In the wake of stagnating investment in the country, particularly FDI (foreign direct investment), the government seems agreeable to the proposals of prospective foreign investors for allocation of exclusive zones, either in the export processing zones or proposed specialised economic zones. The visit by the Japanese Prime Minister (PM) accompanying a high-profile investment delegation this week has further triggered the idea of dedicated zones for smooth operations by overseas investors, in prospective fields. The big question now: Is the country really prepared to do so?
The reason why the Japanese investment in Bangladesh is now considered very prospective is that Tokyo is seriously engaged in what is being dubbed China+ policy. Much of the charm of China, the prime habitat of global investment, has, of late, been eroded, particularly in the low-end consumer products, mainly because of the soaring wages. China itself is working on relocating some of its labour-intensive industries to cheap-wage locations in the Asian region. As for Japan, when it comes to China+, the idea is to look for locations preferably in the fast-growing economies in the region capable of offering congenial investment regimes and prospects of cheaper labour. The China+ policy is driven by Japan's current Regional Comprehensive Economic Partnership (RCEP) programme aimed at spreading out investments to suitable South and South East Asian countries. Obviously, the choice for the right investment destination has to be from among Bangladesh, Vietnam, Cambodia and Myanmar. India, given its mega domestic manufacturing base, would prefer not to cause adverse competition for its domestic market from relocated foreign companies in many of the sectors.
The visit of the Japanese PM to Dhaka, preceded by that of the Bangladesh PM to Tokyo little over three months ago, has clear indications that observers, here in Bangladesh or elsewhere, have not missed. Prior to this week's visit, there were visits to Dhaka by a number of high-level trade and business delegates and experts from Japan, who made no bones to make their points clear as they spoke about exclusive zone for Japanese investors, removal of many trade-impeding bottlenecks, incentive schemes to boost investment etc. And finally, the delegation that accompanied the Japanese PM this week comprised high-level representatives from some of the pioneering Japanese companies of international repute. More importantly, the members of the delegation, while in Dhaka, meant business as whatever they talked about centred on investment- probable sectors they like to invest in, facilities they want in place to ease untoward hazards and bottlenecks and so on. The Japanese PM himself expressed the eagerness of his country's business people to undertaking comprehensive investment package in Bangladesh using BIG-B (Bay of Bengal Industrial Growth Belt) as the centrepiece of investment partnership.
That Japan is serious about exploring what Bangladesh can offer to facilitate large-scale Japanese investments has been made loud and clear in the visits of a number of fact-finding missions in recent times. The first of these visits, one may recall, took place in April this year prior to PM Sheikh Hasina's visit to Japan in early May. The second visit took place in June and the last one in August. Meanwhile, the Japan International Cooperation Agency (JICA) is conducting an extensive survey in search of new locations for investment in its study 'Foreign Direct Investment Promotion Study.'
Japan, through its fact-finding missions, has already made known some of its key concerns. While inadequate infrastructure, failings in stable energy supply, lack of transparency, bureaucratic bottleneck etc., are some of the well known difficulties flagged by Japan, attention of the government of Bangladesh has been drawn to a few precise areas as well. It appears much of the investment decisions would depend on clear and steadfast response to the tasks asked for. The most significant among these is the allocation of an exclusive zone, preferably not beyond the distance of an hour's ride from Dhaka with an approximate size of 300 acres having provisions for further expansion. Another requirement, found critically important by an earlier investment delegation, relate to improved facilitation by the BoI (Board of Investment) by bringing all investment-related agencies under its ambit.
Now, agreeing to the proposals is one thing but accomplishing those in steadfast earnestness is another. Abortive initiatives in the past show how often Bangladesh pledged lofty facilities for investors but could not materialise those for lack of firm intent. The Korean EPZ is a glaring example. It is still in shambles and many believe it is the sheer lack of will that has not allowed the exclusive EPZ to become fully operational even after decades.
The government would do well to keep in mind that in earlier times appeals were routinely made to overseas investors in seminars and meetings to come to this country, which went mostly unheeded. The difference with the Japanese case is that this time it is the big corporate houses knocking on Bangladesh's doors to open for them to enter.
wasiahmed.bd@hotmail.com
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