Introduction

In order to stimulate rapid economic

growth of the country, particularly through

industrialization, the government has adopted an Open Door Policy to attract foreign
investment to Bangladesh. The Bangladesh Export Processing Zones Authority (BEPZA)
is the official organ of the government to promote, attract and facilitate foreign investment
in the Export Processing Zones.
Two fully operating EPZs, one in Chittagong and the other near Dhaka have attacted a
wide range of investors. Another four EPZs, one at Mongla, a southern port city of
Bangladesh, one at Comilla, and unique place between Dhaka and Chittagong, one at
ishwardi near the Jamuna Bridge and the fourth one at Nilphamari named Uttara EPZ
near Syedpur Airport have already started operation. Other two EPZs Adamjee near
Dhaka and karnaphuli in Chittagong are progressing fast for allotment of plot to investors.
According to BEPZA Act, the objectives of BEPZA are: (i) to foster and generate
economic development of Bangladesh by encouraging

and promoting foreign

investments in a zones: (ii) to diversity the sources of foreign exchange earnings by

increasing export of Bangladesh through a zone : (iii) to encourage and foster the
establishment and development of industries and commercial enterprises in a zone in
order to widen and strengthen the economic base of Bangladesh, and (iv) to generate
productive employment opportunity and to upgrade labor and management skills through
acquisition of advanced technology (GOB 1994). Meanwhile, Chittagong Export
Processing Zone (CEPZ) and Dhaka Export Processing Zone (DEPZ) were established
which started functioning in 1983/84 and respectively. Currently, Bangladesh has been
promoting EPZ program more vigorously with the creation of four more EPZs in Mongla,
Comilla, Ishwardi and Uttara (Nilphamari) with a heavy claim on scarce

national

resources inviting a serious study and debate, It is important to see whether further
replication of the EPZs is worthwhile in terms of the national resources deployed and the
role the existing EPZs play in expediting the process of industrialization in Bangladesh
Objectives of the study
The objectiv of the present paper is to examine whether the EPZs have been
successful in achieving the desired goals as laid down in the, BEPZA Act and has
contributed to the industrialization process of the country. Promotion of FDI & Local
Investment

Promotion of Export

Promotion of Diversification of Export

Generation of employment

Development of Backward and Forward Linkage

Transfer of Technology.
Upgrade of Skill
Development of Management
Promotion of International Marketing.

Literature Review :
Bangladesh Economic SurveyBangladesh Institute of Development Studies
Board of Investment
The survey of BEPZA
The Survey of BGMEA
Bangladesh Economic Survey
Bureau of Bangladesh Statistics
Limitation of the Study :
Time constraints are the main draw back in collecting informations . Due to the
shortage of enough books and journal concerning the matter it is not possible the
collect actual and enough data.
Methodology :
The research paper is prepared by completely depending on secondary source
that includes research report, review of books, journals and other secondary materials.
General Features
Bangladesh offers an unparalleled conductive investment climate compared to the other
South Asian economics .
Bangladesh is a largely homogenous society with no major internal or external tensions
and a population with great resilience in the face of adversity (e.g. natural calamities).
Bangladesh is a liberal democracy and mostly a one race and one religion country. The
population of this country irrespective of race and religion have been living in total
harmony and understanding for thousands of years.
It enjoys broad non-partisan political support for maker oriented reform and offers the
most investor friendly regulatory regime in South Asia.
Bangladesh owns a trainable, enthusiastic, hardworking and low-cost (even by regional
standards) labor force suitable for any labor-intensive industry.
Geographical location of the country is ideal for global trades with very convenient access
to international sea and air route. Bangladesh is the bridge between ASEAN and SAARC
nations.

Bangladesh is endowed with abundant supply of natural gas, water and very fertile soil.
Although Bengali is the official language, English is widely spoken as second language,
English is widely spoken as second language. Majority of even moderately educated
population can read, write and speak in English.
As a result of low per capita GDP present domestic consumption is not significant,
However, it may be considered that there exists a middle class with significant
purchasing power. As economic growth picks up, the purchasing power will also grow
substantially and in a country of more than 133.4 million people, even a small middle
class may constitute a significant market.
Bangladeshi products other than armaments enjoy complete duty and quota free access
to EU, Japan, Canada, Australia, Norway and most of the developed countries .
However, for apparel export to USA, Bangladesh has a quota regime which is generally
favorable.
Regulatory and Legal Framework
Investment in Bangladesh is well protected by law and by practice. Major laws related to
foreign investment are:
The Foreign Private Investment (Promotion and Protection)Act of 1980
The Bangladesh Export Processing Zones Authority Act of 1980
The Investment Board Act of 1989
The Companies Act 1994
The Bangladesh Private Export Processing Zones Act of 1996
The Industrial Policy 1999
The Import Policy Order 2003-2006
Bilateral Investment Agreements
The Foreign Private Investment (Promotion and Protection) Act 1980 induces

guarantee of fair and equitable treatment to foreign private investment. Such national
treatment is also provided in bilateral investment treaties (BITs) for the promotion and
protection of foreign investment which was concluded with 24 countries listed below.
1.Austria

