Economic zones not enough to attract foreign investors

With the aim to attract both local and foreign investors to accelerate industralisation, create one core jobs and export $40 billion worth of goods and services, Bangladesh earmarked to set up 100 economic zones across the country in 2015. So it offered 100 per cent tax exemption for 10 years on capital gains, dividends, royalties and technical assistance fees, and 80 per cent exemption on value added tax on electricity, water and gas consumption. But after seven years, it has readied only five economic zones.
Economists said that the progress of investment in the economic zones is quite disappointing, particularly when it comes to foreign investment. The Bangladesh Economic Zones Authority (BEZA) has so far received $22.17 billion worth of investment proposals from home and abroad in various industries, including automobile, chemical, pharmaceuticals, plastic and food processing. Of them, only 1.32 billion is foreign direct investment (FDI), data from the agency showed. Just $55 million has been invested so far. Besides, to attract foreign investors, Bangladesh needs to take necessary measures to make considerable improvements in global indexes that reflect a country’s business environment.
Recently, the US ambassador to Bangladesh, Peter Haas, has told a programme hosted by International Business Forum of Bangladesh in Dhaka that a smart company before doing business overseas would certainly want ‘certainty and security’ as political violence and electoral instability ‘scare’ them. Besides, the company would also want to see certain things, including a developed transportation system, consistent access to power and water, and a well-trained workforce. Above all, foreign investors want to see a peaceful and stable Bangladesh, a Bangladesh that is committed to democracy, transparency, pluralism, tolerance, good governance, and respect for human rights. So, just providing incentives is not enough. It is urgent to earn the confidence of the investors as well.
It is no surprise that Bangladesh has consistently been branded as one of the more difficult ones in the global ‘Ease of Doing Business Index’. This needs to change. As per the latest report of 2020, Bangladesh ranked 168th position among 190 economies which portray a negative image of the country’s business environment to the foreign investors. It must take necessary measures to make considerable improvements in each indicator of these global indexes. Setting up economic zones is only half the battle, as it stands; many foreign investors are under the impression that Bangladesh is an incredibly tough country to do business when it comes to the ease of doing business.