Visits of the Prime Ministers of Bangladesh and Japan to each other's country have enkindled hopes of furthering strong economic ties between Dhaka and Tokyo. Though political diplomacy occupies the centre-stage, economic diplomacy always remains on top. Japan is a very important country for Bangladesh. Tokyo's policies have demonstrated its friendly overtures towards Bangladesh both in political and economic relations.
Japanese investment was thought to be on top but evidence shows its involvement is placed 9th/10th among other countries which have invested in Bangladesh. Japan has been generous with ODA (official development assistance) but its investment in Bangladesh is just the reverse. Every year some of the prospective Japanese investors travel to Bangladesh to explore opportunities but very few take positive decision. Myanmar in our backyard has tied up well with Japan in the recent days to attract investment.
Too cautious mindset of Japanese people sometimes hinders them to invest in a country full of uncertainties. Bangladesh is yet to be explored sufficiently by the Japanese entrepreneurs. So they feel hesitant to add Bangladesh to the list of their investment destination. Creation of a new EPZ (Export processing zone) for the Japanese investors would definitely entice many of them to come to Bangladesh. A new industrial enclave with facilities along with least or no interventions would definitely trigger interest among Japanese investors.
The 2009 report of the Japan External Trade Organisation (JETRO) covering over 40 cities in Asia designated Bangladesh as the cheapest place for investment. The Bangladesh Embassy in Japan may facilitate building relations between Japanese entrepreneurs and their Bangladesh counterparts. Frequent visits to different plants/industries in different cities of Japan, meeting chamber leaders, etc. would surely offer positive result for Bangladesh.
Bangladesh has been doing well in the trading sector. But the two-way trade, amounting about US$ 2.0 billion, favours Japan. Bangladesh's exports too have picked up significantly, amounting to around $ 850 million in 2013-'14 fiscal. But the recently disclosed figure of the Export Promotion Bureau (EPB) said that export earnings from Japan have fallen a little behind the target.
Bangladesh's exports to Japan count over 80 different products but export of readymade garment, leather and footwear items constitutes the lion's share of the increased earnings from Japanese market. Japanese consumers prefer brand items and European items thus come on top always. Colours and fashion designs also change very rapidly. This compels traders to make tiny orders to the exporters. Habits of wearing clothes and outfits change with the change of their four seasons. Bangladesh's garments are familiar to Japanese traders but the Bangladeshi traders stagger to unfold their potentiality due to some reasons. Maximum lead/shipping time, refusal of our exporters in accepting tiny orders, absence of optimum knowledge on Japanese market and their demand, confirmation on each and every product's precision, timely delivery, compliance issues, language barriers, along with other factors hinder Bangladesh from fetching maximum result. Bangladesh seldom participates in trade fairs in Japan though such fairs take place throughout the year. Moreover, discontinuity of participation in the same fairs in the consecutive years saps the possibility of getting orders from buyer groups who inspected the products in the previous year.
Bangladesh enjoys generalised system of preferences (GSP) in Japan. So products can enter the country without paying any duty but faces serious problem due to Non-Tariff Barriers (NTBs). Certification of products is very important; the Bangladesh Standards and Testing Institution ( BSTI) or other certifying agencies are not fully equipped and do not have international accreditation for certifying every product.
Japanese ODA may be sought for equipping our industries with latest machinery and standardising certifying agencies to overcome barriers under NTBs. Thorough examinations are needed for the entry of new products. Products have also to match with the Japan Agricultural Standard (JAS) and the Japan Industrial Standard (JIS) for agricultural or industrial items. Japan has been working with a new drive of China plus One Policy to reduce overdependence on China where Bangladesh could come as a new country as a supply source of exportables.
The writer is the Additional Secretary, the Economic Relations Division and former Commercial Counsellor, Japan. [email protected]
