The move for setting up economic zone with country-specific tag is the latest towards attracting foreign investment in the country. Earlier, it was the Korean EPZ meant exclusively for Korean investors which despite prospects did not make any headway--- most likely due to some unresolved issues with the government. Now, in recognition of the fact that EPZs are for hundred per cent export-oriented enterprises, the idea of economic zone with broader implications to cater to both domestic and overseas needs seems to fit in appropriately with the objective of achieving multiplier gains from foreign investment.
Clearly, it is with this intent that the Japanese economic zone is set to be launched next year. Reports say that the 1,000 acre economic zone to be exclusively used by Japanese firms is being developed in Araihazar upazila of Narayanganj, which is Bangladesh's first ever economic zone under the government-to-government initiative. This indeed is a remarkable move to attract investment from an industrial economy like Japan. Given the massive development projects undertaken in the country by Japan, it is expected that both governments would find it a good opportunity to work together in the years to come. Some of the major development projects under Japanese cooperation include the Bay of Bengal Industrial Growth Belt initiative, the Mass Rapid Transit project (Metro rail), expansion of Hazrat Shahjalal International Airport, and Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI).
The government, reportedly, has assured that potential investors from Japan will be given full cooperation in a bid to boost Japanese investments. In a virtual meeting last week, Japanese envoy to Bangladesh also expressed his optimism about the bright prospect of the economic zone. He also referred to the prospect of relocating some vital manufacturing units to this zone, if things move in the desired direction. He said the automotive industry of Bangladesh could be a good source of investment. In this context, it may be noted that the Bangladesh government has finalised drafting the automotive policy with an eye to attracting foreign investment. The 10-year policy styled Automotive Industry Development Policy '21 recognises the need to create a sufficiently developed automotive production base towards building a modern, competitive and sustainable auto industry in the country. It is here that Japanese car manufacturers, who largely depend on offshore plants, could be potentially useful in achieving the objective. Surely, to make it happen, the economic zone has to be fully equipped-backed by well thought-out government policies. Also, there are scores of other products, including high-tech ones, that can be produced for marketing locally and exporting abroad.
It is a fact that significant benefits of large-scale FDI, particularly in manufacturing, include transfer of technology and development of backward linkage industries, besides employment generation. However, it all depends on sustaining the economic zone with continued support, along with providing routine services. No wonder, success of one economic zone is likely to attract other prospective overseas investors.