Dhaka, Bangladesh (BBN) – The inflow of foreign direct investment (FDI) fell by 10.2 per cent in the fiscal year (FY) 2013-14 because of political turmoil and inadequate supply of gas and power.
The inflow of FDI came down to US$1.55 billion in FY 14 from $1.73 billion in the previous fiscal, according to the central bank statistics.
“The FDI flow hampered seriously in the first half of the FY 14 because of confrontational political situation prevailed in the first six months of the last fiscal,” a senior official of the Bangladesh Bank (BB) explained.
He also said the inflow of FDI witnessed a rising trend following improvement of the country’s overall political situation after holding the parliament election on January 5 last.
Besides, lack of capacity in the public sector, bureaucratic tangles and natural disasters are often blamed as some of the major obstacles to investment in the country, according to the officials.

Inadequate basic infrastructure has also been impeding large FDI inflow in Bangladesh although it has ample opportunities to woo more foreign investors as there are cheap workforce available, they noted. ‘The shortage of gas and electricity also deterred the FDI inflows.”

State-run Bangladesh Oil, Gas and Mineral Corporation, known as Petrobangla, supplies more than 2,300 million cubic feet (mmcf) of natural gas a day against the demand of around 3,000 mmcf of gas, according to a senior Petrobangla official.

Bangladesh’s all power plants are currently generating around 6, 500 MW power against a peak demand of 8,000 MW, he said, adding that around 12 power plants are generating far less than their capacity due to inadequate gas supply.

BBN/SSR/AD-01Sept14-8:43 am (BST)