9. Italy

17. Switzerland

2. Belgium

10. Japan

18. The Netherlands

3. Canada

11.Korea, DPR

19.The Philippines

4. China

12.Korea,Republic of

20. Turkey

5. France

13. Malaysia

21. Thailand

6. Germany

14. Pakistan

22. UK

7. Indonesia

15. Poland

23. USA

8. Iran

16. Romania

24. Uzbekistan

CHAPTER THREE : REASONS FOR SETTING EPZ IN BANGLADESH

EPZ set up in Bangladesh due to various reasons Major reason among them is expedites
export activities and stimulates rapid economic growth.
These reasons are :

stimulate rapid economic growth

Enhance industrialization

Adopted with Open door policy i.e. Globalization

Attract foreign investment

Provide special areas where potential investor would get congenial investment

climate.
Smooth export procedure, free from cumbersome procedures
Development export promotion strategy
More employment generation
Development of export oriented industries
Proper use of domestic available raw materials

CHAPTER FOUR : THE BEPZA ACT- 1980

An Act for the establishment of the Bangladesh Export Processing Zones Authority.
Whereas it is expedient to make provision for the establishment of the Bangladesh
export processing Zones Authority for creation, development, operation, management
and control of Export Processing Zones and for matters connected therewith . It is hereby
enacted as follows:
Short title and commencement:
(1) This Act may be called the Bangladesh Export Processing Zones Authority Act, 1980,
(2) It shall come into force on such date as the Government may, by-notification in the
official Gazette, appointDefinitions :
In this Act, unless there is anything repugnant in the subject or context
(a) Authority means the Bangladesh Export Processing Zones Authority established
under section 3.
(b) Board means the Board of Governors of the Authority,
(c)Executive Board means the Executive Board of the Authority
(d) Executive Chairman means the Executive Chairman of the Board.
(e) Prescribed means prescribed by rules made under this Act. and

(f) Zone means a place or place or places to be specified by the Government under
Section 10 as a Export Processing Zone for the purposes of setting up export- oriented
industries .
Type of Investment
Type- A 100% foreign owned including Bangladeshi nationals ordinarily resident in
Abroad
Type B Joint venture between foreign and Bangladeshi entrepreneurs resident in
Bangladesh.
Type- C 100% Bangladeshi entrepreneurs resident in Bangladesh.
Mode of Investment
Investment in convertible foreign currencies by foreign investors, Option to establish
public/ private Ltd. companies or sole proprietorship/ partnership concerns.
Investment Guarantee
Foreign Private Investment (Promotion and Protection) Act, 1980 secures all foreign
investment in Bangladesh. OPICs (Overseas Private Investment Corporation, USA)
insurance and finance programmes operable. Security and safeguards available under
Multilateral investment Guarantee Agency (MIGA)of which Bangladesh is a member.
Arbitration facility of the International Center for the Settlement of investment Dispute
(ICSID) available.
Tele-communications
E-mail, internet, Fax ISD, NWD & Cellular services are abailabe.
Communication
Adequate sea, rail, road and air communication services are available.
One window same day service and simplified procedure
BEPZA
-Issues import/Export permits
-Provides infrastructure facilities
-Offers One Window Same Day service
-Potential investors are required to deal only with BEPZA for investment and all other
operational purposes.
Work Force
Bangladesh offers a substantial manpower reserve skilled, semi-skilled & un-skilled.
BEPZA is vested with the responsibility to administer labour matters for matters for all
its enterprises.

Average Monthly wages

Apprentice/ Trainee

US $ 22.00

Unskilled

US $ 38.00

Semi-skilled

US $ 45.00

Skilled

US $ 63.00

Other benefits include Conveyance Allowance, House Rent, Medical Allowance,

Maternity Benefit, Festival Bonus and Overtime Benefit.
Working Hours
48 hours week in a factory
39 hours week in an office
Employees Leave
10 days casual leave in a year
17 days Earned leave in a year
14 days sick leave in a year
10 days Festival holiday in a year
Package of Incentives
FISCAL
10 years tax holiday
Duty free import of construction materials
Duty free import of machineries, office equipment & spare parts etc.
Duty free import and export of raw materials and finished goods
Relief from double taxation
Exemption from dividend tax
GSP facility available
Duty free import of 2/3 vehicles
Expatriates exempted from income tax for three years

1.
2.
3.
4.
5.
6.
7.
8.
9.

