Investments in EPZs and SPZs
Saturday, 27 October 2007
THE country's exclusive export processing zones (EPZs) have been doing better in respect of new investments in them than the areas outside of these special zones. The investments in the EPZs are largely from foreign investors although local investors do also establish industries in the EPZs to benefit from the various facilities offered. Among the advantages are improved availability of various utility services in the zoned areas and watchful attendance of security bodies and the presence of other infrastructures to facilitate investments. Thus the EPZs have grown in number and more are in the establishment phases. They have no doubt helped to raise production and exports from Bangladesh, to transfer technology, provide employment increasingly to local workers and make a contribution towards government's revenue earnings. The Chairman of the Bangladesh Export Processing Zone (BEPZA) authority stated at a press conference in the city Tuesday that new investment proposals to the tune of US$ 1.0 billion in the EPZs were expected in the current fiscal year. However, the actual receiving of this investment will depend on the processing of the investment proposals in time and also on making operational fast the would-be EPZs. Most of the established EPZs are short of spaces and new enterprises can be accommodated smoothly mainly after the completion of expansion and development programmes relating to EPZs.
The EPZs in Bangladesh have no doubt played a part in drawing mainly foreign investors and contributing to the country's export earnings. But now thoughts are being expressed also about the setting up of special economic zones (SEZs). The same was recommended in a recent workshop jointly organised by the World Bank and the Board of Investment. The EPZs are located on public lands and government remains responsible for supplying and maintaining various utility services in them. The investors in these zones remain largely free to carry out their production activities in their own premises within the EPZs. But government in Bangladesh remains constrained for funds and this problem is seen reflected in upgrading or expanding the physical facilities of the EPZs. Utility services in the EPZs such as power and water supplies, security services, etc., are found stressed though every effort is usually made to provide the best services to them.
Thus, to overcome these operational difficulties, the concept of the SEZs was mooted. Government, of course, would continue to have some control in the establishment and management of the contemplated SEZs. But these are perceived to be mainly self-sufficient bodies generating their own power and other facilities for smoother operations. There are many entrepreneurs in the neighbourhood of Bangladesh such as in the south-east Asian countries, China and Japan, who are on the lookout to relocate some of their industries to countries where the wage differentials could help their competitiveness. With the SEZ model taking off, a great deal of these investments can come Bangladesh's way, fairly soon, motivated by streamlined facilities at these zones and the prospect of finding cheap labour.
The SEZs, properly guided and developed, hold out the prospect of rapid expansion of investment operations in the country. The transformed zones can be ideal places of investments not only for the foreign investors but also local ones. 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. The booming SEZs should be a lucrative source of employment and earnings for the local population; the same should prove to be a training ground for local workers in new technologies as well as for technology transfer.
The EPZs in Bangladesh have no doubt played a part in drawing mainly foreign investors and contributing to the country's export earnings. But now thoughts are being expressed also about the setting up of special economic zones (SEZs). The same was recommended in a recent workshop jointly organised by the World Bank and the Board of Investment. The EPZs are located on public lands and government remains responsible for supplying and maintaining various utility services in them. The investors in these zones remain largely free to carry out their production activities in their own premises within the EPZs. But government in Bangladesh remains constrained for funds and this problem is seen reflected in upgrading or expanding the physical facilities of the EPZs. Utility services in the EPZs such as power and water supplies, security services, etc., are found stressed though every effort is usually made to provide the best services to them.
Thus, to overcome these operational difficulties, the concept of the SEZs was mooted. Government, of course, would continue to have some control in the establishment and management of the contemplated SEZs. But these are perceived to be mainly self-sufficient bodies generating their own power and other facilities for smoother operations. There are many entrepreneurs in the neighbourhood of Bangladesh such as in the south-east Asian countries, China and Japan, who are on the lookout to relocate some of their industries to countries where the wage differentials could help their competitiveness. With the SEZ model taking off, a great deal of these investments can come Bangladesh's way, fairly soon, motivated by streamlined facilities at these zones and the prospect of finding cheap labour.
The SEZs, properly guided and developed, hold out the prospect of rapid expansion of investment operations in the country. The transformed zones can be ideal places of investments not only for the foreign investors but also local ones. 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. The booming SEZs should be a lucrative source of employment and earnings for the local population; the same should prove to be a training ground for local workers in new technologies as well as for technology transfer.