Economic Condition of Bangladesh

Report on
Economic Condition of
Bangladesh
Submitted by:
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Letter of Transmittal
01 march 2022
Teacher
Professor
University of
Subject: Submission of report on economic condition of Bangladesh
Sir,
It is a great honour for me to present the report to you. The report's topic is "Economic
Situation of Bangladesh," and I worked hard to make it sustainable. Working with the
country and preparing this report has been a wonderful and educational experience for me.
Yet, I have clearly benefited from this as well.
I would also like to thank you for all of your help and suggestions in putting together the
report. It'd be a great honour for me if you found this report helpful and informative in
gaining a better understanding of the situation. I would be pleased to answer any additional
questions you may have about this report or other pertinent topics.
Sincerely yours
Name

Acknowledgement
It was a great honour to express my gratitude to the wonderful people at the Institution for
their intelligent suggestions on how to enhance my profession and report.
At the very beginning, I'd want to express my gratitude to my parents, without whom I would
not have been able to finish the report. They help me by guiding, assisting and supporting me
during preparing the report.
I'd also like to express my gratitude to my teacher for assigning such a fascinating report
topic to me. I'd also like to thank my instructor for allowing me to start writing my report.
Finally, I want to thank my friends, without whom I would not have been able to finish this
project.

Executive Summary
The United Nations Conference on Trade and Development (UNCTAD) is one UN agency
tasked with expanding trade, finance, and potentials in developing nations. The IAS test is
significant to such major agencies and programs. In this report we will be talking about a
developing nation Bangladesh, it’s current economy, problems and prospectus etc.
Bangladesh's index score is 52.7, ranking it 137th in the 2022 Index score. Bangladesh is
placed 29th out of 39 Asian countries, as well as its total rating is lower than the regional or
global standards.
Bangladesh's economic growth has been steadily growing for past several years. Progress
rose from 2017 to 2019, then slowed in 2020 before picking up again in 2021. Yet, a five-
year path of gradually increasing economic liberty has come to a halt. Bangladesh have lost
2.3 points in net economic freedom since 2017, falling it into lowest portion of "Mostly
Unfree" class due to major score declines in minimum wage legislation mobility. The nation
scores well in terms of tax burden & public spending, but it falls short in terms of law of the
land and monetary freedom.

Introduction
Bangladesh seems to have a fantastic track record of economic empowerment. Throughout
the last decade, it is one of the world's fastest growing economies, owing to a structural
transformation, robust ready-made garments (RMG) exporters, and macroeconomic stability
situations. Trade and spending would remain to recover in the year 2021-22, boosting GDP
growth above 6.4 percent.
Bangladesh provides a stunning history of eradicating poverty and progress to the rest of the
globe. Bangladesh progressed by being one of the poorest countries when it was founded in
1971, with its tenth worst per individual GDP in the world, to becoming a lower-middle-
income country in 2015. Around 2026, it is expected to be removed out from UN's catalogue
of Developing World . Accordance with international poverty level of $1.90 daily, poverty
decreased from 43.5 % to 14.3 percent in 2016. Furthermore, human growth outputs
increased in a variety of ways.
According to UNCTAD
 Population of Bangladesh is around 164.689 million
 Exchange rate is 84.71 BDT/USD
 GDP is 322240 million
 CPI growth is 5.65%
 And GDP growth is 2.30%
Various new fields have sprung up as a result of advancement of information technology.
Even though role of ICT and telecommunications toward their economic condition was
minimal 10 to 15 years ago, it now plays a significant role to the economic growth. However,
both of these two sectors now generate a significant amount of cash for themselves and
contribute significantly to the economy. The lifestyle is rising as people's intellectual levels
rise. The economy will become an example for many other developing regions if these
current trends persist. Although Bangladesh's present situation is satisfactory, the authorities
must strictly oversee all economic activities.
About the country
Bangladesh is an independent country of south Asia. The are of Bangladesh is West Bengal
in the west, Northeast India in the north, and to the south India and Myanmar. The capital city
of Bangladesh is Dhaka. Also, Dhaka is the largest cities in the country.
Bangladesh declared independence from Pakistan in December 1971, following a war that
claimed the lives of over a million people. In Bangladesh, Muslims make up the majority of
the population. Bangladesh occupies an area approximately 57,320 square miles (142,576
square kilometres). It is slightly a small country than Tajikistan. By land, it is ranked 92nd
out of 195 independent nations. There are two major rivers: the Ganges and the Brahmaputra.
These are significant to Hindus. For these two major rivers, the country is frequently flooded.
The community of Bangladesh is 174.3 million.

