Regulating foreign direct investment for development: Bangladesh in context

Foreign Direct Investment (FDI) is widely regarded as indispensable for the development of modern economies. But FDI usually entails two competing interests: profit maximisation by the investors and the maximisation of economic gains by the host state. A balanced regulatory approach is therefore warranted to serve the inherent purpose of FDI for stakeholders. FDI-induced development is particularly imperative for least-developed economies such as Bangladesh. To this end this thesis undertakes to examine the FDI regulatory regime of Bangladesh with a view to ascertain whether it pursues a balanced approach in regulating FDI. It finds that the regime traditionally assumes that economic development follows automatically as a result of increasing the inward flow of FDI. Contrasting this belief, the study finds that the existing FDI regime lacks a development-oriented approach and tilts, more often than not, towards serving the interests of the investors. It therefore highlights the caveats and inadequacies in the existing FDI regime of Bangladesh to trigger a reform pursuit and offers some recommendations to introduce development as a sought-after goal in regulating FDI, while simultaneously maintaining Bangladesh as an attractive destination for FDI. The assumed task referred to is accomplished: (a) by engaging in a theoretical discourse on the nexus between FDI regulation and sustainable development; and (b) by an examination of relevant regulatory laws, practice, mechanisms, and institutions involving entry regulations, incentives for FDI, protection of environmental and human rights particularly in the context of labour rights, involuntary resettlement, and the protection of foreign investors and host state‟s interests. The motivational factor behind this research is the lack of a comprehensive development-focused legal research in existing literature. The current academic research fills up that gap by focusing on all major development components of regulation attracted by FDI. It thereby makes an original contribution to the relevant literature both in national and international context in that it appears to be the first in-depth research on the FDI regime of Bangladesh with a view to render it a balanced and development-friendly regime. It significantly contributes to the conceptualization of the interrelation between regulation and FDI induced development and the necessity of its application in developing and least-developed host country context. It is comprehensive to the extent possible within the permitted word limit. In the specific context of Bangladesh, the outcomes of the research would immensely benefit its FDI strategists, policy-makers, negotiators, administrators, and legislators in creating a balanced regulatory regime to attract FDIs for development. In a wider context, other similar economies desirous of attracting FDI for development can learn important lessons from this research.