Policies to reform economic zones
Wednesday, 12 December 2007
THERE is no denying the importance of foreign investment for creating jobs and increasing national income. It was not in the remote past, but within recent memory that foreign investment was looked upon with suspicion. The basic premise of such thinking was that the foreign ventures were out to exploit a country's indigenous resources as well as its manpower. From the standpoint of the dominant thinking of political economy, allowing the foreigners and their companies to carry out such activities on one's own soil was not just unfair, it did really imply a serious comprise on one's national sovereignty. The ultimate objective of the overseas capital was to establish colonialism in a new form, it was argued. An ensemble of factors under the post-colonial dispensation was responsible for the development of this generally apathetic attitude towards the entry of foreign capital in a local economy. Strangely though, during only the last three decades this attitude towards capital in general and foreign capital in particular has undergone a radical transformation.
The countries that were first to come out the old prejudice against foreign capital have been able to make the most of the new opportunity that presented itself before the less developed economies of the world. At the beginning when this fresh opportunity to invest abroad with practically no holds barred opened up before the capital-rich economies of the North, they were less choosy about their investment destination than they have grown later on. The miracles of Southeast Asia and their Far Eastern counterparts have been for some time on display to court the countries of non-socialist world including those of South Asia to emulate the former. But as always, this part of the world was not only slow to get the hang of what is going all around, it was also looking rather critically at such developments in its backyard. But other nations with their faster business instincts, regardless of their guiding political economy, as in the case of China, welcomed the opportunity with outstretched hands. The capital rich countries and their business houses did not waste any time to get hold of this windfall. What happened next is history. China is now a global miracle with its economy in hot pursuit of the largest economy of the world, the USA. After China, now it is the turn of another socialist and once staunchly anti-West Vietnam to become the next global success story in utilising foreign capital.
However, like other South Asian nations, Bangladesh has also been gradually warming to this new development. It would, however, not be fair to say that Bangladesh was slow to embrace the new philosophy of self-development with foreign investment. To entice foreign investors, it dedicated a number of spots in the form of economic zones, especially the Export Processing Zones (EPZs) for the overseas investors to come and make use of. Eight such EPZs have been created all over the country. One such spot has especially been created for a particular capital-rich nation, the Korean EPZ or KEPZ, though it is yet to become operational for a variety of unresolved factors. Over and above these arrangements and to expand these facilities further, creation of Special Economic Zones (SEZs) has been proposed. Unlike in the case of the EPZs, the overseas investors in SEZs would be able to sell their products in the domestic market, thereby develop better linkage between local and the international market.
To further expedite and facilitate the process of overseas investment in the country, the government has taken the initiative to reform the management of the industrial zones. To this end, the Board of Investment (BoI) is going to issue an economic zone policy to regulate especially the proposed SEZs. The draft policy includes a suggestion of creating an independent Bangladesh Economic Zone Regulatory Commission (BEZRC) as well as an Economic Zone Development Company (EZDC) to develop yet larger economic zones. All concerned would expect that the policy, upon its approval after further scrutiny, will become operational sooner than later to help achieve its avowed objective.
The countries that were first to come out the old prejudice against foreign capital have been able to make the most of the new opportunity that presented itself before the less developed economies of the world. At the beginning when this fresh opportunity to invest abroad with practically no holds barred opened up before the capital-rich economies of the North, they were less choosy about their investment destination than they have grown later on. The miracles of Southeast Asia and their Far Eastern counterparts have been for some time on display to court the countries of non-socialist world including those of South Asia to emulate the former. But as always, this part of the world was not only slow to get the hang of what is going all around, it was also looking rather critically at such developments in its backyard. But other nations with their faster business instincts, regardless of their guiding political economy, as in the case of China, welcomed the opportunity with outstretched hands. The capital rich countries and their business houses did not waste any time to get hold of this windfall. What happened next is history. China is now a global miracle with its economy in hot pursuit of the largest economy of the world, the USA. After China, now it is the turn of another socialist and once staunchly anti-West Vietnam to become the next global success story in utilising foreign capital.
However, like other South Asian nations, Bangladesh has also been gradually warming to this new development. It would, however, not be fair to say that Bangladesh was slow to embrace the new philosophy of self-development with foreign investment. To entice foreign investors, it dedicated a number of spots in the form of economic zones, especially the Export Processing Zones (EPZs) for the overseas investors to come and make use of. Eight such EPZs have been created all over the country. One such spot has especially been created for a particular capital-rich nation, the Korean EPZ or KEPZ, though it is yet to become operational for a variety of unresolved factors. Over and above these arrangements and to expand these facilities further, creation of Special Economic Zones (SEZs) has been proposed. Unlike in the case of the EPZs, the overseas investors in SEZs would be able to sell their products in the domestic market, thereby develop better linkage between local and the international market.
To further expedite and facilitate the process of overseas investment in the country, the government has taken the initiative to reform the management of the industrial zones. To this end, the Board of Investment (BoI) is going to issue an economic zone policy to regulate especially the proposed SEZs. The draft policy includes a suggestion of creating an independent Bangladesh Economic Zone Regulatory Commission (BEZRC) as well as an Economic Zone Development Company (EZDC) to develop yet larger economic zones. All concerned would expect that the policy, upon its approval after further scrutiny, will become operational sooner than later to help achieve its avowed objective.