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Bangladesh’s green-field FDI drops 20.46%

Bangladesh has been performed as the third-worst country in the world in terms of attracting green-field Foreign Direct Investment (FDI), which fell 20.46%, according to a global ranking Index in 2020.

The Bangladesh Bank showed the gross FDI in April-June was US$742 million, which was $803 million in January-March.

Component-wise, FDI stock amounted to $18.7 billion at the end of June 2020. Of the total stock, equity capital is $12.6 billion, reinvested earnings $3.2 billion and intra-company loans $2.9.

Bangladesh-green-field-FDI-drops-2020
Figure: Bangladesh scored 0.31 which got 18 green-field FDI projects in 2020, according to the ‘Greenfield Performance Index-2020’.

Additionally, here foreign investors come for the construction of new production facilities, these projects can include the building of new distribution hubs, offices and living quarters, according to the Bureau of Economic Analysis.

In the index, Bangladesh scored 0.31 which got 18 green-field FDI projects in 2020, according to the ‘Greenfield Performance Index-2020’. A score of 1.0 indicates a country’s share in global inward green-field FDI matches its relative share of global GDP. A score greater than 1.0 indicates a larger share than indicated by its GDP and a score of less than 1.0 indicates a smaller share.

Bangladesh has been performed as the third-worst country in the world in terms of attracting green-field Foreign Direct Investment (FDI)

The 10 least-performing nations in the index are Japan, China, Bangladesh, Iraq, South Korea, Norway, Pakistan, the United States, Italy, and Ecuador.

Japan and China ranked as the lowest-performing countries in terms of the size of their economies, and also for their typical hard and soft barriers to foreign investment.

On the other side, this year African country Togo ranked the highest in the list of best-performers in attracting Greenfield Investment.

Rwanda, Costa Rica, Mozambique, Serbia, Lithonia, Senegal, Zimbabwe, Georgia, and Singapore also made it to the list of top performers.

Bangladesh is attracting much less FDI in proportion to the size of its economy, according to the FDI Intelligence report.

Of the world’s 10 largest economies, five had an index score above 1 – the UK (2.51), France (1.4), Germany (1.3), India (1.21), and Canada (1.08).

The global outlook has revised 101 locations in 2020 while preparing the Greenfield Performance Index. Of them, 75 had an index score greater than 1.0, while 26 had a score of 1.0 or less.

The Greenfield Performance Index uses a methodology devised by Unctad for overall FDI and applies it to only greenfield FDI – excluding mergers and acquisitions, intra-company loans, and other forms of cross-border investment.

To be included in the index, a country must have received at least 10 Greenfield FDI projects in 2019.

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