BIG-B holds out new dev outlook for BD, says JICA president

Bangladesh is now on a new development landscape and able to tap into the growing dynamism and connectivity of the surrounding region to yield greater private sector investment and generate faster growth.

"The new development surrounding the initiation of a grand design like the Bay of Bengal Industrial Growth Belt (BIG-B) aims to unleash Bangladesh's potential and opportunity and I hope many Japanese investors, encouraged by the strong commitment by GOJ, will more focus on this newly emerging market and strong supply base," president of Japan International Cooperation Agency (JICA) Akihiko Tanaka told The FE in an exclusive interview in the city Monday.

He, however, put the thrust that the government of Bangladesh needs to address fundamental infrastructure development.

"Also the soundness and credibility of governance should be enhanced for realising inclusive development."

The JICA president was in Bangladesh to endorse a "comprehensive partnership" to further deepen the ties between Japan and Bangladesh.

Japan has also proposed the formation of Bay of Bengal Industrial Growth Belt (BIG-B) to help Bangladesh realise its huge economic potentials and expedite its growth.

Highlighting the resounding successes of Bangladesh-Japan economic cooperation, Mr Akihiko Tanaka said: I'm proud that JICA has been collaborating with the people and the government of Bangladesh in almost all sectors across the country for 40 years. We have been supporting the earnest effort of Bangladesh to grapple with grinding poverty, frequent natural calamity and inadequate social and economic infrastructure. As a result, Bangladesh is ascending the trajectory of social and economic development and emerging as one of the most promising destinations of foreign investment.

Now, the Japan-Bangladesh bilateral relationship assumes a new level of importance after the two Prime Ministers agreed last month to elevate to a new partnership called "Japan-Bangladesh Comprehensive Partnership." Under this partnership, JICA is eager to enhance its support for Bangladesh to explore its enormous, untapped potential, thereby further strengthening "kizuna" (bond) of the two countries which jointly aspire to peace and prosperity.

Replying to a question on growing official development assistance (ODA) to Bangladesh from Japan, the JICA president said disbursement is considered as a good indicator to assess the implementation progress. The rapid increase in disbursement from 40 million USD in 2008 to 400 million USD in 2013 is surely an encouraging factor for the large commitment in the 35th ODA loan package.  

The two Prime Ministers agreed last month in Tokyo that the future commitment is upon taking fully into account the proper and smooth implementation of projects. Roughly 4 billion USD commitments under 26 ODA Loan projects remained unspent by the Government, including 3 billion USD accumulated in this two years from the 33rd package to the 35th package. The Government of Bangladesh is strongly expected to expedite the implementation to deliver the benefit of the projects to the people as soon as possible.

Replying to a question on Bangladesh's expectation on more Japanese involvement in the ongoing mega projects including Dhaka MRT (mass rapid transit) and Matarbari power plant, he said: We see one of the main causes for failing to meet the original construction schedule or to maintain the quality of infrastructure is poor performance of contractors.

"Thus, it is desirable that qualified competitive companies submit their tenders to the mega infrastructure projects in Bangladesh such as MRT and Matarbari Power Project."

"Since Japanese companies are generally known to be highly competitive in technology with high level of concern for safety as well as contract management, I hope many of them will get interested in those mega projects."

Commenting on the thriving development activities by Japanese experts in rural development or local governance in Bangladesh, the JICA president said PRDP is Japan's long-lasting commitment to Bangladesh development.

A system developed through PRDP, so called "Link Model", targeted to achieve an effective and efficient use of resources by encouraging people's participation to local governments and improving accountability of government officers to people.   

Regarding the assessment of Japan about the Bangladesh Government's own initiative to construct the Padma Bridge with local fund, the JICA president said: We understand that the procurement process is going on by the initiative of the Government of Bangladesh.  JICA is not in a position to make any comment on it.  What I can say is that, from the development perspective, the Padma Bridge is a sine qua non for the country as well as for the regional economy.  I visited the Jamuna Bridge very recently and recognized the importance of building bridge over the major rivers in this country.   

Commenting on the bureaucratic bottlenecks and confrontational politics in Bangladesh, Mr Tanaka said regulatory and procedural issues are the major constraints in investment climate in Bangladesh. For instance, a JICA's study on legal system and procedures for enabling environment found several issues which Japanese investors consider as bottlenecks for their business in Bangladesh. (Those issues are related to regulations on FDI (Foreign Direct Investment), setting up of a company, value added tax, financial regulations, custom duties, a function of one-stop service and so on).   

To cope with this situation, JICA has sent an advisor to the Prime Minister's Office and closely worked with investment-related government authorities. Japan Commerce and Industry Association Dhaka (JCIAD) and JETRO also had a series of discussions with concerned authorities based on JICA's study. Concerned Bangladesh authorities have recently made some improvement on L/C (Letter of Credit) settlement and foreign currency borrowing. I would appreciate such enduring efforts by the Government of Bangladesh and hope to continue this attempt from both sides.   

The above study also found "political risks" including rampant hartal (general strike) and road blockade during last year created negative image of Bangladesh. The 45 per cent of interviewed Japanese companies in the study showed their hesitance to invest or to increase investment under such circumstances.   

It is also true, however, that growing number of Japanese enterprises is still showing their keen interest in Bangladesh despite these challenges mentioned above.  Following this trend, the number of Japanese enterprises doing business in Bangladesh has increased from 70 in 2009 to 176 in 2014.

On bilateral cooperation in tackling the impact of climate change in Bangladesh, the JICA president said JICA has assisted more than 70 projects with total amount over 750 million US$ for disaster risk reduction since 1974. Regarding the Climate Change Adaptation, JICA has gone to Food Security, Flood Management, Cyclone risk mitigation, safe water supply and so on. Among them, five meteorological radar stations which cover whole country and enable to do early warning to cyclones from the Indian Ocean.

The construction of 117 multipurpose cyclone shelters has reduced cyclone risk in coastal region. Among the 35th Yen Loan Package, JICA is going to assist on flash flood management in the Northeastern Haor area where 7.0 million vulnerable farmers and fishermen will get benefit from sustainable agriculture and fishery activities.

Highly efficient and environment-friendly technology of Japan contributes reduction of greenhouse gas emissions.

JICA promotes an efficient use of energy in the field of power production, reduction of power system loss and renewable energy. The Matabari Ultra Super Critical Coal-Fired Power Plant committed in the 35th ODA Loan Package will enable the highest thermal efficiency in the world, and far less CO2 and NOx/SOx emission than conventional ones.