KEPZ and a few foreign investment issues
Tuesday, 12 June 2007
THE administration in Bangladesh is infamous for its habit of foot-dragging on issues of national importance. The country has lost many golden opportunities because of the delay in taking timely decisions. The political leadership and the bureaucracy -- both -- have to share the blame for delaying the right decisions on issues that could have benefited the country immensely. The issues such as granting operating licence to the Korean Export Processing Zone (KEPZ) and Tata's investment proposal are glaring examples of indecisiveness of the administration.
The government in the middle of the nineties granted permission to set up a private EPZ by the Korean investors in Chittagong and subsequently transferred a large area of government land for the purpose against the payment of a sum of Tk 1.0 billion. The Korean investors concerned have also invested substantial amount of money on land development and other facilities necessary for an industrial park. But, for reasons best known to it, the immediate past political government resorted to deliberate delay in the issuance of operating licence to the KEPZ authorities. The Korean investors concerned knocked every door of the government to get the same but without any result. However, the present interim administration late last month issued the necessary operating licence to the Korean investors involved in the development of their own EPZ.
But the operating licence has created more worries than comfort for the KEPZ authorities. For, many prospective investors in this first ever private EPZ have turned to other countries because of the inordinate delay in the issuance of operating licence. These days, the world is wide open for investors. Scores of developing countries are offering attractive incentive packages and other facilities to foreign investors. Except for cheap labour, Bangladesh, to be honest, does not offer anything special to investors compared to other developing countries seeking foreign investment. One may argue that in spite of all the troubles, many foreign investors are finding Bangladesh as an attractive investment destination. But if one looks at the big investment proposals coming to Bangladesh in recent times carefully, one would find that gas- or coal-based ventures are the main area of interest for the investors. The global energy scenario does amply indicate the reasons for such interest in this particular type of investment projects. Bangladesh needs increased foreign investments in textiles, information and communication technology, leather, ceramic and pharmaceutical sectors. But not many investors are getting attracted to these sectors.
However, all is not lost so far as the KEPZ is concerned. While talking to the FE last Saturday on the issue, the ambassador of South Korea in Bangladesh expressed the hope that once a favourable climate is created, foreign investors would start coming to make investment in the KEPZ. The envoy laid particular emphasis on the joint efforts by the government and the KEPZ authorities to attract potential investors. There is every possibility that the foreign investors, who are now considering Bangladesh as a difficult place for doing business, would find within next few years as one of the most attractive investment destinations throughout the world. Once the ongoing political and economic reforms are completed and corruption is brought down to a tolerable level, discipline is bound to be restored in most areas of national life. The problems of port and power are also being addressed by the interim administration with all seriousness. Moreover, whichever political party takes over the rein of the administration next is unlikely to deviate much from the line that is being followed by the caretaker government. In such a scenario, the foreign investors could pin much hope on political stability, improvement in physical infrastructure and lower cost of doing business in this country soon.
The government in the middle of the nineties granted permission to set up a private EPZ by the Korean investors in Chittagong and subsequently transferred a large area of government land for the purpose against the payment of a sum of Tk 1.0 billion. The Korean investors concerned have also invested substantial amount of money on land development and other facilities necessary for an industrial park. But, for reasons best known to it, the immediate past political government resorted to deliberate delay in the issuance of operating licence to the KEPZ authorities. The Korean investors concerned knocked every door of the government to get the same but without any result. However, the present interim administration late last month issued the necessary operating licence to the Korean investors involved in the development of their own EPZ.
But the operating licence has created more worries than comfort for the KEPZ authorities. For, many prospective investors in this first ever private EPZ have turned to other countries because of the inordinate delay in the issuance of operating licence. These days, the world is wide open for investors. Scores of developing countries are offering attractive incentive packages and other facilities to foreign investors. Except for cheap labour, Bangladesh, to be honest, does not offer anything special to investors compared to other developing countries seeking foreign investment. One may argue that in spite of all the troubles, many foreign investors are finding Bangladesh as an attractive investment destination. But if one looks at the big investment proposals coming to Bangladesh in recent times carefully, one would find that gas- or coal-based ventures are the main area of interest for the investors. The global energy scenario does amply indicate the reasons for such interest in this particular type of investment projects. Bangladesh needs increased foreign investments in textiles, information and communication technology, leather, ceramic and pharmaceutical sectors. But not many investors are getting attracted to these sectors.
However, all is not lost so far as the KEPZ is concerned. While talking to the FE last Saturday on the issue, the ambassador of South Korea in Bangladesh expressed the hope that once a favourable climate is created, foreign investors would start coming to make investment in the KEPZ. The envoy laid particular emphasis on the joint efforts by the government and the KEPZ authorities to attract potential investors. There is every possibility that the foreign investors, who are now considering Bangladesh as a difficult place for doing business, would find within next few years as one of the most attractive investment destinations throughout the world. Once the ongoing political and economic reforms are completed and corruption is brought down to a tolerable level, discipline is bound to be restored in most areas of national life. The problems of port and power are also being addressed by the interim administration with all seriousness. Moreover, whichever political party takes over the rein of the administration next is unlikely to deviate much from the line that is being followed by the caretaker government. In such a scenario, the foreign investors could pin much hope on political stability, improvement in physical infrastructure and lower cost of doing business in this country soon.