The progress of special economic zones’ development is yet to match to the government’s strategy to tackle regional disparity in the country, according to a study report.
The report suggested more attractive special incentives for investors in lagging-behind regions than elsewhere as offsetting against disadvantages of location.
Centre on Budget and Policy of Dhaka University, UK Aid and The Asia Foundation jointly conducted the study titled ‘promoting inclusive growth in Bangladesh through special economic zones’.
The research team on July 24 shared the study findings with the Bangladesh Economic Zone Authority at its conference room in Dhaka.
The report recommended focusing on a few major SEZs in less developed areas in the country and policy attention for effective implementation to exploit economic benefits from the initiative.
Too many sub-optimally-sized SEZs would not be able to exploit agglomeration of economies, especially when these were established in urban centres, it said.
Connectivity of the less developed regions with major economic corridors should also be another important consideration, it added.
The report said that the strategy delineated in the Seventh Five-Year Plan (7FYP) for tackling regional disparities strongly suggested attaching priority to the divisions in the western part of the country.
‘This is yet to be matched by the progress of SEZ development so far,’ it said, adding that the problem could be better addressed by aligning strategy with the actual zone development work on the ground.
According to the report, availability of skilled workforce for SEZs, particularly in less developed regions, can be a major challenge whereas skill development is extremely important for economic viability of SEZs in the regions.
Proper utilisation of allotted serviced plots, ensuring access of small and medium enterprises and their participation in the SEZs is critical and also a policy challenge.
The study reviewed SEZ-related regional development issues and undertook policy experiments to assess the potential impact of pursuing different types of investment regimes for lagging-behind regions.
According to the study report, most of the increased production activities at the SEZs will concentrate in the relatively better-off greater Dhaka and Chittagong regions without any targeted intervention given the current excessively skewed distribution of manufacturing production in favour of these regions.
Simulation results of the study said that promoting exports from SEZs in lagging-behind regions could have a strong impact on employment generation, including for women.
The Bangladesh Economic Zone Authority is working to develop 100 special economic zones in the country to facilitate economic growth, job creation and export.
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