Japan eyes three special economic zones (SEZs), including the one at Araihajar, Narayanjanj, to give a big boost to Japanese investment in Bangladesh but things depend on the success of the first one, says Japanese Ambassador to Bangladesh Naoki Ito.

“This (Araihajar EZ) should provide the best possible environment and the best possible incentives for the investors,” he said, adding that a special economic zone is a very important key to invite an increasing number of Japanese companies to invest in Bangladesh.  

Ambassador Ito said he has been advocating that Araihajar should be the best possible economic zone in Asia, beating its rivals in countries like Vietnam, Myanmar and the Philippines. 

The envoy said they will look into opportunities at Mirsarai under Bangabandhu Sheikh Mujib Shilpa Nagar, being developed on a contiguous land of 30,000 acres, and a possible economic zone in Maheshkhali-Matarbari area if Araihajar becomes successful.

He shared the plans on the three potential economic zones for the Japanese investors in Bangladesh while responding to questions at a virtual dialogue titled “Bangladesh-Japan Relations: Prognosis for the Future” where he delivered the keynote speech.  

Cosmos Foundation, the philanthropic arm of the Cosmos Group, hosted the dialogue as part of its ongoing Ambassador’s Lecture Series.  

The opening remarks were delivered by the Cosmos Foundation Chairman Enayetullah Khan. The session was chaired by Dr Iftekhar Ahmed Chowdhury, renowned scholar-diplomat and former Advisor on Foreign Affairs of Bangladesh Caretaker Government.

Md Abul Kalam Azad, Special Envoy, Climate Vulnerable Forum; Hayakawa Yuho, Chief Representative, JICA Bangladesh Office; Dr Salehuddin Ahmed, former Governor, Bangladesh Bank; Prof Masaaki Ohashi, Professor, University of the Sacred Heart, Tokyo; Manzurul Huq, Columnist, writer and academic; Prof Takahara Akio, Dean, Graduate School of Public Policy, the University of Tokyo and Ambassador (Retd) Tariq A Karim, Honorary Advisor Emeritus, Cosmos Foundation comprised the panel of discussants.

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Ambassador Ito said the Economic Zone at Araihajar will be ready for its operation by the end of the next year.

Due to the Covid-19 situation, he said, he cannot exactly say how many companies are coming to make investments but it is really crucial to see successful and continuous business partnership between Bangladesh and Japan.

“I’m sure down the line it’ll attract more investments from Japan,” he said, adding that they might be able to see 100 companies making investments.  

The Japanese envoy said Japan International Cooperation Agency (JICA) is now doing feasibility study on Mirsarai economic zone and then will explore the third possible economic zone at Matarbari-Maheshkhali area which is being developed as energy hub and industrial zone.  

“I’m sure we’ll have the opportunity to develop Japanese economic zone in Matarbari-Maheshkhali area as well,” he said.

Hayakawa Yuho said huge projects in BIG-B such as the three MRT lines in Dhaka, the integrated development of the Matabari-Moheshkhali area and the deep-sea port there, Dhaka airport terminal-3, the Bangabandhu Jamuna railway bridge, EZ in Araihazar are under construction.

Abul Kalam Azad said work on Arihajar economic zone started very vigorously and basic works have been done, and hoped that respective companies will be able to start their construction there very soon.  

Responding to a question from Dr Iftekhar, Azad said the Mirsarai economic zone is a big area of 30,000 acres and this land has been naturally reclaimed from the sea mostly.  

“A huge work is going on by different stakeholders from home and abroad,” he said, adding that they will have an independent power plant there and also an opportunity for the port facility.  

Azad said the Mirsarai economic zone is basically one part of Bangabandhu Sheikh Mujib Shilpa Nagar and it is a great opportunity for investors to work there.  

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Dr Salehuddin said Arihajar is a very good place while Mirsarai may be too crowded. He suggested concentrating on Araihajar and it can become very successful. “Matarbari may be there but I’m little bit skeptical about Mirsarai.”

Talking about Public Private Economic Dialogue (PPED), Ambassador Ito said this has been a major vehicle of economic partnership and the two countries have resolved many issues related to business climate through this mechanism.  

“Unless and until you resolve those issues and challenges, the existing Japanese companies will not come as fast as you might be hoping for,” he said, adding that there are still some issues that need to be addressed.  

The envoy said there are three main challenges in the eyes of Japanese companies. Most of the Japanese companies are not happy about issues like customs clearance, which takes time and requires them to go through cumbersome procedures.  

Next comes trade financing, in particular the slow processing of letter of credit, and restrictions on telegraphic transfer, he said. 

In only two countries of Asia, a telegraphic transfer is not used as the primary method of settling import transactions, Ambassador Ito said, adding that Bangladesh and Pakistan maintain similar restrictions.

As for the investment climate, he said, there have been a lot of improvements despite Covid-19 pandemic. “I fully appreciate efforts made by the government of Bangladesh.”

Wrapping up the roundtable discussion, Dr Iftekhar Chowdhury remarked that Bangladeshis remain “deeply beholden” to Japan for having always stood by them: “As one of the fastest growing developing economies, Bangladesh also provides for Japan an excellent trading partner, and a very useful investment destination.”