10. Accelerated depreciation on Machinery or plant allowed

11. Remittance of Royalty, Technical and Consultancy Fees allowed
12. Duty and Quota Free Access to EU, Canada, Norway, Australia etc.
NON-Fiscal
1.100% foreign ownership permissible
2. Enjoy MFN status
3. No ceiling on foreign and local investment
4. Full repatriation of capital and dividend
5. Foreign currency loan from abroad under direct automatic route
6. Non-resident Foreign Currency Deposit (NFCD) Account permitted

7. Operation of FC account by `B and `C type industries allowed

Facilities
1.
No UD. IRC and renewal of bond license
2.
Work permits issued by BEPZA
3.
Secured and protected bonded area
4.
Off shore banking available
5.
Freedom from import and export policy restrictions
6.
Import on Documentary Acceptance (DA) basis
7.
Back to Back L/C
8.
Import and export on CM basis allowed
9.
Import form DTA (Domestic Tariff Area)
10. 10% sale to DTA (Domestic Tariff Area)
11. Customs clearance at factory site
12. Simplified and hassle-free sanction procedure
1.
13. Sub-comtracting with export oriented industries inside and outside EPZ allowed
14. Relocation of foreign industries allowed
15. Resident ship and Citizenship
Infrastructure
1.
Basic infrastructure : electricity, water & gas
2.
Fully serviced plots available
3.
Factory building available on rental basis
4.
Enclave for workers Dormitory and Day Care Centre
5.
Warehouse/ godown available.
A Japanese Lense Factory in EPZ
Support Services
Business : Courier, Fire Station, Post Office, C&F Agent, Shipping Agent, MTO etc.
Administrative : Commissariat, investors Club, Medical Centre, School and College,
Public Transport etc.
Others : Customs Office, Police Station, Banks Restaurant, Health Club, Recreation
Centre, Centre, In- house Security, Sports Complex, Exclusive Telephone Exchange,
Electricity Sub-station .
Indicative List of Industries
Garments and Garments Accessories, Textiles Agro-based industries, Chemicals
Backward and Forward linkage industries, Electrical equipment

and components

Electronic products, Software, optical goods, Woven and knitted fabrics, Engineering
products, Leather products and Foot-wear, Toys Medical and Biological instruments,
Pharmaceutical products, Plastic molded, products Industries based on new uses of jute,

Cutting / Polishing of precious and semi

equipment,

Head-wear

Jeweler

precious stones, Household fittings and

Homological

instruments,

Scientific

measuring

instruments, Aircraft instruments Laboratory ware, Printing and Publishing, Printing and
copying equipment and accessories.
Chittagong Export Processing Zone
Location
South Halishahar 3.10 kms from the Sea Prot, 5.50 kms from the main business center,
7.21 kms from the Chittagong international Airport
Profile of Zone
Zone area : 183.37 hectares (453 acres)
Number of Industrial Polts. 428 Size of each plot : 2000 sqm
* Tariff : US$2.00/sqm/ year.
Space of Standard Factory building : 58244.98 sqm
* Tariff : US$ 2.50 sqm/ month.
Space of Warehouse : 2667.79 sqm
* Tariff : US$ 2.50/ sqm/ month
* Utility Service
Water Supply : From chittagong WASA Storage capacity : 7.26 million liters/ day
* Tariff : TK. 17.71/cu-m
* Gas Supply : From Bakhrabad Gas System Ltd.
* Tariff : TK 5.76/cu-m
Power Supply : 11 kv. 3phase, 50 cycles/sec
* Tariff : TK 3.98/kwh
Dhak Export Processing Zone
Location
Ganakbari, Savar, 5 kms from Dhaka city center, 25 kms from Zia International Airport
304 kms from chittagong sea port.
Profile of Zone
Zone area : 143.70 hectares (346.51acres).
Number of Industrial Plots : 388 size of each plot : 2000 sqm
*Tariff : US $ 2.00/ sqm/ year
Space of standard Factory Building: 79843.19 sqm
Tariff : US $2.50/ sqm/month
Space of Warehouse : 2356 sqm

