By Zhu Xian
Country Director - Bangladesh
Piloting Reform through the Development and Management of Economic Zones
World Bank Bangladesh Development Series – Report No. 16
4 July 2007
Dhaka Honorable Adviser of the Ministry of Industries Ms. Geeteara Safiya Choudhury, honorable secretaries, distinguished guests, ladies and gentlemen: Good Morning. I am delighted to join all of you here for this landmark workshop and launch of the report - Piloting Reform through the Development and Management of Economic Zones. My colleagues from the World Bank and I are grateful to the Board of Investment Bangladesh and the IFC Bangladesh Investment Climate Fund, for jointly hosting this event and bringing adequate focus to this very important subject. I would also like to thank all those who, through participation in workshops or through their direct expert input, have contributed to this report, particularly officials from the Board of Investment, the Bangladesh Export Processing Zones Authority and the Bangladesh Small and Cottage Industries Corporation. I’ve noticed in the newspapers recently and evidenced by participation here today that economic zones are a topic of great interest. This may have differing reasons for different stakeholders, but I’d like to address what the real significance of economic zones in Bangladesh is from my perspective. Land is Bangladesh’s scarcest resource and zones are a good way to ensure that land is used productively and efficiently. There is no doubt that agricultural land is important for Bangladesh to provide food security for its people, but the inevitable growth of industrial land must also be considered. The main issue is productivity, which requires careful and strategic planning of the use of non-agricultural land. But what economic benefits will this planning bring. Economic zones can catalyze a multiplier effect on the economy by attracting investments, boosting employment, increasing exports, improving managerial and technical skills, and piloting regulatory improvements. As noted in the report, zones in the Dominican Republic have accounted for over 80 percent of total exports. Zones in only one province in China created jobs for 3 million people. I do believe that the potential and opportunities presented by zones are profound and Bangladesh needs to consider how to strategically capitalize on this potential now. Another critical benefit of zones is the ability to minimize the environmental degradation of industrialization. Without proper planning for the environmental impacts, jobs created now by industry will only lead to problems in the future. Bangladesh is facing these issues now and there are clearly efforts underway to clean up some of the environmental issues. But these issues should be addressed from the beginning, not once industries are set up. For example, most modern SEZs allow for common effluent treatment of hazardous waste, making it easier for companies to comply with environmental regulations. Planning ahead and having a clear road map while partnering with the private sector could enable more holistic and geographically balanced industrial growth. The private sector can bring grounded and realistic knowledge on the best suited locations for industrialization. The role of the Government should concentrate on serving as planner and regulator of land use, while the private sector can provide efficient management and infrastructure development. The next steps for Government with the support of the private sector are as follows. First, the proper policies to facilitate modern economic zones, including public-private partnerships must be adopted. The report presented today provides an analysis of how some of these policies may work in Bangladesh. It is time to take this forward. Secondly, existing zones and industrial estates should move towards commercialized principles. I’m encouraged by the Government’s recent decisions to conduct thorough cost-benefit and economic and financial analysis for potential new EPZs before making location decisions. Such a process should become standard procedure for a new strategy towards zones to be effective. The ultimate benefit of zones goes well beyond the jobs they create and their efficient and environmentally-friendly usage of scarce land. If done correctly SEZs can be treated as pilots for streamlined procedures, and once proven successful, these policies can be implemented throughout the country. Economic zones can provide the needed controlled environments to demonstrate the long-term social, environmental, and economic benefits for maintaining international compliance standards. Zones can play a pioneering vital role by ironing out new policies and procedures to make them workable for the rest of the country. Finally, I hope today everyone will openly and constructively share their experiences and views on the future of Bangladesh SEZs and the way forward. Today’s workshop will be the first in a series to identify the specific steps forward. The World Bank and the IFC will collaborate to provide both infrastructure assistance around zones and advice on the right policies to capitalize on those investments We look forward to working with the Government of Bangladesh, our development partners, private sector, the media, and civil society to achieve this goal. This report is a step in the right direction; I firmly recommend that you read it and act.  |
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