Economic zones along coastal belt

One of the prerequisites for Bangladesh to attain the middle-income status by 2021, as targeted, is certainly investment -local or foreign. But private investment which accounts for about 75 per cent of total investment has been stagnating. The proportion of GDP (gross domestic product) has remained in the range of 19 to 20 per cent since 2006. However, structural characteristics of Bangladesh offer immense possibilities for acceleration of investment by both local and foreign investors to serve domestic as well as export markets. The good news is that potential investors have shown renewed interests in investment in the country of late. The just-concluded visit of a high-powered Japanese team of investors ahead of Prime Minister Shinzo Abe's visit early next month is a pointer to this. Even the Chinese investors too have set their sights on the country. India had earlier expressed similar interest.

It is against this background, the government has laudably embarked on a master plan to create special economic zones along the vast coastal belts of the country. Bangladesh has as long as 421 km coastline. If the country's persistent political volatility is any guide, it is indeed a wise decision on the part of the government to set up exclusive economic zones along the coastal belt. Such areas have remained unaffected by political agitations, blockades and strikes and are expected to do so in the future as well. Export-oriented industrial units in coastal areas will have an easy access to the seaports of Chittagong and Mongla. With improved electricity generation and cheaper labour, the proposition has immense merit. Now this decision has to be complemented by good governance in respect of foreign investment. The lingering inaction over the South Korean EPZ has possibly led the Japanese investors to inquire about governance issues while they joined a dialogue with high government functionaries as well as business leaders in the prime minister's office early this week.      

So priority has to be given to formulation of the proposed master plan, considering the 2021 target. Once the plan is framed, a lot of actions will have to be taken to execute it.  After all, attainment of investment at 30-33 per cent of its GDP will be an uphill task if things do not move in the right direction. This is a criterion the World Bank has set for Bangladesh for achieving the middle-income status. According to it, the country will have to raise investment at that level in order to gain economic growth of 7.0 to 8.0 per cent prior to achieving the status. Other criteria are complementary too. The country has a large domestic market because of its large population and reasonably increasing per capita income. The proportion of young and easily trainable population is high.  On the other hand, the country enjoys preferential duty-free market access to many developed countries and, more recently, to some developing countries as well. The country has lost a lot of time in creating a congenial atmosphere for investors and now is the time it responded highly positively and most effectively.