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Japanese investors have called for removal of trade barriers to Bangladesh as they ponder over parking in more funds in the country, according to a leader of the Japan-Bangladesh chamber.
In recent years, Bangladesh has become a lucrative destination for Japanese investors due to cheap labour and trade privileges centring its status as a least-developed nation.
Last year, the total number of Japanese companies in Bangladesh was 278, up from 260 in 2017 and 245 in 2016.
As of November last year, the amount of investment made by private Japanese companies in Bangladesh was $326 million, excluding Japan Tobacco’s $1.5 billion acquisition of Akij’s cigarette business.
The problems listed by the Japanese companies in Bangladesh include inadequate logistics and infrastructure, difficulty in quality control and shortage of skilled manpower.
Bangladesh takes the second largest clearance time from the airport and seaway compared to other Asian nations. Currently, it takes 15.6 days to get clearance for sea freights and 7.9 days for air cargo.
In a survey conducted by Japan External Trade Organisation (Jetro) earlier this year, the majority of the Japanese companies operating in Bangladesh said they were planning to go for business expansion over the next two years.
Now with the view to removing the trade barriers, the fourth round of Public and Private Economic Dialogue (PPED) between Bangladesh and Japan will take place on July 4 in Dhaka, said Tareq Rafi Bhuiyan (Jun), secretary general of the Japan Bangladesh Chamber of Commerce and Industry (JBCCI).
“We will mainly discuss the issues related to trade and investment. We also have some previous outstanding issues to be discussed and resolved for higher trade between the two countries.”
The last round of PPED took place in Tokyo.
Seeing the arrival of Japanese investors in large numbers, the government has allocated 500 acres of land at Araihazar in Narayanganj for setting up a dedicated economic zone. Another 500 acres of land will be allocated for the Japanese economic zone soon.
Issues pertaining to ports, human resources and the ease of doing business will be discussed at the meeting, Jun said. A delegation from the prime minister’s office will represent Bangladesh, while the Far East nation will be represented by officials from its ministry of economy, trade and industry (METI).
In recent years, Japan has also turned into a big market for Bangladesh’s garment sector.
Japan is the only country among the Asian nations where one billion dollar worth of garment items are shipped from Bangladesh.
As much as 75 percent of Bangladesh’s exports to Japan are garment products, according to Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
In the three months of 2019, apparel products worth $325 million were shipped to Japan.
“This indicates that the potential to export to Japan this year will be about $1.3 billion for us.”
Bangladesh’s strong competitor in Japan is Myanmar and the neighbouring country’s shipments to the Far East nation are worth more and they contain more value-added products, she said. Besides, the Japanese government has taken on a policy to reduce the country’s overdependence on China for sourcing different items like clothes.
“Thus, there is great potential to increase our garment exports to Japan,” said Huq, who is now in Japan as part of Prime Minister Sheikh Hasina’s delegation.
source (TDS)
