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GOVT ECONOMIC ZONES
Actual investment far lower than proposed
JAGARAN CHAKMA
Actual investments at six government-owned economic zones have remained at a far lower level compared to the proposals put forward by both foreign and local investors owing largely to inadequate facilities, official figures showed.
Local and foreign investors have promised to invest $24 billion in the industrial enclaves in the last three and a half years. But the actual investments stand at $1.6 billion, according to the Bangladesh Economic Zones Authority (Beza).
Of the realised investment, $80 million came from foreign investors, which is again much lower than the inflows initially pledged.
An analyst has termed the amount disappointing.
Of the units, 23 are being set up at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram, two in Moheshkhali Economic Zone of Cox’s Bazar, six in Sreehatta Economic Zone of Moulvibazar, and five units in Jamalpur Economic Zone, said Beza Executive Chairman Shaikh Yusuf Harun.
“Some investors have had to develop land on their own and they have taken more time. This is one of the reasons for the slow realisation of investment. We are encouraging our investors to start the construction work immediately.”
In 2015, the government decided to set up 100 economic zones across the country to attract both foreign and local investments to accelerate industrialisation, create one crore jobs and export an additional $40 billion worth of goods and services by 2030.
After eight years, the Beza has readied six economic zones while entrepreneurs have set up 12 enclaves.
In order to draw investments to the zones, the government has offered a 100 percent income tax exemption for 10 years on capital gains, dividends, royalties, and technical assistant fees and an 80 percent exemption on value-added tax on electricity, water and gas consumption.
Besides, export-oriented industries are allowed to sell 20 percent of their products in the burgeoning local market and foreign nationals working in the zones may remit 75 percent of their net salaries.
However, responses from foreign investors are lukewarm.
The state-run agency is, however, hopeful that investors will put in $3 billion within the next one year as more than 35 industrial units are under construction at the government-run economic zones.
Besides, Harun said, agreements are set to be inked to invest around $500 million at the Japanese special economic zone.
According to the Beza, Marico Bangladesh, a multinational company operating in the country for nearly decades, invested $6 million, Asian Paints Bangladesh invested $34 million, and Nippon & McDonald Steel Industries Ltd, a joint venture, made an investment of $15 million.
The agency has attracted foreign direct investments from Japan, China, India, Australia, Germany, the Netherlands, the US, the UK, Singapore, South Korea, and Norway, sources said.
The investment proposals have been made in the sectors such as automobile, chemical, pharmaceuticals, light engineering, hospital, plastic, edible oil, and food-processing.