Foreign Direct Investment in Bangladesh: Prospects and Challenges

Abstract

Foreign Direct Investment (FDI) plays a vital role in developing country all over the world. It is an   part of the industrial development, economic transition, business liberalization and macro economic growth story in Bangladesh over the last decade.FDI plays a dominant role in the economy of Bangladesh through accelerating Gross Domestic Product (GDP), export and domestic investment. So it is vital for a developing country like Bangladesh to carry out effective measures in protecting the prospective foreign investors so that they can get a congenial atmosphere to invest their capital.The present scenario of FDI in Bangladesh  is not still satisfactory enough, because of some recognizing barriers but Bangladesh has some competitive advantages also i.e., that are abundant natural resources, human recourses, cheap labor forces, sectors for  prospective investment are textile, frozen foods, leather, agro-based industries and information  technology, a stable political atmosphere, monetary and  fiscal policy, improvement of infrastructure and long term strategic  planning to stimulate FDI might be  able to make  the  condition favorable  to attract foreign investment in Bangladesh. This paper recommends some guidelines that can be used to foreign investment in Bangladesh. This paper also investigates the state of the business environment in Bangladesh, identifies determinants affecting the FDI and the benefit that the country may derive from it.

Keywords: FDI, GDP, prospects, and problem of FDI.