History
For decades, what is currently Bangladesh was indeed a province of India's Part of the Indian
subcontinent. From of the Maurya (321–184 BCE) through the Mughal , that one was
administered by same emperors who governed core India. Bangladesh has been included
in the British acquired authority of territory and established their Empire in India (1858–
1947). However, during agreements for freedom as well as the separation of British India,
huge percentage of India was split from largely Muslim Bangladesh. Many leaders proposed
that only a separate Bengali republic might be a preferred option when tribal violence erupted
in India. The Indian National Congress, commanded by Mahatma Gandhi, rejected this
proposal.
While British India became independent in 1947, the Muslim portion became a quasi-part of
Pakistan. "East Pakistan" was the name given to it. East Pakistan was like an unusual
situation, cut off from the rest of Pakistan by a distance of 1,000-mile length of Indian
territory. This was segregated by ethnic background and languages from the rest of Pakistan;
Pakistanis were predominantly Punjabi and Pashtun, as compared to Bengali East Pakistanis.
East Pakistan's Awami League won maximum seat allotted to the East in 1970–71 legislative
elections. After unsuccessful meeting between the two Pakistan’s, Sheikh Mujibar Rahman
announced Bangladesh's independence from Pakistan in March 26, 1971. Although Pakistani
Army battled to prevent the Bangladeshis from independence, they fight very hard. Then
Bangladesh became an independent nation in December 16,1971.
Populations
Bangladesh has an inhabitant of around 159,000,000 people, making it the world's seventh
most populous country. Bangladesh suffers under the weight of a density exceeding 3,300
people/sq. miles.
Yet, populations growth slowed substantially, leading to a substitute birth-rate that has
dropped from 6.33 babies in 1975 to 2.15 in 2018. Bangladesh is likewise seeing a net
outflow of people.
98% of the inhabitants is ethnically Bengalis. Tiny clans along the Burmese borders and
Bihari immigrants receive the remaining 2%.
Languages
Bangla, often referred as Bengali, is Bangladesh's main language. In major cities, English is
also often spoken. Bangla is a Sanskrit-derived Indo-Aryan language. It has its own alphabet,
which is likewise dependent on Sanskrit.
In Bangladesh, several semi-Bengali Muslims use Urdu as their first language. Bangladesh's
education levels are increasing as the poverty decreases, however as of 2017, just 76 percent
of males and 70 percent of women were literate. As per UNESCO, those between 15–24 have
an education rate of 92 percent.
Religion
Bangladesh is really a stunningly beautiful country. The nation is regarded as a jewel among
the countries bordering the Indian Ocean. Aside from its beautiful nature, the country is home

to thriving towns. In this land, people of different faiths and civilizations live in peace. Most
of the world's main religions, along with minor religious factions, have believers inside the
country. The state welcomes people from all walks of life, regardless of their religious
beliefs.
The democracy orientation of Bangladesh is recognized in the nation's laws. The country's
most popular religion is Islam. The Legislature has previously revoked Islam's role as official
religion. The classification, however, was restored subsequently. There are also adherents of
Hindus, Christians, Buddhists, and other minorities religions, in addition to Muslims.
According to 2011 consensus-
 Islam (90.29%)
 Hinduism (8.64%)
 Buddhism (0.60%)
 Christianity (0.37%)
 Others (0.14%)
Geography
Bangladesh has vast, rich, and healthy soil, thanks to the 3 waterways that make it up the
different proficiency plain that it rests. The Ganga, Brahmaputra, and Meghna Rivers all flow
down from the Mountains, bringing resources to Bangladesh's agricultural areas.
However, such comfort comes at the expense. Bangladesh is nearly completely flat, with the
exception of a few hills around the Burmese borderline, that is almost totally at ocean level.
As a result, waterways, tropical storms off the coast of Bengal, especially tidal bores
periodically flood the streets. Except for a brief borderline with Burma (Myanmar) in the
southeast, Bangladesh is completely surrounded by India.
Politics
Bangladesh's Senator is the country's head of the government, whereas the Prime Minister is
the country's head of government. On five years, parliament pick a president with restricted
authority. Although the presidency is mostly symbolic, there are situations when the president
is required to perform much more than normal time. A custodian cabinet is what it's called.
The president appoints the prime minister, who must be a member of parliament (MP). The
president appoints the Ministry, which is constituted up of members picked by the prime
minister.
The Hall of the Country, also known as Jatiya Sangsad, represents Bangladesh's unicameral
parliament. The Jatiya Sangsad is made up of 300 members that are chosen by public vote for
5-year periods. The Supreme Court represents Bangladesh's ultimate judicial body, with
members appointed by the president.
Bangladesh's head of state established a one-party communist system following hunger in
1973 and 1974. Bangladesh was ruled by a military dictator until 1990. It has then evolved
into a true democracy. A interim administration was created in 2007 to assist in the fight
against corruption in Bangladeshi politics. Corruption allegations have been levelled against a
number of lawmakers.

