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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH. CPD SEMINAR. on. FDI and Reflections from World Investment Report 2010. MASIH MALIK CHOWDHURY. Council Member & Chairman (CPDC)-ICAB. Dhaka 28 October 2010. Understanding FDI. Slide-1. FDI Major Role (?) In Global Business

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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH

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  1. THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH CPD SEMINAR on FDI and Reflections from World Investment Report 2010 MASIH MALIK CHOWDHURY Council Member & Chairman (CPDC)-ICAB Dhaka 28 October 2010

  2. Understanding FDI Slide-1 • FDI Major Role (?) In Global Business • Arguments For & Against FDI • FDI for Quick Pay Backs (Outflows) • FDI, CSR & Fanfare for People • FDI, BRIC and Argentina • FDI & Transfer Pricing

  3. Slide-2 FDI Types • Outward • Inward • Classified on Routing Basis • Vertical FDI

  4. Slide-3 FDI in Past & Near Future Global FDI in USD  FDI by M & A  Investments in High Tech Sectors- Complicated

  5. Slide-4 FDI for Going Global • Investment Decisions from Assessment of Internal Resources Competitiveness Market Analysis & Expectation Incentives for FDI Infrastructures etc Local Regulations Payback Time Profitability and Repatriation

  6. Slide-5 Studies on FDI • FDI Role- Not Substantiated • FDI, Account for mere 2% of Global GDP • Profit Repatriation by MNC exceed FDI Inflow • FDI in Form of High Tech as Equity • FDI for Transfer of Skill & Expertise • FDI is Partly Pro-cyclical FDI & Portfolio Inv. Equally Unreliable

  7. Slide-6 FDI & Employment • M & A of FDI hardly promote Employment • FDI in Machineries & Intellectual Property • FDI causes 60 – 70% Job Losses • FDI has Limitations, yet welcome • FDI for kleptocracies in governance misrouted to Swiss & Cypriot Bank A\C • Causes Asset Bubbles from black money

  8. Slide-7 World Investment Report 2010 1. Global Inflow in Billion USD 2. Global Outflow in Billion USD

  9. Slide-8 3. A LOOK AT TOP 20 FDI Recipients

  10. Slide-9 4. UNCTAD FDI FORECAST 5. Global Economy Contracted 2% in 2009 to grow by 3% in 2010. Net Growth ?

  11. Slide-10 FDI in Bangladesh • FCY Promotion & Protection Act 1980 For FDI • FDI is welcome • Special Zones for FDI • Refer to Table-2 (Page-6)

  12. Slide-11 FACTS ABOUT BANGLADESH FDI  81% of Total Investment for Private Sector  FY 2008-2009- Private Inv. Tk.120,200 Cr.FY 2009-2010 Tk.136,285 Cr. • 14.6% of GDP in FY 2008-2009 and 19.74% of GDP in FY 2009-2010(Prov) • Table 4 shows - Doing Business & Bangladesh

  13. Slide-12 • Private Inv. Proposal in 2009-2010 Tk 12,637 Cr. and FDI Tk. 4,262 Cr. Upto Feb 2010(BOI). • Bangladesh Performed Better during Financial Crisis- FDI attracted from EU, ASEAN & FarEast • Bangladesh BB Forum for Facilitating • Recent FDI & Investment Trends Table-1 Vs Table-3

  14. Slide-13 Recurrent Bangladesh & Draft SFYP • GDP to grow by 6%+ • Past 3 years GDP grew 5.9% Average • Poverty 56.67 in 1991/92 to 40% in 2005 • 5% Top have 20.85 times Income over 5% Bottom

  15. Slide-14 • PPP- 2% GDP in 2011 to 6% in 2015 • GDP to grow 8% in 2015 • Private Inv. 32% of GDP in 2015 from 19% • Average yearly 29.6% Inv. in 2015 • Power Generation of 9426 mw Added From US$ 9.5 Bln. Investment by 2015

  16. Slide-15 CONCLUSION • Profitability Attracts FDI • FDI Constitute some 2% of Global GDP • Can FDI alone Finance Development ? • Bangladesh FDI FDI (FY 2010) USD 900 mln Private Investment Tk 136,285 Cr. GDP- USD 100 bln • Oversight on FDI Needed • Globalisation For Bangladesh • Not Bangladesh for Globalisation

  17. THANK YOU FOR HEARING WITH PATIENCE

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