Building the special economic zones
Monday, 13 December 2010
Enamul Haque
The export processing zones (EPZs) in Bangladesh have proved to be useful drawing investors, particularly from abroad, and contributing to the country's export earnings. But for some time thoughts were expressed about the setting up of special economic zones (SEZs). The idea has reportedly had strong donor support. On this part, the government passed the Bangladesh Economic Zone Bill, 2010 that envisages the establishment of some economic zones in the country. Some of these, as the reports said, are likely to be entirely government owned and operated like the EPZs. But most of the others will, as media reports suggest, be privately owned or to be a mix of government and private ventures. Notably the economic zones would not be restricted to only export oriented industries but production of all kinds of goods and services targeting consumers within the country as well as outside of it.
The net aim of all such efforts is to set up these economic zones that would help increase the production of all types of goods and services under secure and favourable conditions in every sense of the term to boost industrialization and generate greater employment opportunities.
The EPZs are located on public lands and government remains responsible for supplying and maintaining various utility services to them. The investors in these zones remain largely free to carry out their declared production activities in their own premises within the EPZs. But there are also noted difficulties in such management practices. Government in Bangladesh remains constrained for funds and this problem is seen reflected in the reported move to set up different types of economic zones where government's role would be limited.
Government, of course, would continue to have some control in the establishment and management of special economic zones to be set up in accordance with the newly adopted bill. But these are perceived to be mainly self-sufficient bodies generating their own power and other facilities for smoother operations. Investments in special economic zones under the new mode look prospective because many entrepreneurs in the neighbourhood of Bangladesh such as in the south-east Asian countries, China and Japan, are on the lookout to relocate some of their industries to countries where the wage differentials could help their competitiveness. Bangladesh is considered to be one such destination.
With the new model of special economic zones taking off, a great deal of such investments can be attracted to Bangladesh, fairly soon, being largely motivated by streamlined facilities at these zones and the prospect of finding cheap labour.
Properly guided and developed, the economic zones hold out the prospect of rapid expansion of investment operations in the country. With the fetters of excessive bureaucratic regulations gone, these zones would be in a position to benefit from maximum self-help and the same in turn would facilitate more and more investments in them. Foreign investors particularly are likely to set up their own state of the art facilities such as in the area of power generation.
The same happening will ease pressures on the stressed public utility services. These economic zones can be a lucrative source of employment and earnings for the local population; the same should also prove to be a training ground considerably for local workers in new technologies as well as for technology transfer.
But everything would depend on how neatly the basics of materializing these zones are tackled by the government.
The export processing zones (EPZs) in Bangladesh have proved to be useful drawing investors, particularly from abroad, and contributing to the country's export earnings. But for some time thoughts were expressed about the setting up of special economic zones (SEZs). The idea has reportedly had strong donor support. On this part, the government passed the Bangladesh Economic Zone Bill, 2010 that envisages the establishment of some economic zones in the country. Some of these, as the reports said, are likely to be entirely government owned and operated like the EPZs. But most of the others will, as media reports suggest, be privately owned or to be a mix of government and private ventures. Notably the economic zones would not be restricted to only export oriented industries but production of all kinds of goods and services targeting consumers within the country as well as outside of it.
The net aim of all such efforts is to set up these economic zones that would help increase the production of all types of goods and services under secure and favourable conditions in every sense of the term to boost industrialization and generate greater employment opportunities.
The EPZs are located on public lands and government remains responsible for supplying and maintaining various utility services to them. The investors in these zones remain largely free to carry out their declared production activities in their own premises within the EPZs. But there are also noted difficulties in such management practices. Government in Bangladesh remains constrained for funds and this problem is seen reflected in the reported move to set up different types of economic zones where government's role would be limited.
Government, of course, would continue to have some control in the establishment and management of special economic zones to be set up in accordance with the newly adopted bill. But these are perceived to be mainly self-sufficient bodies generating their own power and other facilities for smoother operations. Investments in special economic zones under the new mode look prospective because many entrepreneurs in the neighbourhood of Bangladesh such as in the south-east Asian countries, China and Japan, are on the lookout to relocate some of their industries to countries where the wage differentials could help their competitiveness. Bangladesh is considered to be one such destination.
With the new model of special economic zones taking off, a great deal of such investments can be attracted to Bangladesh, fairly soon, being largely motivated by streamlined facilities at these zones and the prospect of finding cheap labour.
Properly guided and developed, the economic zones hold out the prospect of rapid expansion of investment operations in the country. With the fetters of excessive bureaucratic regulations gone, these zones would be in a position to benefit from maximum self-help and the same in turn would facilitate more and more investments in them. Foreign investors particularly are likely to set up their own state of the art facilities such as in the area of power generation.
The same happening will ease pressures on the stressed public utility services. These economic zones can be a lucrative source of employment and earnings for the local population; the same should also prove to be a training ground considerably for local workers in new technologies as well as for technology transfer.
But everything would depend on how neatly the basics of materializing these zones are tackled by the government.