FDI growth success

The investments have been in the telecommunications, energy and manufacturing sectors. That FDI is going into infrastructural sector is good news, because it is the poor infrastructure that has been impeding the growth of foreign direct investment. But given the potential, the investment rate should be even higher. In any case, we have a long way to go before being favoured with relocation of 'sunset industries'.

The challenge now is to maintain the momentum of the upward trend. The BOI which has been the target of considerable criticism in the past for not doing enough to garner FDI may have reasons to feel redeemed. They have our kudos, but they can't afford to rest their oars just yet, because we are still stuck with millions, somewhat ironically in a neighbourhood of billions.

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Most important of all, the culture of confrontational politics will have to be discontinued to signal political stability; the high cost of doing business curtailed; and above all, the law and order situation will have to be vastly improved to instill a sense of security in the investors and businessmen. Unless confidence is restored to the law enforcement, justice and financial systems, we cannot get the amount of investment we need to break out of the LDC cycle. In all the areas, we are basically competing with other FDI destinations. To top it all, we have to contend with the expiry of the multi-fibre arrangement (MFA) which poses a double challenge to us, to borrow the UNDP chief Lissner's words -- of sustaining the readymade garments sector and retaining our position as a competitive FDI destination.