Direct Foreign Investment (DFI) and Bangladesh- Facts and fantasy

Tweet
Published by mdrkarim7 | November 8, 2011 - 5 weeks 5 days ago

Direct Foreign Investment (DFI) and Bangladesh- Facts and fantasy Bangladesh is enjoying the Direct Foreign Investment (DFI) very poorly in comparison with India, China or other Asian countries. In this study we would like to find out some reasons and would discuss the relevant matters that might shed better light on the Bangladeshi economy. The economic calculation: In order to achieve the 8% growth in the Gross Domestic Product, we have tDireo have 32% investment, which is at present 23-24% maximum. Bangladesh gets 79% investments from ten Western and Eastern Countries. USA and UK hold 30% of the total foreign stakes. The tendency of the foreign companies is to harvesting, rather than reinvesting further, particularly the Oil, Gas, and Electricity producing companies are doing this. Positive sides: Government is providing policy facilities open handedly to DFI Specialized economic zone, Specialized Economic Zone (SEZ) Act has been drafted, which would be directly related to Prime Ministers office. So, Government, in other sense, would turn to a business party, one might wonder! Current tendency for foreign investment is service sector; The reasons for poor Direct Foreign Investment could be summed up as follows: Mainly its the infrastructure and lack in good governance, or corruptions. Government is only announcing promotional packages and benefits for investing DFIs; yet it is not getting fruitful results! There must be some hidden reasons; experts are blind to see them! Corruptions in all departments and sections; Inefficient government bureaucracy; Ever changing policy, or instability in policy matter; Limited number of highly skilled resources, human resources; Global recession; Long chain of processing documents and papers in doing business; Functions and role of Investment Board is also a matter of investigation; Political destructive and instability in following policy matters. For particularly energy sector, proper communication and invitation to the right parties are not done properly and timely; High administrative costs, due to bribery in all the sectors. If considering the above proper measures are not taken by the Bangladesh Government, aspiration and hope would be like high and dry in future like today, the rests rhetoric. Only words cannot soft the beaten rice or rather other wittingly comments crunchy fries require pan-full of oil.

Reasons to oppose FDI in Retail, A Big No to FDI in Retail.

Tweet
Published by shailesh549 | November 30, 2011 - 2 weeks 4 days ago

51% FDI In Retail: Indian government has allowed 51% FDI in multibrand retail and 100% FDI in single brand retail, a move for which Indian government is getting praised by foreign companies like WalMart, Carrefour, Tesco, Adidas, Gucci etc . Now what is FDI in multibrand retail and single brand retail or what do you mean by FDI in retail. Multibrand is many brands under one store i.e. Big Bazaar where multiple brands can be found under one store is multibrand retail. Single brand retail is the store that sells only one brand i.e. you must be knowing exclusive showroom of Spykar or Levi Strauss, these are single brand retails. Companies like WalMart, Carrefour, Tesco, Adidas, Gucci etc. companies have their eyes set on huge still unexplored retail sector in India but they were not able to set foot in India because of the restrictions imposed by Indian government. Are We Not Capable Enough to Run Our Own Business: The decision of government to allow FDI in retail raises doubts on our own ability to create an ever-growing retail business in the country. The question is not just about allowing FDI in retail but also its about how much foreign participation should Indian government allow in our economic system and take care of its own people. Government is saying that it will create 1 crore jobs in the next 10 years, but its forgetting the fact that self-employment opportunities on which our retail system at present works will get destroyed, and at a time when we needed to promote self employment in our country as getting a job is getting tougher and tougher and bringing FDI in retail would even add fuel to the fire. I have to say Thailand is a recent victim of FDI in retail. Nearly 60% of small businesses got shut down within no time and there exist a monopoly of few such big players. Does Money Mean Everything to Our Government: Our government has been sold out to the idea of bringing $590 billion and hence took this decision to bring FDI in retail. Our retail business never fell short of funds then why do we need to bring FDI in retail. The fact is our retail business ran out of customers in many cities, however, street-corner shops kept doing fabulous business all over the country apart from the 53 major cities that the government has decided to open mega stores for international retail business giants. Theres really no need to bring FDI in retail at this present moment in Indian conditions. The retailers would get affected adversely. One suggestion is government should allow it in wholesale so as to make wholesale distribution equal to root out inflation from the country rather than forcing it on retailers. Doing it in wholesale will create boost for retailers and also for the consumers which in turn result in smooth supply of the products. Save The Street Corner Shops:

Our government is simply not interested in verifying truth, and is interested in drawing its own conclusion by bringing FDI in retail and showcasing its own way about it and saying its better than everything else. Reforms need to be done and nobody would have an opposition to that if theyre doing for the right reasons, but please dont make reforms look ridiculous than being practical at all. The government lacks true vision to go ahead with reforms. Reforms as I said are all right but that doesnt mean we ke ep opening up areas in which we can do well without reforms. A quarter of a century ago in United States WalMart was doing exceptionally well, but wherever WalMart store came up, dozens of Pop-and-Mom stores in small neighbourhood around the mega store went out of business, no matter how good those small stores were and no matter how good those couples. This is Not Our Way of Doing Business: Obviously, a Pop-and-Mom store cant compete with a giant like WalMart. As in the US the free market economy exists death of innumerable Pop-and-Mom stores didnt make any difference because Survival of the fittest is the ultimate slogan of the free market economy there. India isnt US, thered be uproar if such stores keep dying everyday and there would be a sense of instability within the system as a whole. People will lose their employment, a business that they were running from years. Do we want such a system in our country? Basically, street corner grocery shops have a very personalised style of doing business where each customer is special and gets customised treatment. In contradiction to this when we go to a megastore we realise how impersonal are the services there. There, a customer is only a person who flaunts his wallet, stuffs things in his cart and, pays the bill and walk away. On almost every occasion, he doesnt know the name of any person in the store nor does the person behind the counter know what the customer name is, the relationship is so impersonal. Do you want such stores in our country? So, 51% FDI in retail business in 53 big cities is like adopting a new culture of doing business. Impersonalised culture has already replaced personalised culture in many cities and things are getting bad to worse and yet the common Indian man prefers personalised store more than impersonalised ones. Government doesnt wish to consider this subtle difference of the economic system in the retail sector. Government says FDI will control food inflation, I wonder how are they interconnected to each other. There's no proof that FDI in retail will control inflation, hence this claim lacks credibility. Nothing Against WalMart or Any Other American Company: It has nothing to do against WalMart or Carrefour or Tesco or any other multinational. This is only offering a reasoning why 51% FDI is not welcome in Indian conditions. Theres absolutely nothing wrong in learning good things from anybody, we shouldnt weigh profit and loss only in terms of money, which government is at present doing. However, advocates of this idea would say that WalMart, Carrefour and Tesco and others would only operate in 53 major cities where a personalised system of doing business doesnt work, but this argument is hollow and has little substance. Major Indian cities, too, are made up of smaller neighbourhoods where still a nukkad like atmosphere exists and its not vanished completely yet, where a Mr Mishra knows Mr Gupta and Mr Gupta knows Mr Tripathi and where marriages and deaths are matters of everybodys concern. Mega stores may have certain advantage but the weight of lost advantages would be more than the weight of advantages gained, hence the 51% FDI in retail business is not welcomed. We dont want Indian culture to die just for the sake of those $590 billion, theres something called humanity and culture that we need to preserve and that means more than money.

Share: Facebook Twitter Google Buzz Myspace MSN Live Yahoo LinkedIn Orkut Digg

Syndicate This Column:

Link to this column

Permalink

COMMENTS
Anonymous | December 9, 2011 - 1 week 2 days

I really do not see the reasoning behind saving the mom and pop retails shops. Many of these shops are not managed properly, you will find expired products lying there, sometimes not clean and not many product choices. The owner of the shop is sitting on the counter and has employees which may be paid not that well at all! So I am really not understanding the reasoning behind "protecting" these shops against FDI retailers. I really feel that its majority and efficiency should always lead the way...if the majority(that is citizens/consumers) feel they benefit shopping at these mom and pop stores they would chose to go there and if they feel they would benefit shopping at FDI supported Retail stores, they would go there. This is exactly like supporting govt. owned industries. We,the tax payer have to support these govt owned companies even though they make losses! These companies make losses due too many reasons like in efficiency, no vision, crap and inefficient employees, non-existent accountability...why should citizens pay for something so lousy! Its like we promote lousiness! We as humans/citizens should always promote constructive growth, efficiency and ethical vision and good of all not protect the good of minority at the expense of inefficiency and marring growth. If there is something which govt. should strive for is eradicating poverty and standard of living of the poor and its citizens. It can start by passing policies and laws which stop

corruption in Govt., then focus of ways to improve infrastructure of the nation, generate employment for poor (not protect business of the minority!)...the list can go on... reply shailesh549 | December 1, 2011 - 2 weeks 2 days