Economy
Economy of the country is dependent on free market principles. It has the 44th biggest market
in the world and also the 2nd fastest increasing economy. The country has grown at a very
consistent rate of 6.5 percent since 2004. Which was around $180 billion during 2016, with a
growth rate of 7.1 percent. Through 2021, the figure is predicted to rise to $322 billion.
Fabrics, medicines, textiles, fishery, aluminium, LPG, shipyard, telecommunications, & food
preparation are among Bangladesh's many sectors. Moreover, it has the Indian subcontinent's
second-largest banking sector.
International investors have been drawn toward this economy because of its stability and
prosperity. Incoming new investors surpassed $2 million in 2015, up 44 percent from 2014.
Some of the above-mentioned businesses, as well as oil and power generating, benefited from
these advances. Bangladesh's open approach, that enables the 100% international investment
in several industries, is among the causes so many international investors are drawn to the
country.
Most important economic sector in Bangladesh is-
Agriculture
Agricultural production provides food for a huge portion of Bangladesh's inhabitants. Rice is
the major crop, but jute, maize, and diverse vegetables are also becoming more important.
Numerous citizens in Bangladesh face food crisis as a result of the country's rapidly rising
population. Weather-related risks and natural calamities obstruct business potential.
Furthermore, the amount of non-in remote regions is on the rise. Investments in innovative
technology have been limited due to the risk associated with agricultural output.
Manufacturing
The textile industry is the biggest contributor to industrial production. Clothing industries
employ roughly 3 million people, the majority of them are women. Wages, on the other hand,
remain among the lowest in history, notwithstanding a new wage increase. The fashion
industry now accounts for 80% of nation's export earnings. Bangladesh is still the second-
largest supplier of textiles in the globe. Shipyard, medicines, textiles, and ICT are among the
other industries.
Finance
Banks in the country primarily state-owned till the 1980s, even though aforementioned. This
state involved in developing risk-based policies during 2000 and 2006. There's many
currently four govt specialized banks, nine international banks, and 39 private sector banks
operating in the country.
Country Profile 1990 2000 2010 2020
Population in milion 103.07 127.56 147.46 174.3
Population Growth 2.4 2.0 1.1 1.0
Surface area(sq. km. )thousands 148.5 148.5 148.5 147.5
Population density /sq. km. 792 980 1133 1265

GNI (billion) 32.61 55.61 118.42 333.85
GNI per capita 320 440 800 2030
Life expectancy 58 65 70 73
Fertility rate 4.5 3.3 2.3 2.0
School Enrolment 83.8% 85.03% 86.87% 93.56%
Forest area(sq. km.) 19.2 19.2 18.9 18.8
Urban Population Growth 4.9 3.6 3.6 3.0
Energy use (kg of oil equivalent per
capita)
123 143 207 …
CO2 emission 0.11 0.17 0.34 0.51
Electric power consumption 50 107 245 ….
GDP 31.60 53.37 115.28 323.65
GDP growth 5.6 5.3 5.6 3.5
Inflation 6.5 3.4 7.1 4.1
Exports of goods and services (% of
GDP)
6 12 16 12
Imports of goods and services (% of
GDP)
13 17 22 19
Personal remittance 779 1968 10850 21750
FDI 3 280 1232 1143
Tax revenue … 6.4 7.8 ….
Industrial Contribution to the
Country
Agricultural production makes the greatest influence to the prosperity. Once upon a
time, people couldn't imagine the industry without agricultural production because agriculture
employed 85 percent of the nation's people. However, the circumstance has altered, with
farming now being replaced by ready-made garments (RMG), banking and non-
banking financial institutions, freelancing, and personnel exports, all of which add value to
the economy.
In a broad sense, the economic growth can be split into multiple industries. When you
look at the overall contribution towards the GDP in 2014, you'll notice that manufacturers
contributes 17 percent of the GDP, while agriculture and wholesale-retail commerce each
provide 13 percent of the total 26 percent.
A sum of 23% of the participation comes from the information and service industry.
In 2014, the social and service sector contributed 12 percent of the overall GDP, while the
communications (transport, communications) industry contributed 11 percent of Bangladesh's
GDP. Yearly, the other eleven sectors also contribute a significant amount.

13%
3%
2%
17%
1%
8%
13%
1%
11%
4%
7%
3%
3%
2%
12%
Industrial Contribution
Agriculture
Fishing
Mining
Manufacturing
Electricity,Gas,water
Construction
Wholesell and resell unit
Hotel and Restaurant
Transport & Communication
Financial institution
Real Estate
Public administration
Education
Health & social works
Community and personal service
Stock Market
There are 2 stock markets in the financial system. DSE stands for Dhaka Stock Exchange,
while CSE stands for Chittagong Stock Exchange. The Dhaka Stock Exchange contains 549
businesses listed, while the Chittagong Stock Exchange includes 250 listed firms. Even
though the equity market has performed successfully throughout the years, its share market
imploded a few years ago. The stock market was growing quickly at the time, and many
investors made a lot of money. The stock market increased by 62 percent in 2009 and 83
percent in 2010, but then fell by 10% in January 2011 and another 30% in February 2011. As
a result of the continuing declines, several investors have lost their whole deposit. The
government attempted and continues to attempt a repair, but stabilization will take a while. If
we look at the stock trading volume in 2015, we will see that the economy still isn't doing
well. As a result, individuals must exercise caution before placing any stock market
investments.
Remittance Inflow
Through sending remittances every year, staff working abroad Bangladesh contribute
indirectly for the country. This enormous sum of money is assisting us in improving the
economy. Remittances as well as the trade of ready-made clothes are also enhancing the
country's balance of payments. The following is the earnings scenario for 2014 and 2015. The
flow of remittances appears to be consistent, but it is down in the year and compared to prior
year.

