Reporting and reconciling FDI process may be improved if Bangladesh Bank is made the sole focal point for collecting FDI-related information with the logistics support from the BoI, a Centre for Policy Dialogue (CPD) review has suggested.

"Data collected under BB survey appear to be methodologically more robust than that of the Board of Investment (BoI)," said CPD in the review titled 'State of the Bangladesh Economy in the Fiscal Year 2004-05' released on Saturday.

Examining questionnaires of both institutions, it is found that BoI collects FDI inflow data only, while BB rigorously collects, besides inflow figure, information on the companies' paid up capital, claims and liabilities, operating profit and net income, and stock of FDI etc, it explained.

Such information available from BB survey allows CPD to cross-

check the authenticity of inflow data. Besides, different monetary units used in the two surveys: 'thousand taka' by BB and 'US$ million' by BoI may create discrepancies during currency conversion, CPD said.

The two institutions also use different reference periods for reporting of data: BB uses fiscal year (July-June), while BoI uses calendar year (January-December), the CPD pointed out.

In the backdrop of significant divergence between the BB and the BoI regarding estimates of FDI inflow to Bangladesh, both the institutions have been publishing FDI data since 2002 based on their respective surveys of foreign enterprises, it added.

Both institutions undertook the surveys because of substantial underreporting in the banking data compounded by definitional problems, it said.

Following publication of their first reports in 2002, it was found that while BB estimated an inflow of $328.3 million in January-

December 2002, BoI put forward a figure of $328.1 million in the same period, indicating an insignificant difference between the two, the CPD mentioned.

Curiously, in the following 2003, 2004 and 2005 years, survey data of both institutions on FDI flow gradually diverged, it added.

It seems that some progress has been made in reporting and reconciling the foreign direct investment (FDI) in Bangladesh since CPD at first pointed out the discrepancy in this regard in 2002, the review added.

It is not obvious which of the institutions has mandate regarding collection of FDI-related data. As such the foreign companies may not feel obliged to provide the solicited information for the BoI, it said.

The central bank also has no direct authority over foreign enterprises other than to make request under the Article 69 of Bangladesh Bank Order, 1972.