MINDSPEAK

Overview of Japanese investment policies in Bangladesh

Md Talebur Islam Rupom | Published: 00:00, Nov 01,2020 | Updated: 01:33, Nov 01,2020

 
 

Bangladesh has been enjoying a fairly congenial economic and diplomatic relationship with Japan for the last five decades. Recently, Japan has added Bangladesh to the list of the countries that will qualify for subsidy for the Japanese companies which relocate their production base out of China. Md Talebur Islam Rupom reflects on Japan-Bangladesh relationship and writes how Bangladesh can gain from this bilateral relationship

WHEN the conflict of Sino-America is getting hot, Japan remains as a silent super-economy. Perhaps, for this reason, the mega-investments of Japan in many countries including Bangladesh go unheeded. But in reality, Tokyo is always playing an essential role for Dhaka and the five decades of continuous bilateral economic relations is proof to that.

In these five decades, the relationships of Bangladesh with other countries changed many times depending on international politics and fluctuating economic relations. On the one hand, these relationships were closely linked to politics that determines national interests. On the other hand, Dhaka-Tokyo has maintained a consistent and stable relationship.

Since the independence of Bangladesh in 1971, Dhaka has been always in good terms with Tokyo. Additionally, the people of Bangladesh have soft-corner to the Japanese.

Recently, Japan has added Bangladesh to the list of the countries that will qualify for subsidy for the Japanese companies which relocate their production bases out of China. According to Nikkei Asian Review, in order to diversify its supply chain, Japan has decided that Japanese manufacturers will now be eligible for subsidies if they shift production out of China to India or Bangladesh.

Manufacturers can receive subsidies for feasibility studies and pilot programmes. The total allocated amount is reportedly expected to run into tens of millions of dollars as per Nikkei report.

Besides, Ito Naoki, ambassador of Japan to Bangladesh announced recently that Japan would make investments in the Araihazar special economic zone, outskirt of the capital Dhaka, which will be the largest investment in Asia.

Outwardly, it should be a good deal for Bangladesh as it is hard to attract investors by competing with other countries like Southeast Asia’s Vietnam and Indonesia, where doing business is statistically easier. Most especially, Vietnam is coming as an emerging economy with cheap labour and other privileges. Hanoi has already taken the praise for its outstanding control on COVID-19 cases. Apparently, this single party state has put its whole arsenal to tackle the novel coronavirus. Hence, the foreign investors are finding Vietnam as an immediate solution and favourable invested spot.

Additionally, the pandemic has allowed them to increase their diplomacy and economic activities with the European countries and their old foe, the USA. Considering the condition of international relations, recent achievements of Dhaka-Tokyo relationship is noteworthy.

Historically, in Bangladesh, Japanese has a good reputation in terms of ethics and morality. Usually, other countries and local construction companies take more time to complete any infrastructures; corruption and lack of work integrity is also an issue. But Japanese are always praised by the national media and the people of Bangladesh.

It is reported that all the constructions such as big bridges and other mega projects, Japanese are the only one who have completed many of their projects timely and also, in lower cost than the budget. Likewise, the five decades consistent relationship, Japanese, widely known as workaholic nation with great work ethics has earn the praise through their work. The approach of their foreign and economic policies towards the world is less aggressive compared to the other super-economy.

Many students from Bangladesh are studying and thereafter make their career in Japan. In fact, the demands of Bangladeshi IT students cum experts are in high number reportedly by Nikken Review. Sapporo, Japan’s third fastest growing city and also having the highest foreign population is evidently seeing many engineers and experts from Bangladesh alongside Tokyo and Kyoto. This is the sign of a good public diplomacy between the biggest delta of the world and the Blue Samurai.

However, geopolitics is turning into a complex situation than ever as Bangladesh is a crucial player in the regional and global cold war. When Japan wants to decrease their dependency on manufacturing from China, Dhaka is also having mega deals with Beijing. On top of that, historically Tokyo’s relation with Beijing is not simple but complicated. In the race of being a superpower, the conflict exists between the two parties.

The postponing of Tokyo Olympic 2020 allows Japan to utilise the mega amount of the Olympic budget in various investment until 2021. It adds more values when most of the countries are in the risk of recession including top powers such as the USA and UK.

Although tourism industry is hit by the COVID-19 outbreak and Olympic 2020 would have certainly brought out huge profit in this sector for Japan, it will still keep them in a comfortable situation as it is the common scenario of other superpowers. Japan is one of the developed countries that have never imposed lockdown in their country amid of novel coronavirus.

Conflict of Beijing and New Delhi has been exposed after the bloodshed at Galwan Valley, Ladakh between soldiers of these two countries. India has boycotted many Chinese products and online applications. However, India’s economy is collapsing so Tokyo can make their investment in India with cheaper labour.

Nonetheless, Dhaka has to compete with not only Vietnam or Southeast Asian countries but also its peer New Delhi. Recent failure of New Delhi’s strategy will keep Dhaka ahead of any mega investment from the side of Tokyo. But in the desperation to save the broken economy, New Delhi would go more aggressively to secure the mega investment.

Dhaka must maintain the balance as China’s relationship with Bangladesh is deepening than ever with a plenty of mega projects and debt. The terms and conditions of Beijing are reportedly more complicated for home countries although China is providing Dhaka which is necessary too. Specially, to reduce Dhaka’s dependency on New Delhi, Beijing is giving the support.

However, China’s allying with Pakistan now and during the liberation war of 1971 is still apparent. So, the question remains for our policy makers — will they prioritise Beijing or Tokyo or be able to keep the smart diplomacy with both the parties?

Changing of leadership in Japanese cabinet with Yoshihide Suga as the successor of Shinze Abe would not bring any significance change in foreign policies especially with Dhaka as Bangladesh has the same prime minister for last decade. It allows other countries to keep consistency with Dhaka in terms of stable foreign policies.

Eventually, Dhaka is in negotiating situation where they can bargain for the best price and handle the long dispute with India. So, it should utilise this opportunity in favour of the people Bangladesh. Our trade policies can be friendlier for foreign investors.

Md Talebur Islam Rupom is a contributor with the New Age Youth.

 

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