Spl economic zone in Sylhet on the cards
Tuesday, 25 December 2007
FE Report
The government is conducting a feasibility study on the establishment of a special economic zone in Sylhet, eying private capital for the set-up especially from the overseas Bangladeshi nationals.
The study, being carried out by the Board of Investment (BoI), will clear the way for creating the pioneering economic zone project that would be linked to both local and international markets.
"The feasibility study on the proposed Sylhet Special Economic Zone (SEZ) is likely to be completed by January next," a senior official of the Board of Investment (BoI) said.
"Under the study, the consultants employed by the International Finance Corporation (IFC) will select a suitable location, identify investors' needs and estimate the costs of zone development," the BoI official told the FE.
Once developed, the proposed Sylhet Special Economic Zone will be the first of its kind in Bangladesh, to be modeled after similar "successful" zones located in several other countries such as China, South Korea, Dubai, Jordan and Dominican Republic.
The establishment of such new generation zones may also signal the country's radical shift toward modernising its zone regime, now subsidised by the government, BoI officials say.
Unlike the existing publicly owned and managed export processing zones (EPZs), an SEZ will be larger in scale and be linked to the domestic market.
The Sylhet economic zone will be built on the basis of public-private partnership and the government will no longer finance the development costs of such zones, the officials added.
In another development, the BoI is close to finalising the Bangladesh Economic Zone Policy aiming to allow the establishment of economic zones, which are conceptually different from the traditional industrial parks.
The economic zone policy, drafted by the Infrastructure Investment Facilitation Centre, has recommended formation of a zone development agency and an economic zone commission to oversee the future SEZs.
The sources said the local and foreign consultants responsible for conducting the study will also identify demands of potential investors and their priority sectors.
"The SEZ will be developed in such a way that it can really cater to the needs of investors. Otherwise, it is sure to face the same fate as BSCIC-built industrial estates, many of which are lying unutilised," the BoI official stressed.
BoI officials said they have already interacted with representatives of British-Bangladesh Chamber of Commerce and Sylhet Chamber of Commerce and Industry to identify the needs of potential investors.
They noted that the investment board was advancing carefully to avoid the pitfalls of BSCIC industrial estates.
Besides foreign direct investment, officials believe, the proposed Sylhet economic zone will bring in tens of millions of dollars in diaspora investment, thereby generating substantial jobs and boosting the local economy.
Referring to a recent investment promotion meeting in the United Kingdom, officials said Bangladeshi diaspora from the Sylhet region showed their keen interest to invest in real estate, tourism and hospitality, apparel and electronics sectors.
Experts believe the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of SEZ will be much greater compared to those of traditional industrial parks.
According to official statistics, the country's eight EPZs netted nearly $1.1 billion in total 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.
Pointing at the "modest" impact of EPZs and industrial estates, a recent World Bank study report insisted that the scale of impact would have been much larger if the zone regime were modernised.
The government is conducting a feasibility study on the establishment of a special economic zone in Sylhet, eying private capital for the set-up especially from the overseas Bangladeshi nationals.
The study, being carried out by the Board of Investment (BoI), will clear the way for creating the pioneering economic zone project that would be linked to both local and international markets.
"The feasibility study on the proposed Sylhet Special Economic Zone (SEZ) is likely to be completed by January next," a senior official of the Board of Investment (BoI) said.
"Under the study, the consultants employed by the International Finance Corporation (IFC) will select a suitable location, identify investors' needs and estimate the costs of zone development," the BoI official told the FE.
Once developed, the proposed Sylhet Special Economic Zone will be the first of its kind in Bangladesh, to be modeled after similar "successful" zones located in several other countries such as China, South Korea, Dubai, Jordan and Dominican Republic.
The establishment of such new generation zones may also signal the country's radical shift toward modernising its zone regime, now subsidised by the government, BoI officials say.
Unlike the existing publicly owned and managed export processing zones (EPZs), an SEZ will be larger in scale and be linked to the domestic market.
The Sylhet economic zone will be built on the basis of public-private partnership and the government will no longer finance the development costs of such zones, the officials added.
In another development, the BoI is close to finalising the Bangladesh Economic Zone Policy aiming to allow the establishment of economic zones, which are conceptually different from the traditional industrial parks.
The economic zone policy, drafted by the Infrastructure Investment Facilitation Centre, has recommended formation of a zone development agency and an economic zone commission to oversee the future SEZs.
The sources said the local and foreign consultants responsible for conducting the study will also identify demands of potential investors and their priority sectors.
"The SEZ will be developed in such a way that it can really cater to the needs of investors. Otherwise, it is sure to face the same fate as BSCIC-built industrial estates, many of which are lying unutilised," the BoI official stressed.
BoI officials said they have already interacted with representatives of British-Bangladesh Chamber of Commerce and Sylhet Chamber of Commerce and Industry to identify the needs of potential investors.
They noted that the investment board was advancing carefully to avoid the pitfalls of BSCIC industrial estates.
Besides foreign direct investment, officials believe, the proposed Sylhet economic zone will bring in tens of millions of dollars in diaspora investment, thereby generating substantial jobs and boosting the local economy.
Referring to a recent investment promotion meeting in the United Kingdom, officials said Bangladeshi diaspora from the Sylhet region showed their keen interest to invest in real estate, tourism and hospitality, apparel and electronics sectors.
Experts believe the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of SEZ will be much greater compared to those of traditional industrial parks.
According to official statistics, the country's eight EPZs netted nearly $1.1 billion in total 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.
Pointing at the "modest" impact of EPZs and industrial estates, a recent World Bank study report insisted that the scale of impact would have been much larger if the zone regime were modernised.