Bangladesh is becoming the new frontier of investment in Asia, said Ito Naoki, Japanese ambassador to Bangladesh.
"As per Japanese investment prospects from the investors' point of view, Bangladesh will establish itself as a destination of China Plus One investment. Companies are now looking for investment destinations beyond China," he told a discussion organised by the Diplomatic Correspondent Association of Bangladesh on Thursday at the National Press Club in Dhaka.
Lauding Bangladesh's achievement in Covid-19 management, the ambassador assured of supplying more vaccine doses in November, mainly through the Covax mechanism. Bangladesh got 30 lakh AstraZeneca vaccine doses from Japan in July and August this year.
Ito Naoki said the two countries are going to sign an exchange of notes to provide budget support focusing on the health sector.
Mentioning that there is another project in the pipeline, he also expressed hope that they will be able to provide support for the ICUs and related facilities by the end of this year or early next year.
Ito also assured of gifting various equipment to help Bangladesh in its fight against terrorism.
Noting that Japan has been cooperating with Bangladesh in various ways to curb terrorism since the Holey Artisan Bakery attack, he said the devices would be sent later this year or early next year as part of the continued cooperation.
Necessary equipment will be sent to hospitals in Bangladesh, including intensive care units (ICUs), by the end of this year or early next year, the Japanese ambassador said, adding his country will send patrol ships as gifts to the Bangladesh Coast Guard in November.
A potential destination for investment, but there are works to be done
"One of the lessons every country in Asia learned amid the pandemic is the issue of resilience of supply chain. So, companies involved in manufacturing in the region will be trying to diversify the points of manufacturing in the future. So, Bangladesh will be the possible destination of new investment," said Ambassador Ito Naoki.
Bangladesh is destined to shine up and transform, he observed, adding, "But still needs to work hard. Opportunities and possibilities are here. We just need the environment. Big infrastructures like those of Padma Bridge and Dhaka Metro Rail, are coming within five years."
Ito said once good infrastructure and environment is there, then Japanese companies will make a long term commitment to the market.
Once the corona pandemic ends, Japanese companies will expand operations here, he continued, 70% of the Japanese companies which have operations in Bangladesh are ready to expand their business operation here.
Data obtained from the Japanese embassy say the cumulative direct investment from Japan in Bangladesh amounted to $390.18 million until September 2020.
Furthermore, as of April 2021, some 321 Japanese companies were operating in the country. The number quadrupled from 83 in 2010.
The amount of investment in FY20, even amid the Covid-19 pandemic, was $60 million – about three times higher compared to FY10.
Ambassador Ito expressed hope that the FDI inflow into Bangladesh from Japan would increase with increased trade volume and greater presence of Japanese cooperation. He, however, emphasised the need for improving the investment climate and business environment.
"You really need to take care of those companies that are already in operation in Bangladesh. You need to make efforts to resolve the issues currently raised by the existing companies. Then, more FDI will come in, prospecting investors will come to make new investments," he said.
"I do really appreciate the government here has been working really hard to improve the investment climate since June last year under the very strong leadership of Prime Minister Sheikh Hasina. She, with her private investment adviser Salman F Rahman, took some very good initiatives.
"So, we have seen some tangible results like ground use of containers, reduction of registration fee for motorbikes, and adoption of automobile sector development policy."
Compared to one and a half years ago, the cost of doing business in Bangladesh has become slightly lower, the ambassador said, adding, "However, there remain some issues such as customs clearance – the number one concern for every foreign company."
Matarbari part of a free and open Indo-pacific vision
While answering a question, the ambassador said Matarbari deep sea development plan is a part of the vision of a free and open indo-pacific.
He further said Japan has been promoting the vision – peace, stability and prosperity in the entire region of Indian Ocean, Pacific Ocean, Bay of Bengal and Bangladesh as well.
"Pragmatic cooperation is the vision of free and open indo-pacific. Based on this idea, we have been promoting pragmatic cooperation in Bangladesh including Matarbari deep sea port development," Ito said.
Bangladesh will need an energy hub like Matarbari, he said, adding, "It is a game changer for Bangladesh. It will bring further development not only for Bangladesh, but also for the entire region," he added.
Investment in economic zones
The ambassador said the Araihazar special economic zone would be ready and expecting FDI by the end of next year. "Our plan is to have 100 companies and the investment would be $1 billion."
Once Araihazar becomes a success story, another economic zone will be developed by Japan, maybe in Mirsarai, and if that venture becomes successful, then there will be another – in Moheshkhali.
On the Rohingya issue, Ito Naoki said it is very difficult to predict in which direction the situation is going. "Repatriation is very important. Japan will continue to raise the issue of repatriation with Myanmar," he said.
Seeking sustained international pressure on Myanmar to achieve the Rohingya repatriation goal, the Japanese ambassador said the signing of an MoU between Bangladesh and the UNHCR, to begin UN engagement in Bhasan Char, will pave the way for even better cooperation and coordination on the Rohingya repatriation process.
"It's very important that the international community puts pressure on Myanmar as part of the repatriation work. How? I think it depends on the individual country," he said at the event.
DCAB President Pantho Rahaman and its General Secretary AKM Moinuddin also spoke at the event.