Fast-track special zone for Japanese businesses

A group of investors urged the government to expedite efforts to set up the proposed exclusive economic zone in Bangladesh for Japanese investors, as investment proposals from Japan are increasing.

Many Japanese investors expressed their interest in investing in Bangladesh as they think the country is an important destination for them for having duty benefits and cheap labour, said Tareq Rafi Bhuiyan, a director of Japan Bangladesh Chamber of Commerce and Industry or JBCCI.

“The Japanese entrepreneurs are waiting with investment proposals, but the government has not yet finalised any specific place for the zone,” Bhuiyan told The Daily Star. The issue was discussed at the trade body's annual general meeting in Dhaka on March 22.

A high-powered Japanese team comprising businessmen and government officials visited Bangladesh last month to see progress in the efforts, he said.

They want the zone to be sited near Dhaka for its proximity to the international airport and to easily communicate with the government for administrative purposes, he added.

The government plans to allocate lands at Nayanpur of Sripur in Gazipur for the zone, said an official of Bangladesh Economic Zones Authority, the body for implementation of the special economic zones, asking not to be named.

The government is also considering setting up the zone for the Japanese investors at Mirosarai or at Anwara in Chittagong, said Akhtaruzzaman, the immediate past president of the chamber. “As an alternative to Mirasorai, Japanese investors prefer the zone to be built in Narsingdi or at Chandina in Comilla rather than in the port city.”

The proposal to set up an exclusive economic zone for Japanese investors strengthened further last September when both Bangladeshi Prime Minister Sheikh Hasina and Japanese Prime Minister Shinzo Abe signed a joint statement in Dhaka for further economic cooperation between the two countries.

Both prime ministers agreed on further cooperation in transport network improvements, ensuring a stable power supply and development of economic zones and the private sector.

In his speech, Abe said economic cooperation will be pursued under the initiative of the Bay of Bengal Industrial Growth Belt, which is popularly known as the Big B initiative.

Japanese investment in Bangladesh has been increasing significantly since 2008, when the Japanese government had adopted the China plus one policy to reduce its overdependence on China for trade.

As part of the policy, Japanese investors have started relocating their investments from China to other countries, mainly Bangladesh, Myanmar, Thailand and Vietnam.

Currently, Japan's total investment in Bangladesh is nearly $450 million, of which, 35 Japanese enterprises have investment worth $291.05 million in the EPZs alone.

Investment proposals from Japan worth $1.2 billion are pending with the Board of Investment in Bangladesh for a long time, according to Japan External Trade Organisation or JETRO.In May last year, Bangladesh Export Processing Zones Authority and JETRO signed an agreement to offer 40 industrial plots in export processing zones exclusively to Japanese entrepreneurs.

Japanese investors are interested in investing in sectors like automobiles, garments and fabrics, electronics and fast moving consumers goods. At present, 181 Japanese companies have operations in Bangladesh.