With direct and indirect incentives and the improvement of investment climate, Japanese Economic Zone in Araihazar will become number one investment destination among many other economic zones in Asia, said Japanese Ambassador in Dhaka Ito Naoki.
The Japanese envoy was sharing his views on trade and investment in Bangladesh in an exclusive interview with Banglanews24.com.
The interview conversations are as follows:
Banglanews: Many Japanese factories leaving China nowadays, can Bangladesh seize this opportunity?
Naoki: At the wake of corona pandemic, manufacturing companies were made aware of vulnerability of supply chains and need for their diversification across Asia. This should provide opportunities for Bangladesh, as its economy has high potentials of growth in wide-ranging sectors, such as RMG, ICT, agro-based industry, light engineering, and power and energy. In order for Bangladesh to attract more FDIs and fulfil its potentials, I would suggest that investment climate should improve. I would particularly like to emphasize the importance of improving business environment for those companies which are already operating in Bangladesh, and of finding concrete and early solutions to their issues and challenges, in particular, tax, custom, capital flow (remittance). The more responsive the government becomes in enforcing regulatory reform, the more prevalent the perception of Bangladesh being a destination of investment will be. The development of Japanese Economic Zone in Araihazar also makes Bangladesh more attractive destination for Japanese investment. With direct and indirect incentives and the improvement of investment climate in a consolidated manner among relevant ministries and authorities, I believe the Araihazar Economic Zone will become No.1 investment destination among many other economic zones in Asia. In this sense, Bangladesh has an advantage to attract Japanese companies as they diversify their production bases. Solving these existing issues, through various channels including Japan-Bangladesh Public-Private Economic Dialogue, will certainly promote new FDI inflow from Japan and strengthen our business partnership between Japan and Bangladesh.
Banglanews: Japan provided $3.2bn, largest ever loan for 7 big development projects in Bangladesh, which is a great news for us. Can you make a comment about this?
Naoki: In 2014, Honorable Prime Ministers exchanged their visits and both Japan and Bangladesh agreed to pursue the initiative of BIG-B (The Bay of Bengal Industrial Growth Belt). As Bangladesh exhibits its great growth potential, its needs for quality infrastructure have increased and Japan-Bangladesh business partnership has been growing at a rapid pace. That is one of the reasons why Japan’s development assistance toward Bangladesh has reached to the new height. Japan is of the view that development and economic growth of Bangladesh will contribute to the overall stability of Indo-Pacific. I am sure that such development cooperation has been helping Bangladesh to graduate from LDC status and to become a middle-income country. Japan will continue to support infrastructure development, which will be instrumental to establish an enabling environment to achieve Bangladesh’s Vision 2021 and Vision 2041. To achieve this goal, we will do our best to implement the existing projects as well as achieving future plans, to continue to support Bangladesh's steady economic growth.
Banglanews: Japan is financing Dhaka Metro Rail Project, but do you think it will be delayed due to the coronavirus pandemic? If so, how can it be recovered?
Naoki: The construction of Dhaka MRT has continued and made progress even during this COVID-19 pandemic, though, as for Line 6, it is true that the construction pace has partly slowed down due to the situation. In accelerating the progress of the construction work, it is necessary to ensure health and safety of the construction workers. As of the construction of Line 6, the client, the Managing Director of Dhaka Mass Transit Company Limited (DMTCL), has taken the initiative and is taking necessary steps to prevent the spread of COVID-19. I would like to commend DMTCL, which is taking leadership and making efforts to meet the timeline of construction. I am hopeful that Line 6 will start its partial operation by the end of 2021. Besides, the detailed designing of Line 1 is underway and we have started working on the North Line after the signing of the consultancy contract last August. DMTCL will now launch its work on the management of the railway business. In order to start commercial operation as soon as possible, it is essential to strengthen the organization’s capacity, not only in construction but also in operations including safety management and maintenance activities. The Government of Japan has committed JPY 237.5 billion in four stages of funding for Line 6 since 2012. We will continue to provide all possible assistance and cooperation for the opening and success of Line 6, including technical assistance for the safe operation and management of the line once it starts commercial operation. In parallel, we would like to request the Government of Bangladesh and DMTCL to recruit and train staff necessary for conducting operation and maintenance.
