNCTAD's) 2013 Bangladesh Investment Policy Review examined the regulatory and legal framework needed to support a larger role for FDI in Bangladesh's economic development, in particular the need to examine FDI entry procedures, weaknesses in the general regime of regulations and operating conditions for business, and poor promotion of foreign investment in Bangladesh. Bangladesh has the potential to attract significantly higher levels of FDI.