The government is mulling over a policy to engage the private sector in the development of special economic zones. Sources at the Ministry of Industries told that the government has recently abandoned its plan to set up four SEZs for small and medium enterprises in four divisions as it now thinks of a broader policy to involve private entrepreneurs in the initiative.

Board of Investment in association with World Bank Group is studying how to draft a policy for development of special economic zones, which have spurred industrialisation and encouraged foreign investment in many countries. The investment promotion agency would seek opinion from all stakeholders to make the policy flawless. The government would encourage private entrepreneurs and private-public partnership for developing SEZs.

World Bank Group, which promotes SEZs in many developing countries, has analysed the performance of existing industrial zones in Bangladesh and recommended that Bangladesh needs development of SEZs to encourage investment. The World Bank would launch a report and submit it to the authorities concerned next month, highlighting the benefits of SEZs. Trade bodies feel that want of serviced industrial land and complicated land acquirement process put both foreign and local investors to trouble, and delay their planned investments.

IFC finds that Bangladesh’s current economic zones suffer from some deficiencies-very little private participation, unfavourable locations, poor environmental management, limited linkages with rest of the economy and low service standards. SEZs, in different countries, effectively cater to the need of entrepreneurs and successfully address their constraints -inadequate supply of infrastructure, utilities and regulatory hassles. SEZs are large areas where infrastructure investments, both in the public and private sectors, are carried out in a coordinated way and following a master plan.

In Bangladesh SEZs can play an important role in ensuring a more geographically balanced industrial growth in the country. SEZs work well only if these are designed well, the critical need to properly address the social dimensions of SEZ development, in particular the need to consult in advance with the people who will lose their land and provide adequate, timely and transparent compensations.

The economist observes that due to lack of proper infrastructures and poor availability of sites with necessary services, many potential entrepreneurs in the county are investing in housing projects and building shopping complexes instead of investing in industry. Special zones with attractive facilities may divert such capital and entrepreneurs to manufacturing sector and create opportunities for more employment and real revenues.