The government has finally approved proposals for setting up 17 economic zones (EZs) in the country late last month. After so much of strenuous efforts and drum-beating, the approval was given in the second meeting of the Board of Governors of the Bangladesh Economic Zones Authorities (BEZA).
The board also approved a special stimulus package for attracting both local and foreign investors. Of the 17 EZs, three are private economic zones and one each exclusively for Chinese and Japanese investors.
Some 100 EZs are scheduled to be set up in the country over the next 15 years, creating jobs for some 10 million people and taking the export earnings to $ 40 billion a year, according to reports.
Since the passage of the Bangladesh Economic Zones Act in 2010, there was hardly any work done to facilitate establishment of economic zones across the country. With the approval of the proposed zones, one wonders how much time the government might take to set up such zones.
However, there are fears about the establishment of such zones becoming a long-drawn process as the country is passing through simmering political turmoil now. For any EZ to prosper, infrastructure and political stability are fundamentally important.
None of the proposed EZs has infrastructure like roads, power and gas which are needed for their smooth operation. There is also an issue of protecting the investment made in the zones. Nobody should be under any illusion that because of the incentives package, foreign investors would automatically rush in tens and dozens to Bangladesh.
The 'pious' aim of the economic zones law was to help materialise the Vission-2021 of the long term perspective plan and sixth five-year plan, expedite growth through industrialisation and alleviate poverty and balanced development of the country.
Countries like Vietnam, Myanmar and China have already gone for setting up special economic zones (SEZs) replete with physical infrastructure including power, road and rail links to woo foreign investment. Vietnam has already established 400 SEZs. Recently, Myanmar is making fast progress, to catch the waves of global investors. Bangladesh is lagging far behind in this race.
However, good news is that the country's Board of Investment (BoI) has just introduced full automation of the visa support service, work permit and set up liaison offices aiming to help investors in getting more quality, faster and coordinated services.
Excepting registration, all other jobs were earlier done manually. It took a long time as some cumbersome procedures followed. The prospective investors will now be able to do all the jobs within a few hours compared to about a few months in the existing manual system.
The government believes automation of all these services will further build the investor confidence by facilitating their business and ultimately improve the investment climate in the country. It expects to woo $2.0 billion (200 crore) in the form of foreign direct investment (FDI) in the country in the current year.
In order to attract foreign investors, more things do need to be done. The government should protect their interests. These include reducing taxes and duty structure on services, easing visa and work permit with extension of visa tenure.
However, there is a need for setting up a complete township in the proposed EZs to give workers a better life to them and their families, better access to education and health. Analysts say attracting FDI will not be a problem if the country can set up EZs with all probable facilities.
Despite concerns aired by many critics, the investment environment here remains highly attractive with a large population in the working age group and low labour costs. But still the country is unable to tap its full potential.
The EZs are purported to be running under the concept of public-private partnership (PPP). The government will provide the required land, infrastructures and utilities to the prospective investors. It will allow the private sector to own, develop and manage EZs as well as establish infrastructure and provide commercial services to factories operated in the zones.
Besides export, the manufacturers inside the EZs will be allowed to sell their produce in the local market which is not allowed in case of the Export Processing Zone (EPZs). The idea of EZs differs from the concept of EPZ, as the former offers freedom to investors to cater to the needs of both domestic and global markets beyond concentrating on export markets.
All said and done, the EZs could be a major driver of economic growth and job creation. Also, such zones could be a major factor to lift Bangladesh to a middle-income country status by 2021 The EZs will also make better use of land and other limited resources besides ensuring environmental compliance.
Here there is one pertinent point to note. This relates to the industrial estates of Bangladesh Small and Cottage Industries Corporation (BSCIC). Such estates are in existence in most districts of the country over the decades. A modicum of infrastructural support facilities is already there at such sites. But a large number of such estates have not witnessed growth of industrial units to any notable extent.
As such, the unutilised land that is meant for setting up industries in BSCIC's existing industrial units is considered vast, taking the general problem of land scarcity in this country into account. How far this fact has been taken into consideration, while selecting the feasible sites of the proposed EZs, is not clearly known. Efforts should have been to locate some of the EZs in such industrial estates of the BSCIC where the land area is now being used for anything other than industrial operations.
Meanwhile, it has taken five years for the government to approve 17 zones since the passage of the economic zone law in 2010. If the same speed is now followed with their implementation as well, it will be otherwise difficult for the government to keep pace with the required growth momentum.
Bangladesh will definitely be deprived of substantial overseas investments if EZs are not established with due diligence, replete with all available facilities.
szkhan@dhaka.net
Let EZs be drivers of growth momentum
Shahiduzzaman Khan | Published: March 05, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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