Policy to transform EPZs into special economic zones soon
Thursday, 5 July 2007
FE Report
The government will formulate a policy besides devising a regulatory framework to help strengthen public-private partnership in the development and management of economic zones on a larger scale, industries adviser Geeteara Safiya Choudhury said Wednesday.
She, however, underscored the need for social and environmental safeguards while designing the new generation zones that will transform the traditional publicly-managed industrial parks.
But a local economist called upon the caretaker government to leave room for public debate before rushing implementation of special economic zones.
"We would like to create the policy and regulatory framework that will allow public-private partnerships in zone development and management," Geeteara told the opening session of a workshop, jointly organised by the Board of Investment and the World Bank at a city hotel. The workshop was organised in connection with the launching of the World Bank report "Piloting reform through the development and management of economic zones."
"So we welcome the constructive inputs from private entrepreneurs---domestic and foreign--and our development partners who can advise on appropriate framework and assist us with infrastructure development," she noted.
It requires establishment of proper policy framework for transforming the state-run export processing zones (EPZs) into special economic zones in the light of successes in Jordan, Dominican Republic, Dubai and China.
The government-run EPZs in Bangladesh have been successful in netting nearly $1.1 billion in investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment, according to official statistics.
But the impact of EPZs and industrial estates remain "modest", she said, insisting that the scale of impact could be much larger if the economic zone regimes were better equipped to meet the needs of new investments.
Stressing on the sustained industrial growth, the industries adviser said options for re-locating industrial units from within the major cities, especially Dhaka, to the adjacent areas will be useful.
"This will also provide room for growth of industries in some of the potentially dynamic regions outside Dhaka and Chittagong, such as Bogra, Jessore or Comilla," she said.
In his speech, country director of the World Bank Xian Zhu said advance planning and a clear roadmap along with a partnership between the public and private sector could result in more "holistic" and "geographically balanced" industrial growth in Bangladesh.
"Land is Bangladesh's scarcest resource and zones might be good way to ensure that it is used productively and efficiently," said the bank's local chief.
Zhu held out the assurance that his bank would continue to support the government and private sector in providing infrastructure assistance for developing zones and advise on the right policies to capitalise on the investments.
Executive chairman of the BoI Nazrul Islam said economic zones are important for investment not only because they provide infrastructural services and serviced land, but also because they can be the vehicle for other services.
"When a critical mass of enterprises is co-located, it becomes easier for service providers to provide the services cost-effectively. We could envision facilities such as common effluent treatment plants, quality control, labs, logistical facilities, social amenities for workers etc., in or around zones," the BoI chief told the meeting.
Islam said zone policy requires a systematic approach starting with a clear strategy.
"Encouragement of public-private partnership, adoption of commercial principles and capacity-building of the relevant agencies are also central to the success of zones," he added.
James Crittle, head of IFC Bangladesh Investment Climate Fund, noted that special economic zones could play an important role in ensuring a more geographically balanced industrial growth in the country.
Speaking at a working session, Hossain Zillur Rahman, chairman of the private research group Power and Participatory Resource Centre (PRC), said there is a need for "thorough" public debate before implementation of the SEZs.
Referring to the example of India, where the experience of developing larger zones is not so encouraging, the economist said the SEZs should be linked with the local economy, as the domestic market, with a growing middle class, has become an important driver of Bangladesh's growth.
He left open a question whether the zone policy is only for growth or a pro-poor growth agenda.
Zaidi Sattar, a senior economist at the World Bank, however, differed with the views of PPRC chief, saying that the domestic market is limited by scope, the entire world market is open to be exploited.
"Only domestic market is not enough … The best approach is the neutrality for domestic market and export market," the bank economist told the session.
Sattar, who moderated the session, said the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of larger economic zones would be "much greater" compared to those of traditional industrial parks.
"The new generation zones will be deeply integrated with the economy as a whole," he quipped.
The government will formulate a policy besides devising a regulatory framework to help strengthen public-private partnership in the development and management of economic zones on a larger scale, industries adviser Geeteara Safiya Choudhury said Wednesday.
She, however, underscored the need for social and environmental safeguards while designing the new generation zones that will transform the traditional publicly-managed industrial parks.
But a local economist called upon the caretaker government to leave room for public debate before rushing implementation of special economic zones.
"We would like to create the policy and regulatory framework that will allow public-private partnerships in zone development and management," Geeteara told the opening session of a workshop, jointly organised by the Board of Investment and the World Bank at a city hotel. The workshop was organised in connection with the launching of the World Bank report "Piloting reform through the development and management of economic zones."
"So we welcome the constructive inputs from private entrepreneurs---domestic and foreign--and our development partners who can advise on appropriate framework and assist us with infrastructure development," she noted.
It requires establishment of proper policy framework for transforming the state-run export processing zones (EPZs) into special economic zones in the light of successes in Jordan, Dominican Republic, Dubai and China.
The government-run EPZs in Bangladesh have been successful in netting nearly $1.1 billion in investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment, according to official statistics.
But the impact of EPZs and industrial estates remain "modest", she said, insisting that the scale of impact could be much larger if the economic zone regimes were better equipped to meet the needs of new investments.
Stressing on the sustained industrial growth, the industries adviser said options for re-locating industrial units from within the major cities, especially Dhaka, to the adjacent areas will be useful.
"This will also provide room for growth of industries in some of the potentially dynamic regions outside Dhaka and Chittagong, such as Bogra, Jessore or Comilla," she said.
In his speech, country director of the World Bank Xian Zhu said advance planning and a clear roadmap along with a partnership between the public and private sector could result in more "holistic" and "geographically balanced" industrial growth in Bangladesh.
"Land is Bangladesh's scarcest resource and zones might be good way to ensure that it is used productively and efficiently," said the bank's local chief.
Zhu held out the assurance that his bank would continue to support the government and private sector in providing infrastructure assistance for developing zones and advise on the right policies to capitalise on the investments.
Executive chairman of the BoI Nazrul Islam said economic zones are important for investment not only because they provide infrastructural services and serviced land, but also because they can be the vehicle for other services.
"When a critical mass of enterprises is co-located, it becomes easier for service providers to provide the services cost-effectively. We could envision facilities such as common effluent treatment plants, quality control, labs, logistical facilities, social amenities for workers etc., in or around zones," the BoI chief told the meeting.
Islam said zone policy requires a systematic approach starting with a clear strategy.
"Encouragement of public-private partnership, adoption of commercial principles and capacity-building of the relevant agencies are also central to the success of zones," he added.
James Crittle, head of IFC Bangladesh Investment Climate Fund, noted that special economic zones could play an important role in ensuring a more geographically balanced industrial growth in the country.
Speaking at a working session, Hossain Zillur Rahman, chairman of the private research group Power and Participatory Resource Centre (PRC), said there is a need for "thorough" public debate before implementation of the SEZs.
Referring to the example of India, where the experience of developing larger zones is not so encouraging, the economist said the SEZs should be linked with the local economy, as the domestic market, with a growing middle class, has become an important driver of Bangladesh's growth.
He left open a question whether the zone policy is only for growth or a pro-poor growth agenda.
Zaidi Sattar, a senior economist at the World Bank, however, differed with the views of PPRC chief, saying that the domestic market is limited by scope, the entire world market is open to be exploited.
"Only domestic market is not enough … The best approach is the neutrality for domestic market and export market," the bank economist told the session.
Sattar, who moderated the session, said the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of larger economic zones would be "much greater" compared to those of traditional industrial parks.
"The new generation zones will be deeply integrated with the economy as a whole," he quipped.