Tariff : US$ 2.50 sqm/month

Utility services
Water supply : Own water supply system
Tafiff : TK. 17.71 / cu-m
Gas supply : From Titas gas Field
Tariff : TK. 5.76 /cu-m
power Supply : 11 kv,3 phase, 50 cycles/sec
Tariff : Tk. 4.18/ kwh
Tariffs are subject to change from time to time .
MONGLA EXPORT PROCESSING ZONE
Location
Mongla port area, Bagerhat, 105 kms from Jessore Airport, 397 kms from Dhaka and 664
kms from chittagong Sea Port
Profile of Zone
Zone area : 186.21 hectares (460 acres) Number of industrial Plots : 162 (first phase)
size of each plot : 2000 sqm
Tariff : US $ 1.00/sqm/year.
Space of standard Factory Building : 18000 sqm
Tariff : US $ 1.25/ sqm/month
Utility Service
Water Supply : Sweet water from public Health Engineering Department and own
supply network.
Tariff : TK. 17.71/ cu-m
Gas Supply : From Shahabajpur Gas Field ( Proposed)
Tariff : TK. 5.76 / cu-m
Power Supply : 11kv. 3 phase, 50 cycles/sec
Tariff : TK. 4.18 /kwh
COMILLA EXPORT PROCESSING ZONE
Location
Comilla old Airport area. 167 kms from Chittagong Sea Port, 97 kms from Dhaka
Profile of Zone :
Zone area : 104.44 hectares (258 acres) Number of industrial Plots : 208 (first phase)
size of each plot : 2000 sqm
Tariff : US $ 1.00/sqm/ year.

Space of standard Factory Building : 18000 sqm

Tariff : US $ 1.25/ sqm/month
Utility Service
Water Supply : own water supply system
Tariff : TK. 17.71/ cu-m
Gas Supply : From Bakhrabad Gas System Ltd.
Tariff : TK. 5.76 / cu-m
Power Supply : 11kv. 3 phase, 50 cycles/sec
Tariff : TK. 4.18 /kwh
ISHWARDI EXPORT PROCESSING ZONE
Location
Pakshi, Pabna Pakshi Bridge through by pass road 3.7 kms, 10.60kms,

from

ishwardiAirport, 130 kms from Jamuna Bridge 280 kms from Dhaka 255 kms from
Mongla Port, 110 kms from Rajshahi Airport and 412 kms from chitt agong Sea Port.
Profile of Zone
Zone Area :124.99 hectares(308.77 acres)
Number of Industrial Plots : 2000 sqm
Tariff : US $ 1.00/ sqm / year
Space of Standard Factory Building : 18000sqm
Tariff :US $1.25 /sqm /month
Utility Services
Water Supply :Own water supply system
Tarrif:17.71 /cu-m
Gas Supply :From Gas Transmission Company Ltd.
Tariff : 5.76 / cu-m
Power Supply : 11 kv, 3phase, 50 cycles/ second
UTTARA EXPORT PROCESSING ZONE
Location
Shongalshi, Nilphamari, 18 kms from syedpur Airport, 401 kms from Dhaka, 650 kms
from Chittangong Sea Prot. 586 kms from Mongla Prot.
Profile of Zone
Zone area : 93.20 hectares (230.21 acres) Number of Industrial Plots : 155 (first phase
Size of each plot : 2000sqm
Tariff : US $ 1.00/sqm/year

Space of Standard Factory Building : 18000 sqm

Tariff : US $ 1.25 sqm/ month
Utility Service
Water Supply : Own Water supply system
Tariff : TK. 17.71/cu-m
Gas Supply : From Gas Transmission Company Ltd. (Western Zone Project, Proposed).
Tariff : Tk 5.76/ cu-m
Power Supply : 11kv, 3 phase, 50 cycles/sec
Tariff : Tk .4.18/ kwh.
ADAMJEE EXPORT PROCESSING ZONE
Location
Adamjee Nagar, Shiddirgonj, Narayanganj.15 kms from Dhaka city center, 40 kms from
Zia International Airport, 255 kms from Chittagong Sea Port.
Profile of Zone
Zone Area :118.62 hectares (293 acres)
Number of Industrial Plot: 200 (60 in 1st phase)
size of each Plot : 2000 sqm
Tariff : US $ 2.00/ sqm / year
Space of Standard Factory Building : 42737sqm
Tariff :US $ 2.50//sqm /month
Utility Services
Water Supply :Own water supply system
Tarrif:17.71 /cu-m
Gas Supply :From Titas Gas Field
Tarrif:Tk 5.76 /cu-m
Power Supply : 11 kv, 3 phase, 50 cycles/sec
Tariff : 3.98/kwh.
KARNAPHULI EXPORT PROCESSING ZONE
Location
Chittagong Steel mill Area, North Patenga. 5.6 kms from Chittagong sea Port, 8 kms from
main business centre of chittagong, 4.7 kms from chittagong international Airport.
Profile of Zone
Zone Area :90.04 hectares (222.42 acres)
Number of Industrial Plot: 211 (100 in 1st phase)