1990-
1991 1992-
1993 1994-
1995 1996-
1997 1998-
1999 2000-
2001 2002-
2003 2004-
2005 2006-
2007 2007-
2008 2009-
2010 2011-
2012 2013-
2014
0
2000
4000
6000
8000
10000
12000
14000
16000
Remmitance in million USD
Remmitance
Reserves of foreign currency
The reserves of offshore money have changed significantly. When we examine at the stocks
per year, we can see that they are increasing every year. Its currency surplus was just 2930
million USD in 2004-2005, but it became 21558 million in 2013-2014. The pace of rise in
reserve during the last ten years has been 635 percent, which is a significant success for the
economy. Its economy will be considerably more efficient when people can use this immense
amount of currency reserves for importing capital goods & reinvest in creative areas. As a
result, the economy would grow at a quicker rate than before.
2004-05 2005-06 2006-07 2007-08 2008-09 2009-2010 2010-11 2011-12 2012-13 2013-14
2930 3484
5077 6149
7471
10750 10912 10364
15315
21558
reserves of foreign currency
reserves of foreign currency

Import from other countries
Per year, Bangladesh imports a big amount from various countries worldwide, with China
and India accounting for the majority of them. It imported 20.70 percent of its goods from
China, 16.60 percent from India, 6.30 percent from Singapore, 5.60 percent from Malaysia,
plus 3.50 percent from Japan the other year. The majority of the electrical products are
imported from China. Imports are made with foreign monies that have been held in reserve.
Country Percentage Import
China 20.70%
India 16.60%
Singapore 6.30%
Malaysia 5.60%
Japan 3.50%
FDI trend in Bangladesh
What is FDI?
FDI stands for Foreign Direct Investment. FDI is a type of foreign invested capital in which a
domestic entity inside one country seeks to acquire a long-term stake in a company in this
other currency. The presence of such a long-term relationship seen between foreign investor
and indeed the organization, as well as a sufficient extent of stakeholder control over the
firm's administration, is required for the shareholder to have an enduring engagement. Direct
investment includes perhaps the first activity that establishes the investor-enterprise
interaction, but also all following interactions between them and among linked firms, whether
registered and unregistered. A outward direct organization is indeed a registered or
unregistered business for which a directly investment acquires 10% or over of common stock
or legislative power in the case of a body corporate, or the corresponding in the case of an
uncontrolled company.
FDI inflow have obviously halted as a result of a yearlong outbreak. The UNCTAD's World
Investment Report 2020 predicts a 40% drop in FDI flows. Despite this, with the revival of
economy, the rates are predicted to be constant in 2021.
FDI is a significant economic powerhouse, particularly for emerging countries such as
Bangladesh, because it allows countries to acquire capital, create jobs, expand productivity,
and build management and intellectual capabilities. During the epidemic, international
corporations' actions in China were increased, which had begun as a result of the US-China
trade dispute. This confronts Bangladesh with a fantastic opportunity, which must seize with
a policy-driven, well-regulated, and rewarding investment environment.
Historical trend of FDI inflow of
Bangladesh
Bangladesh's FDI regulation enjoyed a banner year in Fiscal 2019, with a milestone level of
net Inflow of FDI totalling USD 3.88 billion. Yet, due to omission of means of boosting

from the fourth quarter of 2019, such estimate opposes UNCTAD's analysis, revealing an
instance of misrepresentation. FDI inflows jumped to USD 2.58 billion during Fiscal year
2019 from USD 2.58 billion in Fiscal 2018, as per the Bangladesh Investment Development
Authority and Bangladesh Bank.
2017 2018 2019 2020
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Total FDI inflows
Total FDI inflows
China was the major foreign contributor in Bangladesh during Financial years 2019, with a
gross value of USD 1159.42 million. Netherlands came in second with one total investment
of USD 802.84 million, led by the United Kingdom, Singapore, the United States, Hong
Kong and India. Japan might have recently begun to transfer its resources away from China
and toward Bangladesh, with Bangladesh being the preferred destination. The largest FDI
into Bangladesh occurred in Nov. 2018. Because Japan has made such massive investments
in Bangladesh, it demonstrates Japan's certainty in conducting business there, which may
help to attract additional large international investors.

