Hiren Pandit

In 2022, Bangladesh received more than 100 million dollars of investment from Japan. This is a record. In the last decade, the number of Japanese companies in Bangladesh has increased 4 times. Both countries are now working for the EPA to strengthen bilateral ties. EPA could be signed before 2026. In that year, Bangladesh will be promoted from a least developed country to a developing country. The government is giving all kinds of support to Japanese businessmen to invest in Bangladesh. Bangladesh has many promising sectors such as medicine, agriculture, and energy where Japanese businessmen can invest.'

Japan's Minister of Economy, Trade and Industry Yasutoshi Nishimura mentioned that Bangladesh can attract Japanese companies doing business in Asian countries. He said that the work of relocating factories of Japanese companies from other countries has already started. Japanese firm Honda has opened a factory in Bangladesh and IT firm BJIT has started production in the country. Many more institutions of industrial development in Bangladesh will come to Bangladesh. Noting that Japan's relationship with Bangladesh has reached a strategic relationship from the previous broad relationship at the Tokyo conference last April, Nishimura suggested developing the existing business environment to increase investment in Bangladesh and trade with this South Asian country.

Regarding the industrial development of Bangladesh, he said, Tokyo is already helping in the construction of several infrastructures in Bangladesh through JICA. Last April, JICA signed a Memorandum of Understanding (MoU) to enhance the capacity of the Bangladesh Industrial Development Agency. JICA is also helping to develop the IT sector in Bangladesh.

Recently in collaboration with Japan External Trade Organization (JETRO), Bangladesh Investment Development Authority (BIDA), Federation of Bangladesh Chamber of Commerce and Industry (FBCCI), Japan Bangladesh Chamber of Commerce and Industry, Chattogram Chamber of Commerce and Industry and Japanese Commerce and Industry Association. A conference was held. Economic relations between Bangladesh and Japan will be based on 3 pillars for the next 50 years. These are the industrial development of Bangladesh, the relocation of Japanese companies, and realistic energy systems.
Bangladesh Special Economic Zone, known as the Japan Economic Zone, is being built at Arai Hazar in Narayanganj and Dhaka Metrorail has already been partially opened to the public. At present, about 350 Japanese companies are operating in Bangladesh. The total investment of the institutions is more than 380 million dollars. 85 percent of these organizations want an Economic Partnership Agreement (EPA) between Dhaka and Tokyo to accelerate trade and investment.

Pointing out that most of the BIDA services are available online, he added, "In a few months, we are going to ensure that all the services are offered from one place." Bangladesh is working to utilize the skills of the large population of the country by creating an investment-friendly environment as well as infrastructural development under a well-planned development process. The dream of the development and progress of the country will come true. This can be said for sure. Bangladesh is now dreaming of becoming a developing country in 2026, so it is possible to overcome this situation by comprehensively reforming the financial sector, reducing social unrest, developing infrastructure to increase investment, keeping electricity and gas supply uninterrupted, and, above all, preventing corruption.

Bangladesh can be one of the main investment attractions of Japan in Southeast Asia. However, 71 percent of Japanese companies are not satisfied with the business environment in Bangladesh. Recently, this information has emerged in a survey of the Japan External Trade Organization (JETRO). However, if the business environment improves, Japanese companies will be proactive in business expansion. 74 companies operating in Bangladesh gave their opinion in this survey conducted from August to September last year. According to the survey report, 26.2 percent of Japanese companies said that they are dissatisfied with the business environment in Bangladesh. 44.6 percent said they were somewhat dissatisfied. 4.60 percent of companies are satisfied with the business environment.

Despite the dissatisfaction with the business environment, according to JETRO's survey report, 71.60 percent of Japanese companies operating in Bangladesh are interested in expanding their business in the next one to two years. Bangladesh is in the second position among various countries in Asia and Oceania region in terms of such attitudes of Japanese businessmen. South Korea, Malaysia, Thailand, Vietnam, and Indonesia are behind Bangladesh in this regard. But neighboring country India is slightly ahead. 72 percent of Japanese companies want to expand business in India.

Infrastructure development, financial sector management, macroeconomic capacity, institutional capacity, business dynamism, labor market efficiency, innovation, and technological readiness can propel our efforts toward success. According to the report, Japanese companies feel that Bangladesh lags behind neighboring countries in terms of business risks in obtaining government licenses or approvals, investment permits, tax-related issues, and obtaining visas and work permits.

In terms of business environment, Japanese companies have put Bangladesh at the top of dislike in two areas. The first is the lack of efficiency in licensing and licensing of businesses, the second is the inefficiency of the tax system. Almost 80 percent of Japanese companies feel that the biggest obstacle to doing business in the country is bureaucratic complexity. 73.4 percent of Japanese companies think that the inefficiency of the tax system is a major obstacle to doing business in this country. In addition, the legal framework or foundation for foreign capital and the complexity of obtaining visas and work permits for foreigners are also major obstacles to the business environment in Bangladesh. However, in these two cases, the situation of Myanmar, Singapore, and Malaysia is worse than Bangladesh.

Where and why Bangladesh ranks ahead of other countries in terms of business environment in the survey. In response, Japanese companies have put Bangladesh on the list of preferences in four areas. The areas are cheap labor, easy availability of workers and employees, easy availability of specialized manpower and engineers, and existing markets. In the survey, 51.7 percent of Japanese companies ranked Bangladesh as the top business environment for 'cheap labor'.