size of each Plot : 2000 sqm

Tariff : US $ 2.00/ sqm / year
Space of Standard Factory Building : 2974 sqm
Tariff :US $ 2.50//sqm /month
Utility Services
Water Supply :From chittagongWASA & own supply by treatment plant.
Tarrif:17.71 /cu-m
Gas Supply :From Bakhrabad Gas system Ltd.
Tarrif:Tk 5.76 /cu-m
Power Supply : 11 kv, 3 phase, 50 cycles/sec
Tariff : 3.98/kwh.
* Tariffs are subject to change from time to time.
CHAPTER SIX : PERFORMANCE OF INDUSTRIES UNDER EPZ
Most of the FDI (87%) have been brought by companies registered with the Board of
Investment, the balance (13%) have been invested in companies registered with
Bangladesh Export Processing Zones Authority (BEPZA).
Source : Bangladesh Economic Review 2006.
Table 6.3 : FDI Inflow in Bangladesh during 2005-Distribution by Regulatory Agencies (in
Million US$)
FDI Components

BOI- Registered Entities 2005

Jan-Jun

Jul-Dec

BEPZA- Registered Entities 2005

BOI

Jan-Jun

Jul-Dec

Total
a. Equity Capital
b. Reinvested

Earnings
c. Intra-

Company

Total

BEPZA

FDI- 2005

Total

242.7

168.1

410.8

9.6

5.2

14.8

425.6

124.7

89.1

213.8

19.4

14.3

33.7

247.5

51.4

58.5

109.9

33.9

28.4

62.3

172.2

418.8

315.7

734.5

63.0

47.8

110.8

845.3

Loans
Total

Source : Bangladesh Bank Enterprise Survey, 2006.

Performance of Industries under Bangladesh Export Processing Zone Authority (BEPZA).
Table 6.3 shows the number of industries, investment cost, manpower and export
performance of the seven EPZs at Dhaka, Chittagong, Comilla, Mongla, Uttara, Ishwardi
and Adamjee upto June 2006. 242 industrial units were operational in these seven

zones with a total investment cost of US$ 979.46 million. A total 1,77,809 manpower has
been employed in these industries. Besides, establishment of a total of 133 industrial
units (32 in Chittagong EPZ 26 in Dhaka EPZ, 22 in Comilla EPZ, 14 Iswardi EPZ, 18 in
Mongla EPZ, 6 in Uttara EPZ, 9 in Adamzee EPZ and 6 Karnaphuli EPZ) is underway .
According to the project proposal, another 66.007 jobs will be created, once those
industrial units are operationalised. During the FY 2005-06 commodities worth US$ 1830
million were exported from the mills and factories of EPZ, which accounted for 18 percent
of national exports.
Table 6.3: Industries under Bangladesh Export Processing Zone (EPZ) and their
Performance in terms of Investment and Employment Generations (Up to June 2006)
Goods

Number of Industries

Readymade Garments
Electronics
Textile goods
Metal goods
Leather goods
Plastics goods
Cap
Terry towel
knit textile
Garment goods
Others
Total

Total Investment (Million

Total

US$)

Manpower

49

253.28

94,742

15

52.27

3,001

26

239.23

20,158

12

20.57

815

12

52.36

5.280

13

21.24

1,025

07

43.12

12,583

16

34.89

4,491

21

84.28

19,028

30

76.01

6,013

41

102.19

10,674

242

979.46

1,77,809

Source: (BEPZA).
Table 6.4: Annual Investment and Exports Status in EPZs located at Dhaka, Chittagong,
Mongla, Comilla, Uttara, Ishwardi and Adamjee (1997-98 to 2005-06).
(Million US$)
EPZ

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

Dhaka
Chittagong

Total
Invest

26.24

35.50

19.80

24.06

32.01

59.14

49.36

51.35

259.57

364.73

447.51

466.76

554.79

66.60

757.73

36.11

15.18

24.30

22.37

42.14

55.43

45.31

452.12

526.09

620.36

680.70

641.28

679.01

772.39

0.00

0.00

0.00

0.05

0.43

0.11

0.80

1.49

Total
0.00
Export

0.00

0.00

0.00

1.55

3.00

3.21

7.83

0.00

0.00

0.00

0.00

0.64

1.05

9.03

19.01

Total
0.00
Export

0.00

0.00

0.00

0.01

1.15

4.10

9.66

0.00

0.00

0.00

0.00

0.16

0.20

0.42

0.72

Total
0.00
Export

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.10

0.50

0.05

Total
0.00
Export

0.00

0.00

0.00

1.09

0.00

0.00

0.00

0.00

Total
0.00
Export

0.00

0.00

0.00

Total
185.64
Export
Total
Invest

42.59

Total
450.41
Export
Mongla

Comilla

Uttara

Ishwardi

Adamjee

Total
Invest

Total
Invest

Total
Invest

Total
Invest

Total
Invest

Total Investment

68.83

71.61

34.98

48.41

55.71

103.14

115.05

118.52

Total Export

636.05

711.70

890.73

1067.91

1149.02

1200.22

1353.91

1548.68

Source : (BEPZA) June, 2006.

