Why high FDI kills economic development

[UKBengali]

Many of the "experts" here think that BD should become more like Vietnam and become a re-exporter for MNCs like Apple, Samsung etc.

Well let us look at what the UK's CEBR forecasts for growth rates for BD and Vietnam between 2027 and 2037.

https://cebr.com/wp-content/uploads/2022/12/WELT-2023.pdf

BD GDP annual average growth rate 6.5%
Vietnam annual average growth rate 5.2%


BD is doing the right thing by following the example of the "Asian Tiger" economies in restricting FDI to between 0.5-1.0% of GDP.

Let BD manufacturing rise more slowly but with BD's own companies and creating their own factories.

Only way to develop is to keep the money and technology inhouse.

 

[BananaRepublicUK]

Many of the "experts" here think that BD should become more like Vietnam and become a re-exporter for MNCs like Apple, Samsung etc.

Well let us look at what the UK's CEBR forecasts for growth rates for BD and Vietnam between 2027 and 2037.

https://cebr.com/wp-content/uploads/2022/12/WELT-2023.pdf

BD GDP annual average growth rate 6.5%
Vietnam annual average growth rate 5.2%


BD is doing the right thing by following the example of the "Asian Tiger" economies in restricting FDI to between 0.5-1.0% of GDP.

Let BD manufacturing rise more slowly but with BD's own companies and creating their own factories.

Only way to develop is to keep the money and technology inhouse.

Vietnam’s growth is slowing whilst BD is accelerating…

For the following:

1. Vietnam has exhausted its gender and demographic dividend. Whilst BD has a lot of women left to work.

2. Vietnam’s labour cost means it is becoming uncompetitive. Bangladeshi labour cost just took another tumble thanks to the recent devaluation against dollar.

3. Bangladeshi domestic market has huge growth potential because of low consumption whereas Vietnam already has healthy consumption numbers.

4. Vietnam has exhausted the benefits of trade deals. Whereas BD is only starting.

5. Vietnam has a mature civil service whereas our idiots can only get better and increase stuff like tax to GDP ratio.

 

[UKBengali]

Vietnam’s growth is slowing whilst BD is accelerating…

For the following:

1. Vietnam has exhausted its gender and demographic dividend. Whilst BD has a lot of women left to work.

2. Vietnam’s labour cost means it is becoming uncompetitive. Bangladeshi labour cost just took another tumble thanks to the recent devaluation against dollar.

3. Bangladeshi domestic market has huge growth potential because of low consumption whereas Vietnam already has healthy consumption numbers.

4. Vietnam has exhausted the benefits of trade deals. Whereas BD is only starting.

5. Vietnam has a mature civil service whereas our idiots can only get better and increase stuff like tax to GDP ratio.

Vietnam is still at a low-income per capita and so all those factors do not totally explain why it's growth is projected to slow to only 5.2% a year average between 2027-2037.

They got quick growth from inviting all the MNCs in but this has killed or hampered their local industry who were not able to compete.

BD only allowed some select MNCs like Samsung and LG in AFTER they were sure that BD companies like Walton could face them off. In the face of full assembly jobs from the Korean giants, Walton still holds 50% of the BD TV market and 70% for that of fridges.

Indian FTA is only happening now as BD companies are as if not more competitive than Indian ones in the sectors where BD trades in.

Can you name me a Vietnamese electronics brand that sells abroad in developed markets like BD's Walton does? No, they have made the classic mistake that others before them like Thailand have made and so probably consigning themselves into the "middle-income trap".


PS - BD growth is not going to slow to 6.5% but will power ahead at around 8% a year average between 2027-2037 as nearly everyone always underestimates BD growth.

 

[bluesky]

Many of the "experts" here think that BD should become more like Vietnam and become a re-exporter for MNCs like Apple, Samsung etc.

Well let us look at what the UK's CEBR forecasts for growth rates for BD and Vietnam between 2027 and 2037.

https://cebr.com/wp-content/uploads/2022/12/WELT-2023.pdf

BD GDP annual average growth rate 6.5%
Vietnam annual average growth rate 5.2%


BD is doing the right thing by following the example of the "Asian Tiger" economies in restricting FDI to between 0.5-1.0% of GDP.

Let BD manufacturing rise more slowly but with BD's own companies and creating their own factories.

Only way to develop is to keep the money and technology inhouse.

পাইনা তাই খাইনা।

The reality is very few FDIs want to invest in BD whatever may be their reasons. They prefer India and SE Asian countries such as Vietnam and MM. This is proved by the fact that only about a few billion dollars worth of FDIs has arrived in BD.

However, things may change when the Japanese EPZ is ready. We will see the number of investments from Japan in the aftermath of the construction of that EPZ near Matarbari.

The Japanese Ambassador can only take the cow to the pond but cannot force it to drink water.

 

[从八品主簿]

Bangladesh's R&D intensity is still very low. If you want to rely on industry, especially manufacturing, to enter high-income countries and developed countries, R&D intensity cannot be low, unless you are in the tourism and cultural industry, financial trade industry, etc. For example, Hong Kong does not need high R&D expenditures, otherwise a strong industrialization system needs to increase R&D intensity. In this regard, I don’t know who has more potential and opportunities, Bangladesh or Vietnam

 

[从八品主簿]

Currently, Bangladesh's research expenditure is 0.30 percent of her GDP, and it should go up significantly over time. It should be increased gradually to at least 2.5 percent of GDP (by 2030) as recommended for a country to be an R&D intensive one. But all in all, the following steps must be taken by us to improve the current condition of research。
It seems that the R&D intensity of Bangladesh is still much lower than that of Vietnam

We need to increase funds for research ten-fold by 2030

Bangladesh is lagging behind many nations including neighbours like India and Pakistan in the field of Research and development. The lack of research funds, absence of proper training as well as the non-existence of incentives in the R&D sector have led us here, all of which must be addressed...

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