Bangladesh Economic Zones Act was passed in 2010 in the National Parliament as a courageous decision of Prime Minister Sheikh Hasina. The aim was to meet the needs of the rapidly growing economy, establish planned and labour-intensive industries, preserve the environment, achieve high productivity, increase exports, establish highvalue-adding industries and engage with global economic trends.
One of the Bangladesh Economic Zones Authority’s (BEZA) goals is to substantially change the country’s socio-economic conditions by establishing economic zones. It has undertaken various activities under the direction of the Prime Minister to identify favourable locations, formulate investment-friendly policies, announce incentive packages, ensure one-stop service, identify investment promotion strategies and accelerate the investment process in economic zones.
BEZA is implementing the economic zone concept to create direct and indirect employment for 10 million people and produce and export goods worth an additional $40 billion annually. It aspires to become a sustainable development driving force and a world-class investment promoter and service provider to ensure high quality of life for the people. BEZA’s mission is to persistently create value for investors by establishing attractive investment facilities in the economic zones through quality service and competitive incentive packages. BEZA is mandated to establish, license, operate, manage and control economic zones as well promote, attract and facilitate investments in economic zones across Bangladesh. Economic Zones can benefit a country like Bangladesh, especially by fostering economic development and growth. Here are some potential ways to reap the benefits:
Development of Economic Zones: BEZA is responsible for identifying suitable locations for establishing economic zones and developing the necessary infrastructure to attract domestic and foreign investors. The a business-friendly environment encouraging industrialisation and economic growth. As of today, BEZA has been approved for 97 EZ sites by the governing board. Among them, 29 are under construction stage, 12 are in operation, 43 industrial units are in production and 55 more industries are under construction. Attracting investments: One of BEZA’s key functions is attracting local and foreign investments in the economic zones. To achieve this, BEZA offers various incentives and facilities to investors, such as tax benefits, simplified regulatory processes, and access to utilities.
Promoting industrialisation: By developing economic zones with modern infrastructure and facilities, BEZA aims to promote industrialisation in various sectors, including automobile, steel, chemicals, textiles, IT and technology, agro-processing and more. This helps diversify the country’s industrial base and contributes to economic development. Prominent investors in the automobile sector in EZs are Honda, Bangladesh Auto Industries and Star Alliance. In the chemicals sector, major foreign investors are Jinyoun, Sakata Inx, Sigwork, Berger and Asian Paints. Creating employment opportunities: Through establishing industries and businesses in economic zones, BEZA aims to generate employment opportunities for the local population, reducing unemployment and poverty in the region. Though BEZA was established in 2010, BEZA’s footprint started at the field level in 2014. BEZA’s investors have provided 50,000 jobs during this time. An additional one million jobs will be created through the existing investment proposal.
Facilitating trade and export: Economic zones enhance Bangladesh’s export competitiveness. By attracting export-oriented industries, BEZA aims to boost the country’s exports and contribute to foreign exchange earnings. Considering this, BEZA has given about 1,130 acres of land to BEPZA and 500 acres of land to BGMEA for the expansion of their business and to attract more FDI in Economic Zones.
Ensuring compliance: BEZA ensures that industries operating within the economic zones comply with environmental and labour standards. This includes monitoring and enforcing regulations to maintain a sustainable and socially responsible business environment. To ensure compliance in the EZs and the industries, BEZA has established an environmental and social section where environmental and social experts and counsellors work to motivate the investors and workers.
Coordinating with stakeholders: BEZA collaborates with various government, private sector entities and other stakeholders to create a conducive environment for investment and industrial development in the economic zones. BEZA is one of the successful organisations where all – utility service providers ensure quality services.
Industrial diversification: Economic Zones often focus on specific industries, leading to diversification of the industrial base. This diversification can make the economy more resilient to external shocks and fluctuations in global markets. According to the existing investment proposal of BEZA, we can see diversified investments, eg steel, power, chemical, pharmaceuticals, agor-based, textile, garments, automobile, etc.
Infrastructure development: The development of EZs requires robust infrastructure, including transportation, utilities and communication within the EZS and can benefit the surrounding regions. For example, networks. This infrastructure development supports the operations Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) helps in the development of the infrastructure of the surrounding area. The Chattogram region, including the Hill Tracts districts, will benefit from the intervention of BSMSN.
Technology transfer: Foreign companies operating in EZs may bring advanced technologies and practices, facilitating knowledge transfer to local industries. This can enhance the country’s overall technological capacity, BEZA is establishing G2G Economic Zones, eg, Japanese, Chinese and Indian EZs, which will help transfer technology to Bangladesh.
Skill development: To meet the requirements of industries in EZs, there is often a focus on developing a skilled workforce. This can have long-term benefits by improving the country’s overall skill level of the labour force. BEZA has taken the initiative to provide training for 22,000 people. This initiative will be essential in sending skilled manpower outside the country.
Regional development: EZs are typically located in specific regions, and their development can spur growth in those areas. This can help reduce regional disparities in development and promote more balanced economic growth across the country. BEZA is developing Economic Zones in different areas like Jamalpur, Sirajganj, Bagerhat, Cox’s Bazar, etc, which will help improve the lagging area’s per capita income.
Government revenue: Economic Zones can contribute to government revenue through taxes, fees and other revenue-sharing mechanisms. This additional income can be used for public infrastructure and social development projects. In the future, economic zones will be one of the major sources of government revenue.
Enhanced competitiveness: The presence of EZs can drive competitiveness by encouraging local industries to improve efficiency and adopt modern practices to remain competitive with the businesses operating within the zones. In the future, BEZA must increase the cooperation from all government departments to transform it into a more functional organisation. BEZA can be one of the leading organisations in the future for a developed and prosperous Bangladesh, if the allocation of funds from the regular budget is ensured for developing infrastructure in EZs. Md Abdul Quader Khan is a development worker collaborating with the Bangladesh Economic Zones Authority. 26 December, 2023. From The Daily Star.