The Role of Foreign Direct Investment in Bangladesh’s Economic Development

Foreign Direct Investment (FDI) plays a crucial role in the economic development of Bangladesh. It serves as a catalyst for job creation, technology transfer, infrastructure development, and the overall enhancement of productive capacities [1]. In this essay, we will explore the significance of FDI in Bangladesh’s economic growth and development.

1. Job Creation

FDI inflows into Bangladesh have led to the creation of employment opportunities. Foreign companies establish their operations in the country, which generates jobs for the local population. This helps to reduce unemployment rates and improve living standards [1].

2. Technology Transfer

Foreign companies bring advanced technologies and expertise to Bangladesh through FDI. This transfer of technology enhances the productivity and efficiency of local industries. It enables domestic firms to adopt modern production techniques, improve product quality, and compete in the global market [1].

3. Infrastructure Development

FDI contributes to the development of infrastructure in Bangladesh. Foreign investors often invest in sectors such as power, telecommunications, transportation, and manufacturing, which require substantial infrastructure support. This investment helps to improve the country’s infrastructure, making it more attractive for further investment and economic growth [1].

4. Enhancing Productive Capacities

FDI inflows contribute to the expansion and diversification of Bangladesh’s productive capacities. Foreign companies bring in capital, managerial expertise, and access to international markets. This enables local industries to expand their production capabilities, diversify their product offerings, and integrate into global value chains [1].

5. Boosting Export Potential

FDI plays a significant role in boosting Bangladesh’s export potential. Foreign companies often establish export-oriented industries in the country, taking advantage of its low labor costs and strategic location. This leads to an increase in export earnings, which contributes to the overall economic development of the country [1].


Foreign Direct Investment has emerged as a key driver of economic development in Bangladesh. It brings in capital, technology, and expertise, which contribute to job creation, infrastructure development, and the enhancement of productive capacities. FDI also plays a crucial role in boosting Bangladesh’s export potential and integrating the country into the global economy. Therefore, it is essential for Bangladesh to continue attracting and facilitating FDI inflows to sustain its economic growth and development.

Learn more:

  1. Bangladesh’s foreign policy and the importance of FDI
  2. Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach | Financial Innovation | Full Text
  3. Foreign direct investment in Bangladesh : issues of long-run sustainability

Leave a Comment