A scheme taken up whimsically by the past regime on developing 100 economic zones across Bangladesh looks derelict now as the post-uprising interim government decides to proceed with select few key EZs.
This shift in strategy, supported by the new leadership of two investment-promotion agencies, focuses on developing a set of prioritized zones on a fast track with clearly defined timelines.
The deposed government had given approval for establishing 97 economic zones countrywide -- 68 government and 29 private EZs. Feasibility studies, land acquisition and identifying area-specific social and environmental initiatives were initiated for these approved zones.
Ashik Chowdhury, Executive Chairman of the Bangladesh Economic Zones Authority (BEZA), said the Authority will concentrate on a smaller number of government zones to better meet investors' demands.
"We will set specific timelines to address investors' needs in a realistic and achievable way," he adds.
"What investors are looking for is a stable fiscal policy, not just tax cuts."
The zones expected to receive priority include the National SEZ (Mirsarai, Sitakunda and Feni), Jamalpur, Srihatta, Maheshkhali, and Sabrang Tourism Park.
Noted economist Dr Zahid Hussain appreciates the decision to narrow down the number of EZs, but suggests prioritising the investors' preferences on site selection.
"A survey could be done among the investors before selecting the EZ sites to proceed further," he says.
The main mistake of EZ concept was the site selection by the past government where investors are not willing to invest, he notes.
Political preferences and business interests have been the overriding factor in EZ selection rather than looking into investors' desire, the economist further mentions the fault lines in the zoning concept.
"Recently, I met Japanese ambassador to Bangladesh who also conveyed their investors' worry regarding Matarbari zone," he says, adding that the present government should not make the same mistakes.
MA Jabbar, president of Bangladesh Economic Zones Investors Association, deplores that many of the promises have not been addressed, resulting in disappointment of the investors.
"We have taken lease of land and thereafter suddenly we came to know there is 7.0 per cent VAT on it. It was not in the prospectus or investment offers by the government," he told the FE writer.
A land lease for 50 years by investors is supposed to entail VAT.
"The investors have nothing to do but paying VAT to get government support as they have already invested in EZ," he added.
Also, EZ investors have been facing difficulties to get utility connections.
"Uninterrupted power supply to EZs has been a promise from government but it has never taken care of," he said.
Investors are managing their own power supply which is also subject to tax payment.
Lack of due diligence at right time and efficient officials was also not addressed during the previous regime.
"Law and order, uninterrupted power supply, road infrastructure and other utilities are our demands," he also said.
"Recently, we met BEZA chair and found him very promising. We need a right leader in EZ," he added.
They want to work together with BEZA to build image of the authority as well as develop skilled manpower.
Meanwhile, BEZA has adopted a fast-track process for refunding the signing deposits of investors who have opted not to proceed at this time. Officials stated that returning these funds would help free up land for new investors, given the high demand.
An official notes, "Many new investors are showing interest, and we need to make land available to meet this demand."
Currently, the National Special Economic Zone alone hosts 56 active investors. BEZA aims to prioritize improvements in utility connections and road infrastructures across the five main zones while identifying gaps that have previously led to investor dissatisfaction.
Officials say the BEZA has also moved to fully adopt the d-Nothi system to ensure transparency. It has strengthened the one-stop service offering online services as much as possible.
BEZA and BIDA are also working with a synergy on policy issues. Both the authorities have also taken steps to beef up security in the economic zones.
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