Japan plans short, long-term investment in Bangladesh

Japan has planned short-and long-term investment in Bangladesh for the mutual benefits under a newly-designed industrial cooperation framework meant for creating favourable business and trade environment in the country for outbound Japanese investors.
Kei Kawano, the representative of the Japan External Trade Organisation (JETRO) Dhaka office, disclosed this and said that Bangladesh is considered prospective place for setting up diversified industries, including supply chain of big industries.
As many Japanese investors are looking for a country to shift their industries for a competitive market, he said, the JETRO considers the time high to work for a better business environment.
"This is high time to upgrade the diplomatic relationship for better economic benefit of the two countries," the JETRO chief said, adding that the JETRO Dhaka office works here as a facilitator to promote the country for the potential investors.
He spoke of the plans in an exclusive interview with the FE, at a juncture of time when Japan-Bangladesh Public-Private Economic Dialogue has been planned to bring both public and private sectors to a discussion table for the first time.
The dialogue will be held at the Prime Minister's Office (PMO) today (Thursday) with the principal aim of removing barriers identified so far in order to attract foreign direct investment from Japanese companies.
Mr Kawano, also secretary-general of Japanese Commerce and Industry Association in Dhaka, said the dialogue between the private sectors of Japan and Bangladesh has been on since 1980 but outcomes were not so attractive because of lack of actions at government level.
The Japanese business leader hoped that it will help realign the trade policy where regional connectivity between Bangladesh and East Asia will get priority.
Mr Kawano said the Japanese investors have been urged to look to Bangladesh with much longer-term vision as their investments in both China and China-plus countries have suffered for policy and social reasons.
He however admitted that immediate benefit is unlikely to come as Japanese investors do not know much about Bangladesh and they are cautious about investing here now.
"We do not expect sudden surge of the Japanese investment. It is because this country is not ready to receive huge investment," he said.
He noted that Bangladesh has still many challenges, like lack of infrastructure, energy, fund, technology to invite investors, which are to be addressed.
The Japanese government is helping Bangladesh in setting the ground.
However, the JETRO Dhaka representative observed a change has already started in the country's business environment but recommended redesigning tariff structure for getting the economic benefit in the long run.
High interest in domestic credit system and unavailability of raw materials have made investment cost in Bangladesh high. But the investment could reduce the country's dependence on readymade garment-based export industry by diversifying exportable products.
He said redesigning the tariff, foreign currency exchange may not yield immediate benefit in the Bangladesh economy but the industrial growth will benefit the country in the long run.
Bangladesh and Japan have strong natural complementary relationship. The JETRO, which is responsible for developing economic relationship with trade and investment, wants to give drive to upgrade the diplomatic relations.
He observed that Japan has ageing society with low population growth, and its economic growth is almost zero percent which is almost opposite to Bangladesh. It is attractive for 160-million-strong population and a big domestic market which is to expand based on increase in per-capita consumption.
"So Japan and Bangladesh need each other for respective economic growth and we want to materialize it by strengthening the partnership," he said.
Mr Kawano said Japan is confident in contributing to diversification of industries from light engineering to small and medium enterprises which are the main contributors in the supply chain of big industries.
Bangladesh potential in this regard is in manufacturing single parts like fastener, lamps, bulb, automobile spares and so, the Japanese business leader said.