China
Netherlands
UK
Singapore
Hong Kong
USA
India
Norway
Others
0% 5% 10% 15% 20% 25% 30% 35%
Percentage FDI inflows form different cities
Percentage FDI inflows form different cities
In 2019, power sector gained most funding in Bangladesh, totalling USD 1217.84 million.
Foods, trade, infrastructure, textile and leather products, medicines and chemical products,
farming and fishery, and IT services are all key international investment industries inside this
country.
Power
Food
Banking
Textile
Telecommunication
Others
0% 5% 10% 15% 20% 25% 30% 35%
Net FDI inflows by sectors
Net FDI inflows by sectors
FDI trend historical data
Table: Basic Time Series Data on FDI Inflows
based on components(million USD)
EQUITY CAPITAL REINVESTED
EARNINGS
INTRA COMPANY
LOANS

1996 69.53 121.82 40.35
1997 331.16 163.83 79.34
1998 280.43 189.98 106.45
1999 137.43 76.34 95.45
2000 350.52 77.34 150.45
2001 233.53 65.43 55.64
2002 133.73 116.64 84.39
2003 156.82 170.34 23.45
2004 155.48 239.48 64.34
2005 425.76 247.4 172.43
2006 502.34 264.37 24.54
2007 402.45 213.43 51.45
2008 809.53 245.92 31.43
2009 218.94 364.28 116.34
2010 519.39 364.37 28.09
2011 431.73 489.39 214.39
1012 497.91 587.34 207.93
2013 541.62 697.34 360.33
2014 280.22 988.43 282.93
2015 696.34 1144.23 393.97
2016 911.28 1215.37 205.34
2017 538.82 1279.38 333.43
2018 1124.38 1309.34 1180.34
Table: FDI inflows by areas
(million)
EPZ N0N EPZ TOTAL
1996 41.31 188.30 229.61
1997 68.25 505.04 573.29
1998 87.31 487.15 574.46
1999 153.43 153.69 352.47
2000 55.06 297.42 333.47
2001 55.23 297.41 335.47
2002 86.53 246.94 348.25
2003 58.31 289.41 458.40
2004 41.68 416.72 457.83
2005 109.82 733.44 843.26
2006 70.03 720.44 790.48
2007 104.44 559.93 664.36
2008 117.55 966.76 1084.31
2009 140.88 557.28 698.16
2010 117.17 794.15 911.32
2011 227.03 907.35 1134.38
2012 250.47 1040.09 1290.56
2013 351.07 1246.09 1597.16
2014 405.41 1143.87 1549.28
2015 405.77 1827.95 2233.72
2016 415.77 1914.95 2330.93
2017 479.83 1669.73 2149.03
2018 311.5 3399.80 3611.30

What you will consider to invest in
Bangladesh?
Bangladesh's limited FDI inflow underscores necessity for policy and regulatory revisions to
rebuild the corporate culture and regain investors' trust. Bangladesh wasn't really chosen by
each of the 51 firms who transferred their manufacturing from out Beijing during 2018 and
2019, according to Nomura, a Japanese financial firm. Bangladesh needs find answers to
various broad concerns that stand in the way of increasing foreign direct capital inflow.
Strong Points
 Favourable economic equilibrium is characterized by a high GDP growth of 8.2%
during 2019 and 3.8 percent in 2020 (according to IMF), as well as a reasonable
public debt burden of 39.6% in 2020. (IMF)
 Open and a huge diversified economy
 Low cost workforce available
 A key geographical location as a gateway to Asia-Pacific countries
 A specific competitive placement inside the worldwide economy's supply chain
 Favourable land and whether condition
 A setting that is globally business-friendly in terms of economics and legislation.
Weak points:
 The state's limited infrastructure, onerous administrative, significant level of
corruption, lack of transparency, and delayed court system make for a difficult
business climate.
 Exporters that are too reliant on the garment industry and aren't sufficiently diverse
 Continuous mass movements endanger the fragile stability in the region
 Weak financial sector
 Environmental hazards (storms, major floods) that cause significant income losses are
a risk.
 A system based on the clothing industry and marked by low standard of living.
Bangladesh's govt. is effectively seeking international investment, especially mostly in
energy and infrastructure sectors. Several initiatives have now been established as part of a
collaborative policy, an exporting market strategy, and a public-private partnership (PPP)
initiative that began in 2009. Since overseas investors face minor bias, the govt favors
domestic sectors. Transportation of medication that conflict with publicly created
medications, for example, is strictly regulated, and transhipment businesses must have a local
major share.
To avoid becoming overly reliant on rapid industrialization mostly in textile industries
(textiles account for over 86 percent of Bangladesh's export value, according to every recent
data ), the govt is attempting to develop specific segments by providing incentives and
perfect circumstances to companies engaged in these fields.
The authorities has also initiated a slew of economic projects and initiatives, including a
roads and railways bridge across the Padma River and the Dhaka metro, to name a few.
Bangladesh recently signed 30 trade agreements treaties with other countries.

