The Japan External Trade Organisation (JETRO) thinks that the investment scenario in Bangladesh needs to be improved further to attract Japanese companies, as they look for secured supply chain in relocating their businesses.
Market, resources, and business environment are the three prerequisites to investment, said JETRO Executive Vice President (EVP) Kazuya Nakajo, adding that the government must work hard on the improvement of the business environment.
The visiting JETRO EVP, who arrived in the capital on October 9 for a two-day visit, said these in an exclusive interview with the FE at the JETRO Dhaka Office on Tuesday.
He attended a knowledge-sharing session - 'welcoming investment from Japan from the experience of JETRO' - and witnessed the signing of a memorandum of cooperation (MoC) between the Bangladesh Economic Zones Authority (BEZA) and the JETRO.
The EVP also met high officials, including the commerce secretary, and the chairmen of BEZA and the Bangladesh Investment Development Authority (BIDA).
Mr Nakajo praised many initiatives taken by the government to improve ease of doing business and cost of doing business. But, he said removing business obstacles, like high import duty, and work against free flow of trade, are necessary for secured supply chain.
"Bangladesh is one of the big nations that the Japanese companies consider - for (its) growing population, increasing income, vast resources, and available workforce."
He also focused on a free trade policy for broader focus on goods and services.
The EVP said the JETRO has been working with the government on those issues for long and found its friendly attitude towards the development of environment for Japan.
In comparison to other big nations - where the Japanese companies have already invested, the JETRO executive said investors show concern over tax and trade policies along with lack of adequate and smooth infrastructure.
Mentioning about the special economic zone (SEZ) at Araihazar, which would be opened by December, he noted that the development in business scenario is marked by the 50th anniversary of the diplomatic relations between Bangladesh and Japan.
He said the international-level infrastructure is considered a good development, inviting investments from all - particularly the Japanese companies.
Mr Nakajo informed that the SEZ would work under PPP model, which the BEZA, Japanese private company Sumitomo Corporation, and the Japan International Cooperation Agency (JICA) would operate.
The JETRO EVP opined that creating a secure supply chain always needs improving markets, including free movement of goods and services.
He also cited the example of Honda company, as it was highly dependent on importing various parts from different countries due to their unavailability in the local market.
Mr Nakajo also said the government must work hard on easing the procedure of import and export, as there are lots of scopes for improvement (in this regard) - comparing to the nations like Thailand and Vietnam, where Japanese investment is huge.
Citing the investment scenario of Japanese companies after starting relocation from Japan, he said some 15,000 Japanese companies have invested in the ASEAN states, while the number is 1,500 in India and only 338 in Bangladesh.
He also focused on improvement of physical infrastructure and port facilities for a better investment environment.
JETRO Country Representative Yuji Ando and JETRO India Chief Director General Suzuki Takashi, who were also present during the interview, also shared the JETRO's focus on new trend in improving business environment.
Mr Suzuki said the 'Make in India' policy has been popular to invite the Japanese companies to India and make the country self reliant.
But Japan industrial township is also one of the initiatives of India-Japan to promote partnership in developing various products, including automobile and smartphones.
Such initiatives created scopes for developing various 'Make in India' products, getting wider market, and creating a competitive market for similar companies from different countries, he added.
