Govt considers ‘special’ facilities to stop Samsung departure

The government is considering offering a set of 'special' sweeteners to the South Korean technology giant Samsung as it wants the company to stay in Bangladesh, officials said.
An increased limit for international financial transaction and providing cheaper office space  are among the facilities the government considers offering so that it doesn't flee to neighbouring India to lower costs.
The consideration comes in response to the Korean conglomerate's demands it placed to the ICT division under the ministry of posts, telecommunications and information technology.
"We're ready to provide some special facilities to the world's leading company to encourage it to continue its business operation in the country," SM Ashraful Islam, an additional secretary of the ICT division, told the FE.
Last month, top officials of the company and Korean ambassador in Dhaka had meetings with the ICT state minister Zunaid Ahmed Palak and discussed its demands.
"Following their demands, we've approached the ministry of finance and the central bank to consider increasing the existing ceiling of the financial transaction for Samsung," he said.
According to the Bangladesh Bank rules, an individual can conduct international transaction worth $100 daily online and no more than $1,000 annually.
But Samsung said this amount is very low for the company officials as they frequently require getting licences and buying research-related materials from abroad.
The company also said its employees need to travel abroad frequently for attending trainings, seminars and workshops, but they cannot take the required amount because of the restrictive policy
According to the BB's guidelines, for overseas workshops, seminars and trainings, an individual can spend daily $200 (in SAARC countries including Myanmar) and $250 (rest of the world) for their expenditures.  
Contacted, BB's deputy director Mokter Hossain told the FE that there was a provision for permitting higher amount, if required by a participant, but he or she must obtain prior permission from the central bank with additional documents in support of their expenditures.
"Release of foreign exchange beyond the above mentioned indicative limit will be allowed by Bangladesh Bank upon submission of requests supported by documented proof of the expenses," says the BB guidelines.      
Regarding the infrastructure, the ministry official said the ministry is also considering providing suitable space at a reduced price.
"We've already proposed the company set up its research unit at Jamuna Future Park in the capital," said another official, who is not authorised to speak to the media.
The company's research unit Samsung R&D Institute Bangladesh Ltd (SRBD) is considered the first of its kind by a multinational corporation in the country with around 500 employees, of which 95 per cent are professional engineers.
Currently, the company is operating its research unit at the city's Panthapath area, which the company says "very costly" as it needs to pay Tk165 per square feet monthly rent.
Samsung officials told the ministry that because of the high rental cost, production has become costlier in Bangladesh, compared with neighbouring countries like India.
"To provide low cost space, the ministry is ready to accommodate the company's research unit at the multi-storied Bangladesh Computer Council (BCC) building in the capital," the official noted.
Of the 15-storied BCC building, construction of seven storeys has already been completed and the rest of the work will be done by December this year.
SM Ashraful Islam, also BCC's executive director, said as part of the government's vision to attract foreign investment in the country, they are considering the Samsung proposals.
"The issues are yet to be finalised," Mr Islam said, adding that they have approached the authorities, seeking the facilities on behalf of the company.
He said the government is considering the facilities only for the Samsung's R&D unit to facilitate its research activities in the country.
"We want this leading business conglomerate to stay in this country," the official noted.
When contacted, a high official of the Samsung R&D unit said they recently approached the ministry and placed a set of demands in this connection. The official, however, declined to give further details on the matter.
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