Impact of FDI on Bangladesh
Foreign Direct Investment (FDI) is critical to a country's economic growth and development.
It's also especially critical when reserves are insufficient to support public investment. Which
not only meets an nation's investment needs, but also introduces latest tech, management
expertise, and increases forex reserves.
Inflows of foreign direct investment benefit underdeveloped and growing economies
much more than industrialized economies. "A kind of foreign business that represents the
purpose of a taxable person in one country obtaining an enduring participation and
ownership in an enterprise that is resident," according to the IMF.
Until to 1980s, theoretical approaches did not focus much on fdi and multilateral enterprises
(MNEs). Just about all states' economic plans have been shaped by industrialization over the
previous three decades. Foreign investment from home nations to server countries are a
crucial part of globalization.
Although there's no universal rule defining developed and developing both home and host
countries, Capital inflows from established to developing as well as developed states are the
most common. In order to attract FDI, underdeveloped and young countries are increasingly
competing. In this aspect, Bangladesh does not lag behind.
International Investment
Agreement of Bangladesh
Contextually, "total investment" may signify a variety of things. The most general meaning
of the word is the complete amount of financial funds that an entity have and must therefore
put it into business. The phrase is frequently used to describe the amount of money required
to establish a firm. The total investment of a country can be measured in a numerous way.
UNCTAD stands for United Nations Conference on Trade and Development. It was
established in 1964 as an organization to promote international trade. The United Nations
Conference on Trade as well as Advancement (UNCTAD) is indeed a branch of the United
Nations Secretariat that deals with commerce, business, and growth concerns. "Boost the
commerce, investment, & advancement opportunities for underdeveloped countries to aid
nations in existing integrating into the global economy over an equivalent basis," the firm's
goals state.
UNCTAD's main goal is to design strategies in all domains of development, especially trade,
support, transportation, economics, and development. The assembly meets every four years,
and the institutional administration is based in Geneva.
UNCTAD's International Investment Agreements (IIAs) Work Plan regularly aids regulators,
government representatives, as well as other IIA partners in reforming IIAs to ensure
arrangements increasingly favourable to sustainable development and social progress.

The main objectives of UNCTAD's IIA Work
Plan
 To improve the sustainable economic factor of international investment agreements
(IIAs), modify the framework.
 Provide a thorough examination of important concerns resulting from the global
investment administration's complexities.
 Build a variety of tools to aid in the development of more equitable foreign equity
policies.
IIA navigator:
The IIA Navigator is indeed a collection of Contracts managed by UNCTAD's IIA Unit. One
can look through IIAs signed by a specific country or set of countries, explore newly signed
IIAs, or use the Comprehensive Treaty Lookup to conduct more in-depth searches.
According to UNCTAD :
Bilateral Investment Treaties(BIT’s)Total : 2794
In force: 2226
Treaties with Investment Provisions (TIP’s)Total:424
In force: 331
Recent BIT’s of Bangladesh
Short title Status Parties Date of
Signature
1 Cambodia-Bangladesh BIT Signed(not in
force)
Cambodia 17/06/2014
2 Bangladesh-Turkey BIT In force Turkey 12/03/2012
3 Bangladesh-Arab Emirates Signes(not in
force)
United arab
Emirates
17/01/2011
4 Bangladesh-India BIT In force India 09/02/2009
5 Bangladesh -Denmark BIT In force Denmark 05/11/2009
Recent TIP’s investments
Short title Status Parties Date of sign.
1 APTA investment
agreement 2009
Signed(not in
force)
China, korea,
Laos, Sri Lanka
15/12/2009
2 SAFTA In force 06/01/2004
3 Bangladesh-EC
cooperation Agreement
In force EU 22/05/2000
4 OIC investment agreement In force 05/06/1981

