A greenfield investment is a project where foreign investors set up a new business or expand an existing one in a country
Bangladesh has hit the rock bottom in attracting greenfield foreign direct investment (FDI). It ranked as the third worst-performing country in the Greenfield FDI Performance Index 2020.
Bangladesh scored 0.31 in the index, which looked at inbound greenfield investment in 2019 relative to the size of each country’s economy.
A greenfield investment is a project where foreign investors set up a new business or expand an existing one in a country, according to the Bureau of Economic Analysis.
It is the best way to enter a foreign market if the investing company wants to achieve the highest degree of control over foreign activities, says FDI India.
Also read: BB: FDI in Bangladesh fell 20.46% last year
African country Togo topped the list of best-performers in attracting greenfield investment, fDi Intelligence reports.
“Togo’s strong performance in 2019 gained the west African country the crown as the world’s best-performing country relative to its size when it comes to attracting FDI.”
Rwanda, Costa Rica, Mozambique, Serbia, Lithonia, Senegal, Zimbabwe, Georgia, and Singapore also made it to the list of top performers.
However, Bangladesh is attracting much less FDI in proportion to the size of its economy, the fDi Intelligence report says.
The 10 worst-performing nations in the index are Japan, China, Bangladesh, Iraq, South Korea, Norway, Pakistan, the United States, Italy, and Ecuador.
Japan and China stood out as the lowest-performing countries, given the size of their economies, and also for their typical hard and soft barriers to foreign investment.
Of the world’s 10 largest economies, five had an index score above 1 – the UK (2.51), France (1.4), Germany (1.3), India (1.21), and Canada (1.08).
The Greenfield Performance Index uses a methodology devised by Unctad for overall FDI and applies it to only greenfield FDI – excluding mergers and acquisitions, intra-company loans, and other forms of cross-border investment.
To be included in the index, a country must have received at least 10 greenfield FDI projects in 2019.