Foreign Direct Investment (FDI) in Bangladesh declined by 27 percent during 11 months of 2006-07 fiscal year (from July 2006 to June 2007) compared to a year earlier due to political instability and the failure to reach decisions on large-scale investments.
According to the Bangladesh Bank, in the 11 months from July 2006 to May of 2007, 495 million dollars of FDI flowed into the country against 675 million dollars in the same period of 2005-06 fiscal year.
The lack of urgency in dealing with investment proposals undermined the country's chances, according to the Bangladesh Institute of Development Studies (BIDS) which was quoted by local newspaper The Daily Star as saying.
"The government failed to negotiate with prospective foreign investors," Dr Zaid Bakht, BIDS research director said.
Bakht referred to power projects, many of which were attractive to foreign investors. However the government had failed to conclude the necessary negotiations.
Dr Debapriya Bhattacharya, Executive Director of Center for Policy Dialogue, a think tank of the country, also was quoted by the daily as saying the country had experienced serious political turmoil during the past 11 months and this was the main reason behind the negative growth of FDI.
He said since October 2006 the country had experienced three different governments leading to a discontinuity in dealing with investment proposals.
Moreover, foreign investors have been reluctant to push projects due to a fear that decisions may be reversed, he added.