Economists mainly blamed the government's negotiation skills with prospective foreign investors and increase in profit repatriation for the situation.

In FY06, $675 million FDI flowed in against $800 million in FY05, showing a $125 million dip, BB statistics shows. In FY05, FDI flow was $415 million more than the previous fiscal.

"The government failed to negotiate with prospective foreign investors," Dr Zaid Bakht, research director of the Bangladesh Institute of Development Studies (BIDS), told The Daily Star yesterday .

Dr Bakht referred to the power projects, which had huge scopes for foreign investment but the government could not exploit the opportunity .

"Negotiations with prospective foreign investors have been delayed mainly due to the vested groups' ill motives to make brisk money from the deals that resulted in no investment," he said.

He also said profit repatriation in last fiscal year increased, which may be another reason for the FDI inflow

"A large chuck of FDI that came in the last few years was in the telecoms sector. These investors repatriated their profit instead of reinvesting it," he said.

Khondaker Golam Moazzem, research fellow of the Centre for Policy Dialogue (CPD), echoed Dr Bakht to say that there no big foreign investment took place in Bangladesh since 2001.

"FDI increased in FY05 as service sector foreign investors reinvested their earnings, but such reinvestment declined in the last fiscal year resulting in an increase in profit repatriation," he explained.

He said foreign investors are also in a dilemma about fresh investment as the country is now passing through a transition period and a general election is approaching.

"Investors will prefer to observe the situation and wait until the election is over before fresh investment," he said.

Moazzem referred to the negotiation process with the Indian industrial giant Tata and said such an approach of the government sent a negative signal to other prospective foreign investors.

Bangladesh Bank data show the investors repatriated $175m in profit in 2001, while figure was $195m in 2002, $355m in 2003, $338m in 2004 and $418m in 2005. Between January and May this year, investors repatriated $180 million.

According to the Board of Investment (BOI), investment in telecommunications sector claim 36 percent of the total FDI, textiles 18 percent, chemical industries 7 percent, oil companies 18 percent, banks 10 percent and power companies 2 percent.