New EZ law to 'modernise i-parks, fetch higher FDI'

---

A Z M Anas
Efforts to modernise the country's industrial parks (i-parks) will get a boost, as the parliament is expected to railroad a bill to regulate the would-be economic zones (EZ), officials said Saturday.
They said the draft Economic Zone Law 2010, already okayed by the cabinet body, will be placed before the Jatiya Sangsad in a month or two for passage with a provision of creating a new development agency to oversee the zones.
"The bill is likely to be placed before the parliament. This is crucial, as the economy strives to grow higher, and the country seeks to become a middle-income nation in a decade," a senior official at the Industries Ministry said.
Officials expect the economic zone law, if enacted, would enable the country to migrate from the traditional economic zones to new generation ones, thus attracting higher investments.
The fresh move comes after a long-standing impasse over the economic zoning regulations. The Prime Minister's Office (PMO) redrafted the proposed law after annulling the previous one, drafted by the Board of Investment (BoI) in 2008.
Unlike the traditional Export Processing Zones (EPZs), industrial units at the economic zones will be allowed to sell their products to the local market in a move to prop up the domestic economy.
Currently, Bangladesh Export Processing Zones Authority (BEPZA) is regulating the eight publicly-financed EPZs across the country. A special wing at the PMO keeps watch on the Korean Export Processing Zone (KEPZ), a private industrial park, while Bangladesh Small and Cottage Industries Corporation (BSCIC) is managing the smaller industrial estates.
Officials said the proposed development authority would oversee the zones that will be different from the BEPZA.
"The government can acquire land to develop zones, and then, hand those over to investors. The draft law will not give the responsibility of developing zones to any unsolicited investor or company, but the trade or industrial bodies can be allowed to do the job," said another official.
The economic zone policy was first drafted by the BoI, the state investment promotion agency, and then the last caretaker government adopted an Ordinance. But the present government has annulled the Ordinance and tasked the PMO to redraft the law.
A source at BEPZA said the industrial park regulator has managed to retain its authority over the future zones, although the earlier law sought to curtail that.
The World Bank has pushed the government for modernizing the economic zone regime, saying the output of the traditional industrial parks has so far been "minimal".
According to the official figures, EPZs attracted investments worth about $1.1 billion between 1983 and 2005, accounting for nearly 20 per cent of the country's annual exports and 25 per cent of total foreign direct investment (FDI) inflows.
"Our idea is to create small-scale zones like those developed in India, and not the large-scale ones in China," an official said.
China, the United Arab Emirates, Jordan, South Korea, India and Malaysia have speeded up their economic growth through reforming the zone regime.
Experts say although the reform yielded positive results in these countries, the outcome in India is "mixed", as the Indian authorities could not properly manage the land acquisition process.