Banglanews: Due to the coronavirus pandemic, Bangladesh and Japan are losing business chances on both sides. How can it be recovered?
Naoki: Although it was inevitable that COVID-19 pandemic affected business of companies in Japan and Bangladesh, it is encouraging to note that Bangladesh’s economy is recovering as shown by major economic indicators such as export earnings and remittance. The government has set GDP growth target at 8.2%, the highest in its history, for FY 2021. In September, ADB forecast that Bangladesh would record 5.2% growth in 2020. To mitigate the financial situation of Bangladesh and with expectation of early recovery, Japan has already provided budget support of JPY 35 billion. Early recovery through containing the impact of COVID-19 pandemic will surely help attract investment from both domestic and foreign companies. As I mentioned earlier, it is necessary to settle existing issues that the Japanese companies in Bangladesh are facing. At the same time, I would like to highlight the importance of preparing for the post COVID-19. I understand that Bangladesh will graduate from LDC status by 2024 and be required to agree on new trading frameworks. It also needs to further expedite the flow of goods and services with trading partners and be integrated into regional supply chains. I therefore believe it is high time that Bangladesh would advance studies and negotiations on FTA/EPAs, including RCEP and one with Japan. Such economic framework would promote business activities and bring about better economic system and investment climate for further growth of Bangladesh.
Banglanews: Japanese Prime Minister Mr. Shinzo Abe resigns for health reasons. During his time, Dhaka-Tokyo tie got strongest ever. Does his resignation have any impact on Dhaka-Tokyo tie?
Naoki: As I already mentioned, since the first meeting between two Prime Ministers in 2014 during the historic mutual visits, Japan-Bangladesh relationship has developed dramatically under the Comprehensive Partnership. In May 2019 when Prime Minister Sheikh Hasina visited Japan, both leaders reaffirmed their determination to further develop the bilateral relationship. In the letter addressed to ex-Prime Minister Abe, Prime Minister Hasina recalled that the mutual visits had been great opportunity to open up new vistas of bilateral cooperation. I am convinced that the relationship between Japan and Bangladesh has great potential and will continue to develop even further under the new leadership of Japan. In fact, Yoshihide Suga, the new Prime Minister of Japan, has clearly stated his intention to succeed Prime Minister Abe’s foreign policy, and certainly ties with Bangladesh will be further strengthened.
Banglanews: In the post pandemic era, what issue would you emphasize in Japan-Bangladesh bilateral relation?
Naoki: I would like to stress the importance to realize the determination by both countries to further develop the bilateral relationship, and I welcome initiatives at various levels from grassroots to high level mutual visits. It is my hope that as Japan steps up its development cooperation, our economic partnership through trade and investment will be strengthened. In parallel to that, people-to-people contact and exchange will also lay important foundations for mutual understanding. We would like to welcome more students and trainees and specified skilled workers from Bangladesh to Japan. From October, Japan will relax its visa restrictions under the pandemic and allow new students to come and study at universities in Japan. Promoting tourism in both directions will also be an area of cooperation. The 50th anniversary of Independence of Bangladesh in 2021 and the establishment of Japan-Bangladesh diplomatic relations in 2022 should provide wonderful opportunities to further elevate our bilateral partnership to a higher dimension. I, to that end, look forward to working closely with my interlocutors in Dhaka. We would like to build a free and open Indo-Pacific, together with Bangladesh, and in this context, I also would like to take this opportunity to touch upon Rohingya refugee issues, our common and acute concern. Lasting solution to the issues will be of great importance not only to Bangladesh but also to the region and beyond. Japan will continue to support Bangladesh for its efforts to provide shelters to the refugees and cooperate with Bangladesh to create an enabling environment for repatriation.
BDST: 1530 HRS, OCT 11, 2020