Recalibration of SEZ plan is timely

The interim government's decision to abandon the previous Awami League government's over-ambitious and unrealistic plan for 100 economic zones, and instead prioritise the development of five strategically selected zones, is a prudent and commendable move. The AL government's so-called 100 economic-zone project was not only impractical, but also promoted as a political agenda. The project was clearly destined to fail, had the AL even remained in power. This was because of the administration's focus on quantity over quality, coupled with a whimsical project implementation strategy, which undermined the project's potential. Notably, for well over a decade, the AL government touted the establishment of 100 SEZs by 2030, yet only a few zones showed visible progress before its tenure ended amidst a mass uprising on August 5, 2024. Moreover, the politically motivated selection of SEZ sites led to corruption and irregularities, with numerous sites selected in areas with minimal prospects for the viability of a SEZ. It also resulted in the widespread acquisition of agricultural land and river encroachment. The decision to ditch the plan, therefore, couldn't have come sooner.

In contrast, the interim government's decision to concentrate on five key economic zones - the National Special Economic Zone in Chattogram, Srihatta Economic Zone in Sylhet, Japanese Economic Zone in Narayanganj, Maheshkhali Economic Zone in Cox's Bazar, and Jamalpur Economic Zone in Jamalpur - demonstrates a more pragmatic and realistic understanding of the development of SEZs for economic purposes. By focusing on a select few of high-potential zones, the government can allocate resources more effectively for their timely development, ensuring that they are equipped with the necessary infrastructure, utilities, and support services to attract foreign investors.

However, the planned development of SEZs alone is not enough to attract a healthy flow of foreign investment. The government must also address the underlying issues hindering business operations in Bangladesh. Investors face a series of obstacles, chief among them being bureaucratic red tape, frequent policy flip-flops and political instability. The Bangladesh Economic Zones Authority (BEZA) and the Bangladesh Investment Development Authority (BIDA) have One Stop Service (OSS) platforms that cater to the needs of both local and foreign investors. While some progress has been made in enhancing systems and processes, the OSS remains far from a true "one-stop service." Investors still require access to 155 services across 44 institutions, while BIDA and BEZA can only expedite approximately 60 services from 23 institutions. For the remaining services, investors need to navigate cumbersome bureaucratic processes in various government offices, due to the lack of agreements between the regulatory bodies and all service-providing agencies. So, the government must strengthen the OSS service.

Another major challenge facing foreign investors is the frequency of policy changes in Bangladesh, which disrupts business operations. While policy adjustments can be necessary, investors often allege that the government resorts to policy flip-flops without consulting private sector partners, leading to uncertainty and reduced profitability. Furthermore, foreign investors have long demanded a consistent tax policy in Bangladesh. However, tax policy changes almost every fiscal year, further complicating investors' decision-making and affecting business confidence. Therefore, while the interim government's recalibration of SEZ projects is a timely and necessary step, it must also address the broader issues hindering foreign investment.  Ultimately, the government must ensure a more attractive investment climate by implementing regulatory reforms, improving infrastructure, and ensuring political stability.