Sustaining the economic zones

At a time when anarchy is routinely doing the rounds, the decision to set up 17 economic zones including a couple of dedicated zones for Chinese and Japanese investors and another three zones to be run by private entrepreneurs, came as no little surprise.
Populism or whatever, the decision has significant ramifications, and it goes well with what prospective Japanese and Chinese entrepreneurs were reportedly asking for. In fact, the government was also contemplating for sometime to generously expand the base of special economic zones (SEZs) across the country. The approved economic zones are mostly in the vicinity of greater Dhaka, Chittagong and Barisal districts. Those earmarked exclusively for the Chinese and Japanese investors are at Anwara and Sripur respectably. The government is reportedly in the process of setting up some 100 economic zones in the country over the next 15 years, with the target of creating jobs for approximately ten million people, along with a projected export earning of $ 40 billion from these zones a year.
With the decision, the government has drawn a road map, implementation of which will be challenging if not daunting. There were talks for quite a while on the expansion of the country's export processing zones (EPZs) and finding out new locations for setting up new EPZs. The emphasis on economic zones, a similar but wider concept not necessarily confined to manufacturing for exports, has received attention in many countries.
In our region, India is a pioneer in setting up special economic zones (SEZs) with adequate facilities and has been rewarded by the success of the zones in export growth, increased sourcing of local materials and a boost in job creation. SEZs in India initially functioned under the provisions of the country's foreign trade policy, and fiscal incentives were made effective through the provisions of relevant statutes. Subsequently, Special Economic Zones Act-2005 was passed in the Indian parliament in 2005 and rules governing operation of the SEZs were also framed.
In Bangladesh, the Economic Zones Authority has been in place since 2010 but it has taken more time than expected to come up with a draft plan with identified locations. A study to explore the prospect of setting up of economic zones under public private partnership (PPP) in phases was funded by the World Bank.
Earlier, the government gave Tk 470 million to Bangladesh Economic Zones Authority (BEZA) as interest-free loan to acquire land and develop sites for economic zones. As is the practice elsewhere, the government may launch international tenders to select developers and operators willing to invest in the economic zones. Investment on the part of the government would primarily be on land acquisition, and the cost would be eventually realised from investors through long-term leasing out, with provisions for renewal.
It need not be stressed that the idea of making SEZs an engine for economic growth is integrally linked to quality infrastructure complemented by an attractive fiscal package, with minimum possible regulations. Besides the SEZ Act, one key requirement is the operational rules which, understandably, should be in conformity with those in other countries. These, among others, may envisage:
* Simplified procedures for development, operation, and maintenance of the zones and for setting up units and conducting business
* Single window clearance for setting up a unit in a SEZ
* Simplified compliance procedures and documentation with emphasis, as far as practicable, on self certification
In this connection, it may not be out of place to mention that experience of exclusive zones in the country has not been a pleasant one. The Korean Export Processing Zone (KEPZ), a watershed in the country's investment scenario, has been stuck with various difficulties ever since it commenced operation. Now that exclusive zones for Japanese and Chinese investors are planned be set up, it is in the mutual interest of the foreign investors and the country that the authorities should be up and doing in fulfilling the commitments that are pledged.
Sustaining the economic zones will, of course, involve continued support, besides providing routine services. In order that bureaucratic tangles do not deter proper functioning, BEZA should be adequately empowered to handle issues that may not be unique in our case as the whole thing comes in a package, in a more or less uniform basis, in most countries where these facilities are offered.
wasiahmed.bd@hotmail.com