Bangladesh among nations at bottom in greenfield FDI index

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Bangladesh has been ranked the 3rd worst-performing country on earth in conditions of attracting green-field foreign direct investment (FDI), according to a worldwide ranking.

"Greenfield" investment is a kind of FDI when a parent company creates a subsidiary in a different country, building its procedures from the bottom up.

As well as the construction of new production facilities, these projects can include the building of new distribution hubs, offices and living quarters.

Bangladesh has scored 0.31 and it has 18 green-field FDI projects by 2020, according to the 'Greenfield Performance Index-2020'.

A score of just one 1.0 indicates a country's share in global inward green-field FDI matches its relative share of global GDP. A score higher than 1.0 indicates a more substantial share than indicated by its GDP and a score of less than 1.0 indicates a smaller share.

"Bangladesh is attracting much less FDI compared to the size of the economy [Bangladesh]," the report, a publication of the FDI Intelligence said.

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

Japan and China are poor performers in the index as they stick out as the lowest-performing countries, given how big is their economies, and also for their typical hard and soft barriers to foreign investment.

Alternatively, African country Togo topped the set of best-performing nations in attracting such FDI.

The other best performers are: Rwanda, Costa Rica, Mozambique, Serbia, Lithonia, Senegal, Zimbabwe, Georgia and Singapore.

Of the world's 10 major economies, five had an index score above 1.0--the UK (2.5), France (1.4), Germany (1.3), India (1.2) and Canada (1.08).

The global outlook has analysed 101 spots in 2020 while preparing the Greenfield Performance Index. Of these, 75 had an index score higher than 1.0, while 26 had a score of 1 1.0 or less.

The Greenfield Performance Index uses a methodology devised by Unctad for overall FDI, and applies it to only green-filed FDI, excluding M&A, intra-company loans and other varieties of cross-border investment.

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

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

Source: https://thefinancialexpress.com.bd

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