In a new move, the government has decided to give no fresh permission for setting up any export processing zone (EPZ) in the private sector. Rather, it will allow more economic zones (EZs) to be set up in the country. So far, the government has been looking for opportunities to encourage both local and foreign investments in both such zones. The Private EPZ Cell and the Bangladesh Economic Zone Authority (BEZA) were constituted under the Prime Minister’s Office with a view to providing policy- and other-related support for the purpose. The government has so far announced about the allotment of three EZs to the investors from China, Japan and India. Earlier, the Korean EPZ was set up in Chittagong as a private sector venture. Of late, the government has, however, decided to downsize this Korean Export Processing Zone (KEPZ). Bangladesh needs, at least, an aggregate amount of investments worth $35 billion a year, to help attain its cherished 8.0 per cent annual economic growth rate and graduate itself to a middle-income country by 2021. The BEZA has, meanwhile, acquired 510 acres of land at Sreepur Upazila in Gazipur for the Japanese investors and 774 acres at Anwara Upazila in Chittagong for the Chinese entrepreneurs. The government has also been in talks with Indian investors for selecting sites for their economic zones. Some developments to this effect took place during the recent visit of Indian Prime Minister Mr. N. Modi to Bangladesh. The new stance of the government on not allowing any new EPZ in the private sector reflects its preference, at this stage for economic zones in order to attract or facilitate new private investments. A meeting of the board of governors of Bangladesh Private EPZs, according to a report published in the FE this week, decided that since the executive cell has no authority to give permission for setting up private EPZs, the investors from private sector will have to make investment in EZs under the BEZA. A number of questions arises here: how did other private EPZs get permission earlier and from which authority? Secondly, if the executive cell of the private EPZs is turned into an authority, will it be able to allow more private EPZs to be established? Very recently, a total of 22 EZs got permission to operate in the country. Three of them — AK Khan Private Economic Zone (PEZ), Abdul Monem PEZ, and Garment Shilpa Park in Munshiganj — went to the private sector. Two private EPZs — Korean Export Processing Zone (KEPZ) and Rangunia Export Processing Zone (REPZ) – were given permission to operate, long ago. Reports say KEPZ and REPZ are having some problems to be fully functional. Prime Minister Sheikh Hasina directed the authorities concerned for taking steps to resolve the existing problems of two EPZs to make them operational. Of the two, the Rangunia EPZ authority failed to make any mentionable progress, save and except taking licence from the government. But the KEPZ, the much-talked-about one, is having some real problems. The government has recently decided to take back 2,000 acres of land, out of nearly 2,500 acres, from the KEPZ. The government claims that the KEPZ has not been able to utilise more than 500 acres of the land. But such a claim is not otherwise supported by facts. Thus, a spokesman of the Embassy of the Republic of Korea in Dhaka was reported to have told a contemporary this week that the work for making the whole of the KEPZ, as planned earlier, was in full progress. And he also gave a positive picture about the medium-term prospects of it to attract foreign investment in export-oriented areas, by detailing out which companies were planning to come there and in which areas or sectors. Youngone, the Korean conglomerate that has the lead role in the KEPZ, says it has legal obligations that it cannot use more than 1,200 acres, as it has to set aside 52 per cent of the land for plantation, open areas and water bodies. Besides, the KEPZ is yet to get the natural gas supply that was pledged to it before. It furthermore cited the government’s delay in handing over the mutation-related documents of the KEPZ’s land, as a lingering constraint to its operationalisation. On its part, the government has, however, been blaming the Youngone for its failure to fully use the industrial land in the KEPZ. Meanwhile, the latest government decision – that seems to have in a haste — about ‘reclaiming’ land from Youngon is likely to make the future of $1.2 billion fund flow, in the form of foreign investment by the Korean companies to the KEPZ, quite uncertain. This, as analysts have noted, will send a wrong signal — about policy flip-flops — to the foreign investors who do otherwise still look at Bangladesh as having the potential of becoming an attractive destination for relocating their sunset industries. The KEPZ, to mention here, was inaugurated twice by two separate Prime Ministers, during the last two and a half decades. But it has taken too long a period to issue the land mutation-related papers to the company concerned, even after their purchase of land and execution of related deed, upon full payment of money to the parties concerned. A litigation still awaits the completion of the judicial process at the higher level, according to reports published in the media. Against this backdrop, the government has now unfurled its latest decision about promoting growth of exports through setting up of more EZs in the country. In order to fully implement such strategic plans, it is, as the analysts have noted, very important that the existing private EPZs get sufficient opportunities to operate and sustain on fulfilment of the required procedural formalities and necessities. The EPZs are usually run by the government, while the EZs are slated to be operated under the public-private partnership (PPP). Presumably, there will not be any scarcity of land for the purpose, as the country plans to construct some of the EZs near the Bay of Bengal or on the land reclaimed from the sea. Besides, the government has stated that it would give its attention to retrieving the vacant land of the ‘unproductive’ state-owned enterprises (SoEs) and offer them to the EZs to be used as industrial plots. It is a different question whether the government can really execute such a decision. All said and done, the authorities need to appoint public operators at the EZs for their effective management. The BEZA should be at the helm of fast-track construction works. This is critically important because it is well-nigh impossible to get back a foreign investor if he leaves the country for not getting the required services to implement his project. The country’s overall investment scenario, in real terms, over the past couple of years has, in no way, been encouraging. There were flurries of registrations for fresh foreign investments with the Board of Investment (BOI). But the number of investors who really ventured further is negligible. Gross inadequacies relating to infrastructure facilities, access to gas and electricity, bureaucratic tangles etc., are some of the reasons responsible for keeping the foreign investors at bay. Reversal of such a trend needs active attention of both the government and the private sector.
