The Embassy of Japan in Bangladesh and the Centre for Policy Dialogue (CPD) co-organized a seminar on “Bangladesh-Japan Relationship: Trade and Investment.”
In the seminar, Executive Director of CPD Dr Fahmida Khatun delivered a lecture on the potential of strengthening the bilateral relationship between Bangladesh and Japan, especially regarding trade and investment, and shared a summary of her experiences during her visit to Japan in February this year.
The presentation delivered by Khatun was part of a research study conducted by CPD in 2022 on the occasion of the 50 years relationship between Bangladesh and Japan, reads a press release.
The study was conducted based on existing literature and interviews with Bangladeshi and Japanese experts and policymakers.
Following Khatun’s presentation, a panel discussion session was held, which was moderated by Hiroki Haruta, the first secretary and the head of the economic section of the Embassy of Japan in Bangladesh.
The panel session also hosted four distinguished panel members including Dr Fahmida Khatun, Dr Masrur Reaz, chairman and founder of Policy Exchange Bangladesh, Yuji Ando, country representative of Jetro Dhaka Tareq Rafi Bhuiyan (Jun), managing director of New Vision Solutions.
The seminar also included a soft launch of the forthcoming book to be published by Palgrave Macmillan titled “Bangladesh-Japan Partnership: The Next Development Journey,” co-authored by Dr Fahmida Khatun, Syed Yusuf Saadat, Kashfia Ashraf and Afrin Mahbub.
The introductory remarks for the seminar were delivered by Iwama Kiminori, the ambassador of the Embassy of Japan in Bangladesh. He mentioned Dr Fahmida Khatun’s recent visit to Japan, where she engaged with prominent Japanese economists and Bangladeshis active in Japan.
He highlighted that one of the purposes of the seminar was to share Khatun’s experiences and discuss ways to enhance the trade and investment relationship between Bangladesh and Japan.
Given the successful visit of Bangladesh’s Prime Minister last month, Kiminori expressed the need to move forward and follow up on the discussions. He emphasized that the seminar would discuss ways of improving the business environment in Bangladesh to attract more Japanese foreign direct investment (FDI) and explore the potential of an Economic Partnership Agreement (EPA) between the two countries.
Furthermore, Kiminori mentioned his pleasure to be part of launching the forthcoming book titled “Bangladesh-Japan Partnership: The Next Development Journey.”
In her opening remarks, Dr Fahmida Khatun briefly spoke about her visit to Japan where she met with Japanese experts and policymakers from the government to understand how the relationship between Bangladesh and Japan could be taken forward.
Khatun recalled that Bangladesh and Japan established diplomatic ties in 1972, but their relationship went back even before Bangladesh gained independence.
Currently, Bangladesh is undergoing a double transition and faces challenges posed by the Fourth Industrial Revolution. Trade with Japan has shown improvement since Bangladesh’s independence, with Bangladesh exporting to Japan in the ready-made garment, leather, footwear and textile sectors.
To promote investment, a Japanese Economic Zone is being constructed in Araihazar, Narayanganj, with tax exemptions, income tax immunity, duty-free exports, cash incentives and bonded warehousing facilities.
The Bangladesh-Japan relationship can be strengthened through foreign policy and trade agreements, the BIG-B initiative and development cooperation.
Bangladesh has found Japan to be an exceptional development partner, displaying unparalleled dedication, quality and sincerity in their relationship. Khatun further added that the experience of interacting with Japanese experts and policymakers has revealed a humble and polite, yet focused and sincere approach.
Japan’s cultural blend of East and West, along with its high level of development and rich cultural values, resonates well with Bangladesh. Her trip provided an excellent opportunity to discuss collaborative efforts and explore avenues for cooperation. Impressively, Japanese libraries even house physical copies of Bangladeshi books, reflecting the positive impression Japan holds of Bangladesh.
During the panel discussion, Khatun emphasized the importance of skills development and addressing climate change in Bangladesh. The country has committed to the Nationally Determined Contributions (NDC) to reduce carbon emissions and needs to establish a clean and green production system.
She mentioned that Japan has targets for clean energy investment and the private sector can collaborate with Japanese companies to explore nature-based solutions.
Dr Masrur Reaz mentioned that the pull factor from the Japanese side primarily drove Japan’s engagement with Bangladesh. Japan is strongly interested in Bangladesh due to its long-term growth prospects, demographic dividend and cost competitiveness.
Reaz suggested two key areas for Bangladesh: moving away from ad hoc general investment promotion practices and adopting an integrated trade and investment approach.
He highlighted the example of the BIG-B project, which can create an economic corridor catering to regional markets and attract more investment from Japanese companies.
Yuji Ando mentioned several important factors for Bangladesh to achieve cost competitiveness and increase exports, particularly to Japan.
He highlighted the importance of a free trade agreement (FTA) or economic partnership agreement (EPA) to compensate for the loss of GSP+ facilities. He also suggested developing platform industries and procuring raw materials domestically to reduce costs.
Finally, he urged the Bangladesh government to assess the business environment and learn from Asean countries to promote greater investment and export activities.
Tareq Rafi Bhuiyan (Jun) discussed the findings of a Jetro survey in 2022, which revealed that Japanese companies are interested in expanding their business in Bangladesh.
However, 67% of respondents cited a lack of skilled labour as a major issue. To address this issue, Bangladesh should follow the example of India, which established the Japan Institute of Management (JMI) to train 30,000 engineers over the next decade.
He also highlighted the importance of ensuring the satisfaction of existing investors in Bangladesh, by addressing taxation policies, foreign exchange policies, customs clearance delays and transfer payment procedures.
The panel discussion was followed by an intriguing open-floor discussion. High-level policymakers, diplomats, foreign delegates, researchers, development practitioners, academics, business leaders, civil society representatives, international development partners and journalists participated in the seminar.