Shahiduzzaman Khan
Shortage of land is constricting the inflow of foreign direct investment (FDI) to the country. Those foreign investors who are knocking at the door, are unable to find land at appropriate locations. This has become increasingly evident in the context of Bangladesh as its population growth has led to demographic pressure on the land. The issue was rightly highlighted at the IGC South Asia Growth Conference 2012 held in the capital this week.
Bangladesh received a record $1.3 billion FDI in 2011-12. But the amount was still poor compared to other countries. Poor infrastructure and energy-related problems are impacting FDI flow. But the scarcity of land is becoming more important in this context. The government is trying to find a solution to this problem by establishing seven special economic zones (SEZs). It is difficult to say at this stage whether the communication and other logistics support facilities in such SEZs will be attractive enough for the investors.
Bangladesh has the potential to attract US$ 4.0 to 5.0 billion a year. But it is failing to do so due to lack of necessary utility services, land and confidence. Had there been an investment-friendly environment, coupled with availability of other required facilities and stable tax policies, Bangladesh could have otherwise been a lucrative locational site for the foreign investors.
As of now, the actual and potential investors are yet to be assured of basic prerequisites -- infrastructure facilities, gas and electricity, land and a favourable regulatory regime - for making investments in Bangladesh. Recently, a good number of foreign investment proposals were reported tuned out by the authorities concerned due to non-availability of land. Most such proposals came from China as a part of the relocation plan of the investors from there, according to a report.
Political unrest, infrastructures and power supply problem are not as critical problems for investment in Bangladesh as that of land scarcity. Investors now only look for land as they can set up the rest of the infrastructure at their own initiatives. Many Chinese investors want to relocate their factories to countries like Bangladesh due to soaring labour cost in their homeland. The country needs to cash in such opportunities as soon as possible otherwise FDIs would go to other Asian countries such as Indonesia, Vietnam, Malaysia and Myanmar.
On an average, three investment proposals are reportedly being submitted to the BoI daily. But the authorities concerned are now failing to entertain those as they have no plots of vacant land suiting the investor's demand. The government has planned to start SEZs to improve the country's competitiveness as an attractive investment destination, instead of going for setting up any new export processing zone (EPZ). Bangladesh Export Processing Zone Authority (BEPZA) is unable to accommodate fresh investment proposals due to dearth of plots.
But the problems of land scarcity and also that of its affordable cost will present a daunting challenge for operatrionalising the SEZs at the earliest. Enforcement of stringent control over effective use of land and its registration across the country is, meanwhile, considered an urgent need for its planned future urbanisation and industrialisation. A national land use plan needs to be put in place for all future economic activities. Planned and compact housing facilities should take place on controlled land use across the country. Long-term plan and integrated approach are important for an effective land use plan in the country.
There had been much of rhetoric on rules and regulations for land use for promoting people's well-being in the past. But nothing has materialized so far on this count for a variety of known and unknown reasons. There had also been much talks on equitable distributing 'khas' land among the poor, increasing land productivity, implementing settlement act, acquisitioning land in excess of ceiling, recovering land under absentee ownership, modernising land administration and improving land management methods and practices but in reality nothing has happened.
Besides, process of industrialisation in the countryside in a haphazard and unplanned has not only caused loss of large croplands and water bodies but also polluted environment as these industrial establishments lack mechanism for treatment of effluents and wastes.
The country needs both arable and industrial lands for its sustained development. The agriculture sector is worst affected as it is losing land to the industrial sector. Net loss of agricultural land is an issue of great concern. Expansion of industries vertically rather than horizontally can be considered a viable approach to address the problem of shrinkage of farm land. But that is not happening.
Yet some quarters believe that it is not the land shortage but unplanned and whimsical practices of the government which are the major reasons for inefficient uses of land. Many countries around the world have managed their scarce land very efficiently and attracted FDIs to their desired level. Other countries with a similar situation like that of Bangladesh -- having small land area with high density of population - have addressed this problem successfully. The country's own researchers can help devise a home-grown long-term strategy to solve the problem.
In fact, land management and not the land shortage is the real problem for Bangladesh. Singapore and Hong Kong have emerged as major FDI destinations despite their scarcity of land. And they have also put a befitting emphasis on reclamation of land. Bangladesh could be an attractive FDI destination, in reality, if the problem of land management is addressed efficiently.
szkhan@dhaka.net
Land management is the real problem
FE Team | Published: July 19, 2012 00:00:00 | Updated: February 01, 2018 00:00:00
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