CHAPTER SEVEN: EPZ : CONTRIBUTION TO ECONOMY.
Investors from 30 countries :
Types of investment (UPTO June, 2007)
A- 100% Foregn ownership

161

B- Joint Venture

43

17%

C 100% Local Venture

60

23%

Total in op

264

U/IMP withla

102

Sanctioned ind

55

60%

100%

Table 7.1: Monthly wages in EPZs of Bangladesh

MONTHLY WAGES IN EPZs OF BANGLADESH

US$

Countries

132

El Salvador

100

China

88

Guetemala

85

Vicarage/ Nicaragua

80

Vietnam

78

Hundurus

75

Thailand

65

Pakistan

64

Indonesia

30

Bangladesh
Zone

Land

EPZ-Chittaagong, EPZ-Dhaka

2.20

SFB
2.75

EPZ-Comilla, EPZ-ADAMJEE
EPZ-KARNAPHULI
EPZ-MONGLAN, EPZ-ISHWARDI

1.00

1.25

EPZ-UTTARA
Table 7.2 : SERVICE CHARGE UTLITIES
ZONE

ELECTRICITY

GAS

WATER

(US$ / KWH)

(US$ /

(US$ / CUM)

CUM)
EPZ-Chittagong, EPZ-

0.05

0.08

.025

0.06

0.08

0.025

Ishwardi
EPZ- ADAMJEE
EPZ- KARNAPHULI
EPZ-Dhaka

EPZ- Comilla
EPZ- Mongla
EPZ- Uttara
RATE INCLUDES SERVICE CHARGE
Table7.3 : Investment
INVESTMENT (UPTO JUNE 07)
YEAR

Investment ($m)

YEAR

INV ($m)

1994-1995

35.93

2001-2002

55.70

1995-1996

30.58

2002-2003

102.63

1996-1997

53.90

2003-2004

115.05

1997-1998

68.83

2004-2005

118.52

1998-1999

71.61

2005-2006

112.89

1999-2000

34.98

2006-2007

152.37

2000-2001

48.40

TOTAL INVESTMENT = $ 1132.26m

Table 7.4:Export (up to June 07)
EXPORT (UPTO JUNE 07)
YEAR

Export ($m)

YEAR

Exp ($m)

1994-1995

228.26

2001-2002

1077.02

1995-1996

337.02

2002-2003

1200.00

1996-1997

462.77

2003-2004

1354.00

1997-1998

636.05

2004-2005

1548.68

1998-1999

711.69

2005-2006

1836.18

1999-2000

890.81

2006-2007

2063.67

2000-2001

1067.87

Total Export : $ 13.90: 47m

TOTAL EXPORT = $ 13,903m
Table 7.5: Employment
EMPLOYMENT (UPTO JUNE 07)

YEAR

No. of EMPLOYE

YEAR

No of EMPL

1994-1995

6,141

2000-2001

16,020

1995-1996

10,706

2001-2002

8,764

1996-1997

12,773

2002-2003

10,167

1997-1998

14,049

2003-2004

10,071

1998-1999

14,059

2005-2006

23,021

1999-2000

9,890

2006-2007

23,360

TOTAL : 2,01,169
Table 7.6: BEPZAs CONTRIBUTION
TOWARDS TOTAL NATIONAL EXPORT
towards National Export
BEPZAs CONTRIBUTION

TOWARDS TOTAL NATIONAL EXPORT

YEAR

TOTAL EXPORT OF

TOTAL EXPORT OF EPZ

% OF BEPZA;s CONTRIBUTION

BANGALADESH
1994-1995

3473

228

6.56

1995-1996

3882

337

8.68

1996-1997

4418

463

10.48

1997-1998

5161

636

12.32

1998-1999

5313

712

13.40

1999-2000

5752

891

15.49

2000-2001

6467

1068

16.51

2001-2002

5986

1077

18.00

2002-2003

6548

1200

18.33

2003-2004

7603

1354

17.80

2004-2005

8655

1549

17.90

2005-2006

10526

1836

17.44

Table7.7 : COUNTRY WNTERPRISES (UP TO JUNE 07)

COUNTRY WNTERPRISES (UP TO JUNE 07)
SL

COUNTRY

UNIT

INVEST

(Nos)
1.
2.
3.
4.
5.
6.

S. Korea
Bangladesh
Japan
China *
USA
UK

(MS$)

EMPLOY

(nos.)

