The concept of Export Processing Zones (EPZs) is similar to ‘Free Trade Zone’ that combines manufacturing and trading activities. According to the United Nations Industrial Development Organisation, an EPZ ‘involves the establishment of modern manufacturing plants inside a customs-bonded industrial estate by offering suitable package of investment incentives to both foreign and domestic entrepreneurs.’

Bangladeshi EPZs are of manufacturing type. The Bangladesh Export Processing Zones Authority (BEPZA) was set up in 1980 to attract foreign capital and technical know-how and thereby boost exports through establishment of export-oriented industries in special zones with special facilities. Earlier in 1980, the Foreign Private Investment (Promotion and Protection) Act was also passed by the parliament for promotion and protection of foreign direct investment (FDI). BEPZA was entrusted with the responsibilities of setting up and operating EPZs in the country. The objective was to provide investors with a congenial investment climate free from excessive procedural complications. Accordingly, the Chittagong EPZ, the first EPZ in Ban-gladesh, was established at Patenga in the port city of Chittagong in 1984 followed by the launching of the Dhaka EPZ in 1993. Since then, four more EPZs have been set up at Mongla, Comilla, Ishwardi and Nilphamari.

Bangladesh is now attracting the attention of global investors as a hub of export-oriented internatio-nal manufactures. International entrepreneurs are giving top priority to Bangl-adesh because of the country’s close proximity to the fast growing South and Sou-th Asian markets and the fact that she is within easy reach of the Middle East.

Another reason for Ban-gladesh’s attraction to foreign investors has been the availability of most inexpe-nsive and productive labour force. This has made the EPZs of Bangladesh the optimum profit-earning bases in the world. Prospects are further boosted by the government’s most liberal policy with regard to foreign investment.

Changing economic and political conditions in Asia are now prompting many international investors to reassess their investment strategies and plan for relocating their investments. Those changes are providing opportunities for Bangladesh to attract higher levels of FDI and take up production and marketing operations that are being shifted from other countries. In the backdrop of rising wage rate and production cost in many Asian countries attractive, the EPZs of Bangladesh have the potential to become lucrative sites for transfer of investment resources.

Bangladeshi EPZs are excellent places for setting up labour-intensive high-tech industries and relocation of sunset industries from abroad. As a consequence of low wage-bills and import cost, the cost of production can be kept very low. A number of countries have already shown interest to set up private EPZs in Bangladesh.

One South Korean investor is already setting up a private EPZ on the bank of the river Karnaphuli in Chittagong. This EPZ will cover an area of 2600 acres and is likely to be operational within the next two years. The government is sanctioning additional private EPZs and industrial estates for large-scale industrialisation in the country.

Ahmed is a civil servant in Bangladesh