ISDS-Investor-State Dispute
Settlement
ISDS (investor-state dispute settlement) or the investment court system (ICS) is just a
mechanism that allows individuals to pursue nations for discriminatory behavior regarding
FDI. The ISDS's objective is to enrich nations that willingly join there; those countries have
benefited because foreign firms are encouraged to participate under ISDS's coverage.
Foreign investor treaties, like the Energy Charter Convention, have ISDS provisions. When a
shareholder through one state invests inside another area , and the host government infringes
the individual's rights under the convention, the entrepreneur may pursue the dispute in front
of an independent arbitrator.
DISPUTES BETWEEN THE PARTIES ABOUT
THE TREATY'S INTERPRETATION OR
APPLICATION
a. If at all practicable, every conflict between the Parties originating from or related to
an interpretation and implementation of this Agreement should be resolved via
diplomatic means.
b. If a disagreement between both the Parties could be resolved in this manner, it will be
presented to an arbitration panel at the request of the Data subject.
c. For every case, the-Tribunal will be described as following: Every Party must choose
an adjudicator within 2 months after receiving a request seeking adjudication. The
two adjudicators will choose a further judge as Chairperson, who will be a resident of
a third country. The Chairman must be selected within two months following the
other 2 arbitrators' appointments.
d. If such requisite decisions are not obtained within the time periods indicated in point
(c) upon this Article in the lacking of any such agreement, call the President of the
International Criminal court for making any relevant nominations. If the Chairman is
a member than either campaign's national team or is otherwise unable to carry out his
duties, the Vice-President will be told to make the required nominations.
e. If an adjudicator steps down or becomes unwilling carry out his duties for some other
reason, a successor shall be chosen over thirty days, using the same process as that of
the adjudicator who was substituted. If the successor is not chosen within the above-
mentioned time limit, any Party may request that the Administrator of the
International Criminal court make the appropriate appointment.
f. By such a supermajority, the arbitration panel will reach a conclusion in conformity
with international legislation. Both Parties are bound by such a judgment. Each Party
is responsible for its own defence in the arbitration proceeding; the arbitrator's fee and
the additional costs are shared equally by the Parties.
g. The terms of this section do not bind to a claim arising (a) underneath the U.s' credit
facilities, assurance, or insurance schemes, or (b) under the other or coverage
arrangements made subsequent to other dispute-resolution mechanisms.

ISDS and Bangladesh
Saipem v. Bangladesh
(ICSID Case No. ARB/05/7)
 Applicable IIA- Bangladesh - Italy BIT (1990)
 Respondent State(s)-Bangladesh
 Home State(s) of investor-Italy
 Details of investment-Under such a treaty completed between the claimants and a
Government company for the building of a gas field, the claimants has the ability to
appeal (the rights deriving by agreement with an economic value).
 Summary of the dispute-Claims resulting from deeds by the Government organization
Petrobangla and Bangladeshi law purportedly directed at wrecking an ICC
commercial arbitration process and also the successive non-enforcement of the grant
relating to the contract finalized between the applicant then said Government
organization for the development of a lengthy pipe line.
 Economic subsector-42 - Civil engineering
 Outcome-Decided in favour of investor
 Award dated on 30 june 2009
 Amount claimed by investor-12.5 million USD
 Awarded by tribunal-6.30 million USD
Do foreign investors get
protection in Bangladesh?
Bangladesh pursues international investment in a variety of sectors, including textile, energy,
petroleum, and infrastructures. Its trade policies and export-oriented economic plan provide a
variety of investment opportunities, with little legal differences between international and
domestic international investment.
The Bangladesh Investment Development Authority (BIDA) is the government agency in
charge of overseeing and encouraging corporate investment in Bangladesh. Under its
respective Export Processing Zone as well as Trade Area, Bangladesh Export Processing
Region and Bangladeshi Free Trade zone Agency have the same functions and
responsibilities as BIDA.
Bangladesh's International Investment Preservation Legislation:
The Foreign Direct Investment Regulation of 1980, that guarantees the restoration of
money and dividends for international investors, protects international investments from state
ownership and confiscation. Bangladesh also have enacted appropriate legislation to
safeguard proprietary information.
In addition to the International Capital Investment Regulation of 1980, the cabinet has
devised a Policy Measures that promotes a simple but effective investment strategies in the
country. The policy makes it easier to build a company by automating the process of rentals
and purchasing land titles, forming a company, granting a corporation tax vacation of up to 7

years , and enabling overseas workers to be exempt from paying tax rate for up to three years
or longer.
The Dispute Legislation allows for resolving disputes inside the case of a claim. The
International Treaty for such Recognizing and Arbitration act has been adopted by
Bangladesh. Bangladesh is a participant in the International Centre for Settlement of
Investment Disputes (ICSID). International arbitrations can also be enforced without that
much difficulty under present legislation. Though starting a business could be intimidating,
Bangladesh provides investors with a secure and efficient ecosystem that is ideal for start-up
or development of any firm, and after much thought, it can be said that Bangladesh is a "ideal
investment destination."
Current situation of FDI in
Bangladesh
There seems to be a significant fluctuation trade and investment flows, notably an increase in
FDI, over the recent decade. In spite of being a new occurrence, numerous underlying
reasons have caused a rise in FDI rise in Bangladesh, including inflation and trade
modernization, working capital substitutability, focus on private industry led advancement,
globalisation of the economy, reopening of utilities to the private market internal and
external, over all else, institutional investors' participation in the electricity and technology
sectors. It is suggested that in underdeveloped countries such as Bangladesh, greater market -
friendly policies are linked to the presence of international enterprises and broader
technological and productivity benefits.
In economies with free trading arrangements, there is already evidence of significant positive
association involving increasing the participation of FDI in GDP and expansion to increased
exports. FDI, however, accounts for a small percentage of the nation's exports or overall
investments. FDI as a percentage of GDP has fluctuated throughout the last decades, ranging
from 1.4 percent in FY1998 to 0.5 percent in FY2004. The percentage increased to 1.3
percent in FY05, owing to a strong FDI entry into the telecom industry . FDI as a percentage
of gross investment fluctuated between 1.2 percent in FY2004 and 3.2 percent in FY1998.
How the country can gain from
FDI?
A firm will continually seek for alternative techniques to benefit; its growth is driven by its
enhancing the customer and keep earnings pouring. A developed business environment, on
the other hand, entails a developed country. Foreign direct investment is one of most current
methods of raising earnings . But what's it, & how could it help businesses make money?
Some key ways how Bangladeshi businesses can generate profit from FDI-
Obtaining fresh market access

