Liberalization works: Bangladesh's FDI explosion
Posted on 21 April 2005
India's Tata Group conglomerate has proposed a $2.5bn investment in Bangladesh. As India's Financial Express points out, that is is five times the total FDI there in 2004 and almost as much as the total Bangladesh FDI since 1972.
The industrial giant has made the formal proposal to invest $2.5 billion. It has signed a deal worth $500m more than last year's commitment to invest $2 billion in the power, steel and fertilizer sectors, the biggest single investment proposal in Bangladesh.
FDI has been growing as Bangladesh's privatization and private sector infrastructure building program get underway, evidence that liberalization encourages capital inflows. Bangladesh may offer some lessons for Africa and has the benefit of a politically savvy business community that has influence on the government's thinking.