The main challenges faced by the Japanese in doing business in Bangladesh last year were procedural complications in granting customs clearance and volatility in foreign exchange prices. In 2021, there was a shortage of skilled workers and an increase in wages. 73.2 percent of Japanese companies that participated in the survey said that the first challenge was the complexity of the customs system. 72.6 percent of companies said the volatility of foreign currency prices is a major challenge in business.

In general, the survey asks, what is the cost of production of goods in any country. In response to this, it can be seen that the cost of producing products in Japan is 100%, and the cost of producing those products in Bangladesh is less than 60 percent. The cost of production is lower than in Bangladesh only in Cambodia and Laos. Investment by Japanese companies is very important for Bangladesh. Now Japanese companies should focus on removing the barriers to business expansion. In this regard, the BIDA has said that the process has been started to issue work permits to foreigners within three days. Besides, BIDA is also working to finalize the approval of business-related services in less time than Vietnam.

In Bangladesh, the regulatory agencies still require many types of documents for company formation. It takes more time; the cost is more than in many countries. Japanese companies are also urged to use the Authorized Economic Operator or EEO facility to reduce customs complications. In addition, the most important thing is that having investment potential does not mean that foreign investment has come, incentives must be given to increase foreign investment. It needs to be prioritized.

Broadly speaking, foreign investment will not increase if the unfavorable conditions prevailing in our country for expanding a new enterprise or business also exist for foreigners. Therefore, to attract foreign investment, a favorable environment must be created. This applies to investors from all countries, not just Japan. Bangladesh Hi-Tech Park Authority (BHTPA) was established in 2010 to create an investment-friendly environment and employment in the IT sector. After its establishment, nationwide activities have been conducted in the development of hi-tech industries. In this case, the sector has received some domestic investment, but the desired foreign investment has not been seen. According to the data of Bangladesh Bank, in the last one and a half decades, foreign investment in the information technology sector of the country has come only to 180 million dollars. Government policymakers have set a target of $5 billion in foreign investment in the sector by 2025.

As for why foreign investment cannot be attracted, the stakeholders claim that the information technology sector of the country is still in the development stage. Due to this, the desired foreign investment was not received. However, Bangladesh is a very promising country in the information technology sector. With proper planning and world-class skills, it will be possible to get foreign investment in the future.

For this purpose, it is necessary to move forward by fixing the target in a specific way. Because of the limitations in technology, skilled manpower, and lack of proper planning, the entrepreneurs of the information technology sector feel that the technology sector is not developing as expected. According to them, one of the biggest reasons for hindering foreign investment is the country's slow infrastructure development and inability to keep pace with the world's demands. In this case, we have to plan more realistically.

In this case, it is not possible to show a business growth model of at least 20 years to attract foreigners. In addition, we have to adapt to the needs of foreigners at present. On the other hand, due to lack of proper skills, they have to work at lower prices than other countries. There is no substitute for acquiring timely technical skills. Educated youth need to be employed in the expansion of the technology sector.

Efforts should be made to implement the investment promises made by China-based companies. According to the authorities, the visit of the Saudi Arabian delegation needs to be focused so that it can also bring results. Foreign companies are already assembling, which is positive. In addition to its continuation, steps should be taken to extend its continuity in the future.

Business activities in the technology sector have been conducted in Bangabandhu Hi-Tech City located at Kaliakore in Gazipur for several years. Besides, some companies have started small-scale production activities in the hi-tech parks built in Sylhet and Rajshahi. Very little foreign investment has come into these parks. Bangladesh currently has 650,000 freelancers, the second-largest number of online laborers worldwide. Bangladesh's potential in the information technology sector is quite bright if it can be utilized properly. For this, a large trainable youth population needs to be developed.

Bangladesh Hi-Tech Park Authority has launched an online one-stop service for investors. As a result, foreign companies wishing to invest can complete all the procedures very easily and quickly. Besides, the authorities also claimed that the investment environment has been maintained. 1 thousand 600 types of products are exported from Bangladesh to different markets of the world. 85 percent of the total export earnings come from 292 types of ready-made garments. Only 15 percent of the income comes from the remaining 13 hundred products. But among these 1,300 products, there are many products, which have a huge market and are constantly increasing in demand. For the economic development and sustainable growth of Bangladesh, export products should be diversified. If this can be done, the dependence on one product will be reduced on the one hand, and the total export income will increase on the other hand. Employment will increase.

Businessmen-industrialists from Bangladesh, India, Nepal, and Bhutan have established business relations among themselves. The relationship of trust between them is slowly building. Import, export trade, investment, and miscellaneous business are increasing day by day. Governments are helping with this. All international organizations including the World Bank, International Monetary Fund (IMF), and Asian Development Bank are helping.

Bangladesh, China, India, and Myanmar (BCIM) were formed to further expand the area of cooperation. It is seen that as a result of these millions of Bangladeshi Indians are encouraged in tourism, medical tourism. Our exports are increasing. Relationships will develop between businessmen of the country. Our exports will increase, and revenue will increase. Infrastructure will be developed. However, all concerned should come forward to attract foreign investment through proper planning.

The writer is a, columnist and researcher