Most straightforward way for a company to benefit from FDI is to get access to markets and
so expand. The gain is self-evident: when a firm invests in their business or opens a new
activity in a different country, they enter a certain market and increase their market reach.
Rising market reach can aid the company's growth and profit margins. Gains may come not
just within the form of such a direct growth in market share in a certain sector, but also in
form of access to sensitive target client groups.
Taking the advantage of resources
Increased accessibility may likewise benefit and enhance a company's revenues. Businesses
can acquire access to new technology, assets, managerial skills, and collaboration prospects
by participating in a multinational corporation. All of which can assist the company in either
saving money or increasing profits. While allocation of resources, like business acumen, is a
somewhat indirect approach to raise profitability, others assets, including possessing the raw
ingredients for the products on hand, can be a more immediate boost.
Lowering the production costs
The increase in earnings as a result of lower manufacturing costs is linked to the main
statement. If you do have access to the raw resources, you can make your product for less
money than unless you had to purchase them first. Longitudinal FDI focuses with issues like
owning a manufacturing plant, that could increase profits by lowering manufacturing costs —
unless you can create the items inside your own company, you didn't have to spend money by
purchasing the final piece from such a third-party vendor. Establishing FDIs in nations with
cheaper labour is a classic illustration of the potential to bring down manufacturing costs.
Companies may be enticed to relocate their manufacturing to countries with lower labour
costs-a sensitive topic in today's world.
How inward FDI affect the
economy of Bangladesh?
Bangladesh does indeed have a great possibility as a major exporter of labor-oriented goods
like garments and other commodities. Yet, Bangladeshi companies faced significant
challenges in establishing a supply chain, simultaneously maintaining with frequent changes
in customer tastes, learning the intricacies of manufacturing regulations and regulatory
standards, and developing a fresh product identity at the outset. In many circumstances, the
ability to create items at, or under, international marketplace leading prices is just as vital as
the ability to design, package, distribute, and service them. Bangladesh's inability to penetrate
international markets was hampered by a lack of such talents.
What influence does foreign direct investment (FDI) represent in Bangladesh's export
growth? The extra income, technologies, and managerial know-how that multinational
corporations (MNCs) carry with themselves, as well as accessibility to worldwide, national,
and notably home-country markets, are theorized to have a modelling influence on the local
country's exports. These FDI-brought funds and access to market also supplemented
Bangladesh's resources and expertise, filling up some of the gaps for better efficiency. As a

result, Bangladesh has built on this one to expand into new export industries and achieve high
performance in current systems.
FDI aids exported goods by making investments with in utilization of Bangladesh's minimal
labour, particularly during the 1990s, when local investment was constrained by budgetary
constraints. Substantial FDI helped to address the infrastructure gaps while also taking the
risk of generating new exports. Additional finance was crucial in helping Bangladesh
establish its initial base of labour-intensive industrial exports.
Bangladesh benefits from FDI by improving the competitive advantages for export-oriented
manufacturing of technology-intensive and progressive items in the global marketplace.
Those assets are frequently firm-specific, expensive, and challenging for Bangladeshi
companies to obtain on their own. The transference of certain assets into Bangladesh by
overseas subsidiaries or quasi partners including training, skills enhancement, and
information dissemination creates opportunities for further distribution to other businesses
and the economy at large. As a result, more businesses can expand their exports, and the
elements that drive competitiveness become embedded in the Bangladeshi economy.
The consequences of FDI on Bangladesh's exports can be stated as follows. The direct
consequences refer to exports made directly by foreign subsidiaries. The indirect effects of
FDI on local enterprises' export activity are compensated for by FDI spill overs.
By collateral impact on local enterprises' exporting activity, FDI boosts Bangladesh's
industrial exports. Local enterprises, for example, can grow their exports by studying the
export performance of international affiliates and utilizing the transportation, media, and
financial institutions network that emerges to facilitate those actions. The consequence of
FDI on the productivity of domestic enterprises' exporting and the introduction of advanced
technology is the second ripple effect. MNCs may boost competitiveness in Bangladeshi
marketplaces by bringing superior product-process technology, management, and marketing
expertise, forcing local enterprises to adopt more efficient ways. The third type of spill over
concerns the relationship between international and domestic enterprises.