60

295.253

65.368

66

249.805

40.337

24

152.832

6,377

27

137.533

34,742

12

43.881

9,633

10

30.240

5,485

7.

Germany

8.

Pakistan

9.

Malaysia

10

Taiwan

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

India
Panama
Denmark
Thailand
Sweden
Italy
Belgium
Switzerland
Netherland
France
Nepal
Singapore
Canada
BR. Verginis.
Ireland
OTHERS
TOTAL

14.469

3,002

4.241

6,599

75.468

4,526

48.383

2,039

16

6.967

2,324

2.713

2,324

1.030

243

0.513

6.869

4,564

16.733

1,129

1.166

182

2.043

10

12.559

833

0.803

170

0.050

3.233

163

13.258

617

7.561

692

0.027

33

3.594

2,148

264

1132.26

2,01,169

China Including Hongkong

Table7.8 : Productivity Performance of EPZ Workers
Productivity Performance of EPZ Workers
Productivity Performance of EPZ Workers

other countries:
26.Australia
27. Srilanka
28. Mouritius
29. Indonesia
30. UAE

During 2005-2006 the export performance of EPZ workers in textile cluster stands US$ 10147.00 per
worker whereas export performance of one DTA worker in the same sector recorded US$ 4389.
Therefore , EPZ workers productivity performance is 2.3 times than the DTA workers
Sector

DTA
Empl (Nos)

EPZ
Export US$ m

Exp/Empl

Empl (Nos)

Export US$ m

Exp/Empl

US$
Textile Cluster

18,00,000

Total Export

RMG & knit Export

7901

US$

4389

Bangladesh

162766

1651.599

$10526 m

100%

EPZ

$1835 m

17.43%

Bangladesh

$7901 m

100%

$ 1652 m

20.40%

EPZ

10147

Table7.9 : PRODUCT WISE ENTERPRISES (UP TO JUNE 07)

PRODUCT WISE ENTERPRISES
(UP TO JUNE 07)
Sl

1
2
3
4
5
6
7
8
9
10.
11.
12.

Product
Garments
Textile
Terry Towel
Knit & Other Textile
Garments Accs
Caps
Tent
Elec & Electronics
Footware & Leather
Metal Product
Plastic Goods
Paper product

Unit

Investment. US$

Employ ment

(Nos.)

58

291.062

112,421

28

281.774

21,946

16

38.555

5,810

25

111.431

22,181

32

120.948

7,609

40.735

9,148

23.623

4,856

16

52.647

3,263

12

52.559

6,263

11

21.247

873

14

21.433

856

0.837

124

13.
14.
15.
16.
17.

Fishing Real & Golf

Rope
Service oriented industries
Agro product
Miscellaneous
Gr. Total

31.480

628

6.134

377

5.440

470

10

2.960

132

22

29.051

4,195

264

1132.26

2,01,169

Table 7.10: ZONE Wise Statistics (Up to June 2007)

ZONE Wise Statistics (Up to June 2007)

Industry

EPZ
Chittagong

Investment

In op. (No)

U/impl. (No)

Export

Employment (No)

(US$ in M)

(US$ in M)

135

30

541.44

7,873.07

116,984

Dhaka EPZ

91

23

508.44

5,894.86

74,386

Comilla

16

23

61.95

95.91

6,105

Mongla EPZ

12

22

3.31

23.98

260

Uttara EPZ

03

03

2.74

0.08

1,397

Ishwari EPZ

03

14

0.81

5.86

47

Adamjee EPZ

03

19

11.68

9.69

1,816

Karnaphuli
EPZ

19

1.91

174

Total

264

157

1132.26

13,903.47

2,01,169

EPZ

EPZ

Table7.11 : ANNUAL ECONOMIC BENIDFIT FROM EPZs

2003-04. 2004-05 & 2005-06
ANNUAL ECONOMIC BENDFIT FROM EPZs

2003-04. 2004-05 & 2005-06

Taka in Crore
Performance

2003-04

2004-05

2005-06

Export (Equ. BDT)

7821.73

9245.86

12848

particulars of Exp

Amount

%Exp

Amount

%Exp

Amount

%Exp

Wages

450

5.75

544

5.88

673

5.23

Rental

70

0.89

79

0.85

92

0.71

Utiliti

139

1.78

145

1.57

172

1.33

Sv. Charge

321

4.10

390

4.22

541

4.21

DTA Goods

2162

27.64

2353

25.45

3338

25.98

Admn. Exp

200

2.56

252

2.73

351

2.73

Telecom.

