Attracting FDI in Bangladesh Challenges & Way Forward upon LDC Graduation

As Bangladesh prepares to graduate from Least Developed Country (LDC) status, the nation faces critical economic transitions that will shape its future growth trajectory. As FDI currently contributes less than one percent to the GDP, understanding the barriers and opportunities for improving this inflow is critical for sustaining economic growth post-graduation. This study aimed to analyze the factors hindering FDI in Bangladesh and explore potential strategies for improvement. The research identified bureaucratic complexity, high business costs, and inadequate infrastructure as the primary challenges impeding FDI. Moreover, it highlighted the adoption of technological advancements, enhanced transparency, and improved managerial capabilities as the most significant measures to attract foreign investments. Based on primary survey data from 120 industry representatives and 16 key informant interviews (KIIs), this study found that while bureaucratic hurdles remain a significant barrier, there are viable pathways for reform. The findings underscore the necessity of adopting a multifaceted approach to enhance the investment environment in Bangladesh, ensuring that the country can maintain its economic momentum post-LDC graduation.