Japanese Economic Zone should promote inclusive growth

The Bangladesh government is working to establish 100 Special Economic Zones (SEZs) for creating 10 million jobs and generating an additional $40 billion worth of exports.

Eradicating poverty by accelerating economic growth and generating employment opportunities through industrialisation is a key policy priority for the country.

By offering attractive financial incentives, and serviced industrial plots, these economic zones are expected to mobilise investments from both domestic and foreign sources.

Prime Minister Sheikh Hasina yesterday inaugurated the Bangladesh Special Economic Zone (BSEZ), also known as the Japanese Economic Zone, in Araihazar upazila of Narayanganj.

Bangladesh Economic Zones Authority (BEZA) expects $1.5 billion in investments and employment for about one lakh people as the Japanese economic zone in Narayanganj becomes fully operational.

According to the authorities concerned, the economic zone will facilitate technology transfer between Japan and Bangladesh. Besides, a separate One Stop Service Centre and Skills Development Centre will be established in the economic zone. It looks very positive that Japanese investors are keen on investing in this economic zone to expand their business in Bangladesh.

Japanese Ambassador to Bangladesh Ito Naoki said this special economic zone would be ready and we are expecting FDI [foreign direct investment] by the end of this year.

A number of companies from various sectors such as light engineering, automobile and logistics have shown their interest in investing here, he added, expressing hope that some of them will be able to start production in March 2023. Bangladesh governments and Japan are jointly developing the zone on 1,000 acres of land in Narayanganj, 32 kilometres from the capital Dhaka.

Japan International Cooperation Agency (JICA) undertook the initiative to conduct the feasibility study in 2016. Later in 2019, Sumitomo Corporation from Japan inked the deal with the Bangladesh Economic Zones Authority (BEZA) to develop the BSEZ.

Renowned companies like Singer have already started construction of their infrastructures at the economic zone while an agreement has also been signed with German company Rudolf.

Agreements will be signed with two more Japanese investors after the inaugural programme, while 30 more Japanese firms and 10 other firms of different countries have shown their interest to invest in that economic zone. The Singer would make an initial investment of $79 million while chemical company Rudolf would make an initial investment of $7 million.

Land acquisition to set up the Japanese Economic Zone-2 have been completed while a proposal is also awaiting nod from the Cabinet Committee on Economic Affairs (CCEA) for setting up another special economic zone dedicated to the Chinese investors.

BEZA Executive Chairman Shaikh Yusuf Harun earlier expressed very much optimism about restoring the import of LNG soon adding that the government is scrutinizing the possibility of allowing the import of LNG by the private sector.

The government has requested the Japan International Cooperation Agency (JICA) to set up skilled development centres at Araihazar in Narayanganj and at Mirersarai in Chattogram.

In the countrywide five economic zones, till date, some 177 investors have made an overall investment proposal of $22,173.177 million aiming to create employment opportunities for some 8,16,541 people.

The Special Economic Zones (SEZ) policy in Bangladesh requires adopting a more flexible approach to using the instruments and infrastructures of economic zones in the most effective way to leverage sources of comparative advantage of the growing economy, and to ensure flexibility to allow the zone activities to flourish. Most fundamentally, this will require a change in the mindset away from the traditional reliance on fiscal incentives, and wage restraint, and instead focusing on facilitating a more effective business environment to promote competitiveness, economic integration, innovation, and social and environmental sustainability.