60

0.71

70

0.76

78

0.60

Surplus Retained by Local 110

investors

1.41

212

2.29

294

2.28

Total

44.90

4045

43.75

5539

43.07

3512

CHAPTER SIX: RECOMMENDATIONS:

For polices encouraging firms to operate in the EPZs the key factors are :
(a)

A clear foreign investment policy regime

(b)

An open door policy to attract foreign investment

(c)

Restriction-free and duty free access to imported inputs and capital goods

(d)

Rapid and low cost customs clearance for imports and exports

(e)

A Completely liberalized foreign exchange regime

(f)

Speedy response of BEPZA

(g)

Minimum regulatory control of actions and transaction within the EPZ.

(h)

speedy development of backward- linkage industries, especially for the RMG

sector.
(i)

Maintain a satisfactory law and order situation.

(j)

Reduction of lead time.

Conclusion :
EPZs in Bangladesh play a significant role in attracting foreign direct investment as well
as in involving local investment, which jointly contribute to an overall increase in the
countries volume of exports and in its earnings of foreign exchange. Foreign exchange
earned through exports by EPZ enterprises reduces deficits in the country balance of
payments. A part of it is converted into local currency to be spent on procurement of
goods and services from the local economy. BEPZAs contribution to national export was
2.69% in 1990-91 and 17.44% 2005-2006.
The two EPZs provide employment to about 2,01,169 Bangladeshi workers. As the
average family size in the country is 6 members, with only one earning member in a
family, these 2,01,169 workers earn livelihood for more than 1.2 milllion people. In most
cases, foreign investment in EPZs accompanied by utilisation of advanced technology

and provides an opportunity for the local workforce to acquire new skills. The trained
workers also help expedite transfer of technology.
Areas where EPZs have been established have become special growth centers in the
economy of Bangladesh as a result of organized and fast development of infrastructure
including roads, electricity gas, water supply, telecommunication, fire brigade, post office
etc. The private sector around the EPZ areas have come up with support investments in
shopping centers and market , transport agencies, accommodation and recreation
facilities etc, which have accelerated the pace of economic activities. In addition to
provision of services to the community associated with EPZs , the private sector has also
sets up linkage industries nearby EPZs to cater to the needs of industries within them.
Many EPZ enterprises have shifted their manufacturing processes of part of a process
outside EPZ under subcontracting.
The EPZs in Bangladesh have been instrumental in creating salutary direct benefits in
terms of flow of foreign investment, employment generation, export and foreign
exchange earnings, and value added. Limited indirect benefits in terms of technology
and skill transfer, and linkages have taken place. Most important factors affecting the
success of the EPZs in Bangladesh are : (i) the existing macroeconomic policies
affecting the EPZs (ii) a more or less realistic exchange rate and stable macroeconomic
environment, and (iii) low-cost labor.
A critical limitation of the EPZs is that they accommodate only the light industries
with no room for heavy industries, which are the main vehicles of technology and skill
transfer. EPZs are essentially an incomplete package in the overall industrialization
process underlining the importance of interfacing the EPZ policies with the DTA policies in
order to ensure synergic co-existence and growth of ether Wipes and the Data so that
they can be made mutually reinforcing in accelerating industrialization process and
maximizing national benefits.
Reference :
1. Guide book of European Investment in Bangladesh Bangladesh European
Commission, August, 2001
2

Banglasdeh Economic Review 2006.

3.

Statistical Pocket Book 2005

4.

GOB (1997), The Bangladesh Export Processing Zones Authority Act, 1980 (Act No.

XXXVI of 1980 as modified up to the 13 th December 1994), Government of the Peoples.

Republic of Bangladesh. Ministry of Law, Justice and Parliamentary- Affairs, B.B Press.
Dhaka, (PP.1-11)
5. Hossain, Belayet (2001), Globalization and Chittagong Port: Problems and Prospects,
a paper presented at a roundtable jointly organized by BIDS and Chittagong University on
27 January, Chittagong (PP.1-23).
6.

Reza, S.A. L. Export Processing Zone in Bangladesh : A Profile, Dhaka, 1990

7.

Mondal, Abdul Hye: The role of Export Processing Zones in the industrialization

process of Bangladesh: Lessons for future.

8.

Zaid, Bakht & Mondal, Abdul Hye, Debapriya Bhattacharya and Mahmood Raisul

Awal (1994), An Evaluation of the Export Processing Zones in Bangladesh, Final Report,
Bangladesh Institute of Development Studies,
[PP. 1-99..]
9.

BEPZA (1998), Information for Investors, Bangladesh Export Processing Zones

Authority, Dhaka; ( PP.87-88.)

10. Bhattacharya Debapriya (1998), Export Processing Zones in Bangladesh: Economic
Impact and Social Issues, working Paper No. 80, International Labor Offices. Geneva,
(PP.1-72)
11.

DIDS (1997), Survey of Garment Workers, Bangladesh Institute of Development

Studies, Dhaka.

Share !