FDI will enslave India and I've no doubt about it, we will lose our freedom of expression with FDI coming in retail, I can't tell right now because it's not been implemented yet, but sooner than later as government is so adamant and have the power and strength to implement it will go ahead and it'll definitely hurt the retail business for sure, you can't ignore the fact that Thailand was so miserably affected with the inclusion of FDI in retail and I see the same thing happening with India. Pro FDI people giving examples like if you need milk you won't go to Walmart you'll obviously go to local grocery shops, by giving such inane examples won't answer the question as to why people are opposing FDI, the present government wants to make India enslave just like East India company did a couple of centuries ago. This is harmful for our economy and it's a high time we think how much foreign participation we should allow in our economy. reply Anonymous | November 30, 2011 - 2 weeks 3 days

Hey guys, cool ....... You actually are diverging from the core issue of the FDI to retailers. FDI stands for Foreign Direct Investments, and even it comes into the picture the PAAN-BIDI stockist may not be affected as others. In such sense the FDI is not the appropriate elective. Please see some graphs about the sharing of income of these multi-brand / single brand companies, you can use google for this, of-course. That will focus who does FDI need !! Are there any scenarios where these actually invest for the development of the manufactures/producers, rather the output (the goods)? So, if you are a businessman or want to be, think about and mind...

As I believe, no one chooses to loose the freedom of trading than off-trade the others and own-self A so called 'employment' reply shailesh549 | November 30, 2011 - 2 weeks 3 days

Don't compare Paan Shops with FDI in retail, your excuse is inane, FDI in retail is not acceptable at present Indian conditions. We need reforms and even I do support that, but that doesn't mean we should bring reforms on things where we can do well without reforms, you see an example of Thailand where 60% of retailers lost their source of income due to FDI in retail, Thailand is a developing country too like India, we can prosper by own first and then allow FDI in retail, at the present moment I don't support it. reply Anonymous | November 30, 2011 - 2 weeks 3 days

I totally disagree with above reasons. Just because of nukkad shop we should not bring big business is insane. I have a shop in authorized govt shopping area but my business is hampered just because people like you opened shops in their home. I suffered just because I followed the right way. Secondly see all the paan shops you'll find all over the places in India. Yes they provide job for some people but how many people are suffering because of those shops. Health problem, messy areas look spitting all over and empty satches of paan masala and growing bad habit of tobaco amoung youngesters. So don't be shellfish and promoto FDI in retail. reply

Foreign Direct Investment in Indian retail sector: An Analysis

Tweet
Published by deepakp118 | December 10, 2011 - 1 week 1 day ago

There have been a lot of furor over introducing foreign direct investment in the Indian retail sector. Many say that the employment opportunity for common man will be dampened and many say that the local retailers will be eliminated from the scene. Many strikes were conducted in the country and the protests by the various groups of shopkeepers kept the reporters busy for many days. What is retail sector? It is the sector that sells the produce to the consumers. In simple words, they form as the intermediates to the producers and consumers. They make profit in the process and maintain the supply and demand in the society. Now what happens if this foreign direct investment is directly introduced in the retail sector.For understanding that you need to know the present rules that govern the foreign direst investment.As per law India allows 51 % foreign investment in the single brand retail sector.while no investment is allowed in the multi-brand sector.In the cash and carry, export products the regulations are much less. So basically this means that at present foreign direct investment in India in single brand products is going on. Indian retail sector have been plagued by the problems of improper public distribution system. Further specially in the cold chain facility sector the wastage of food crops is at its high.Most of the produced food crops have ended up as waste due to the lack of cold chain infrastructure. This problem can be solved to an extant with this decision.this would further help in upgrading our state of the art agriculture sector to newer heights.GDP can be expected to improve with more skilled agriculturists and definitely more tax for the government. The decision to improve our retail sector with more investment from foreign countries can be a milestone in the Indian history. Akbar allowed Britishers to trade in India dome 500 years back.That decision backfired as Britishers finally gained the ultimate power and eliminated the Mughals. Let us hope that this decision to introduce FDI in retail sector does'nt seem to be Britishers in disguise.