Dhaka, Bangladesh (BBN)-Bangladesh is expecting more than $2 billion in foreign direct investment (FDI) in 2014 as the political climate has improved since last year.

Construction of specialised economic zones and the auctioning off of offshore gas blocks are likely to boost FDI this year.

"Chances of foreign companies coming in to explore gas in the offshore blocks at the Bay of Bengal are higher" because of a recent verdict clearing maritime disputes for Bangladesh, Badrul Imam, professor of geology at the University of Dhaka, tells Monitor Global Outlook.

Recent deals with China for a 3.8-mile Padma Bridge, an industrial zone for ready-made garments with Chinese investment, as well as a specialised economic zone will be among key investments, the report added.

"If law and order and the political environment remain stable we should get $2-$2.5 billion FDI in 2014," Nabhash Chandra Mandal, additional secretary at Bangladesh's Board of Investment, tells MGO.

The South Asian country earned $1.7 billion in FDI in 2013, according to the latest data by the central bank of Bangladesh.

The World Investment Report released by the United Nations Conference on Trade and Development on June 24 stated the country's FDI at $1.6 billion in 2013 based on provisional figures, says Mohammed Akhtaruzzaman, economic advisor of Bangladesh Bank.

The central bank's data shows transport and storage received the highest amount of FDI at $527.09 million, followed by telecommunication $525.29 million, readymade garments $412.43 million and banking $268.53 million.

To attract investment Bangladesh has extended its tax holiday for new investors from 2015 to 2019 and instituted tax rebates up to 20 percent for industries setting up in least-developed areas for 10 years from the date of commencing operations.

The government has also reduced the corporate income tax from 37.5 percent to 35 percent.

Bangladesh's FDI target for 2014 is within its average growth rate. The incentives will fall short of attracting a higher FDI target because of some inherent disincentives, such as a slow-paced bureaucracy, shortages of energy sources, inconsistent policy implementation, and cumbersome customs processing, says Jamil Osman, executive director of Foreign Investors' Chamber of Commerce and Industry Bangladesh.

BBN/ANS-16July14-7:30pm (BST)