As per the UN Conference on Trade and Development or UNCTAD’s World Investment Report, foreign direct investment (FDI) in Bangladesh dropped 10.8 per cent to US $ 2.6 billion in 2020 — of the US $ 2.6 billion received in 2020, reinvested earnings by the already existing foreign companies accounted for the lion’s share (US $ 1.6 billion), which is an increase of 6.7 per cent from a year earlier, according to data from Bangladesh’s central bank, the Bangladesh Bank, which has been used by the UNCTAD for its report — and is unlikely to pick up in the near future as investment commitments remain lukewarm.
The UNCTAD report further added that in South Asia, FDI inflows rose 20 per cent to US $ 71 billion, thanks to India even as FDI in other South-Asian economies that rely on export-oriented garment manufacturing fell as orders from the EU and the US dropped substantially in 2020 even as the World Investment Report 2021 of the UNCTAD, released recently, maintained that FDI inflow in Sri Lanka and Bangladesh will take longer to recover as investment commitments in these countries remained weak while the announced greenfield investment projects in 2020 (which is an indication of FDI trends over the next few years) contracted 87 per cent in Bangladesh while in Sri Lanka, the announced greenfield investment projects in 2020 plummeted 96 per cent and, this contraction is due to weak investment interests in garment production, a major export industry and FDI recipient.
The report also underlined that investment in, and production of, garments suffered severely last year, with no sign of recovery as of early this year.