ecboi in 14jbccec tokyo-japan · 23 board of investment bangladesh ©copyright . boi. jul2005 un...

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Board of Investment Bangladesh

© Copyright . BOI. JUL2005

Investment Climate &Investment Climate &Opportunities for Opportunities for

Japanese InvestorsJapanese InvestorsTokyo, Japan • 14 July, 2005

BANGLADESH

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Presented By:

Mahmudur RahmanExecutive Chairman, Board of Investment

andAdvisor, Energy & Mineral Resources DivisionMinistry of Power, Energy & Mineral ResourcesGovernment of the People’s Republic of Bangladesh

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CountryEconomy and

Investment Climate …

Bangladesh

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CountryCountry

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Bangladesh is

• a moderate and democratic Muslim majority country

• a pluralistic society and developing economy

• aspirant to transform itself to medium income country

• culturally disciplined society

• a country of capable, hardworking & resilient citizen

• achiever in social sector and human development

• bridge between South Asia and ASEAN countries

Bangladesh: Country

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Administration & Government

• Officially known as

“People’s Republic of Bangladesh”

• Parliamentary democracy

• Decentralized local government

Bangladesh: Country

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President is

The Head of the State

HE Prof. Dr. Iajuddin Ahmed

Prime Minister is

The Head of the Government

HE Begum Khaleda Zia

Bangladesh: Country

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Bangladesh: Social Sector Achievements

q Female education & empowerment

q Micro credit for rural women

q Eradication of child labor from formal sector

q Successful Immunization Program

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Indicators South Asia BangladeshAverage

Child Immunization Rate (%) 66 83

Population without Access to Safe Water (%) 14.2 3.0

Population without Access to Sanitation (%) 65.5 52Unemployment (%) 6.8 3.3

Source: “Human Development in South Asia 2003 - The Employment Challenge.

Bangladesh : Human Development Indicators

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Indicators South Asia BangladeshAverage

Primary Enrollment (%) 99 100

Female Enrollment1st 2nd & 3rd Level (as % of Male) 79 100

Infant Mortality(per 1,000 live birth) 66 51

Under 5 Mortality Rate(per 1,000 live birth) 92 77

Maternal Mortality Ratio 505 400(per 100,000 live birth)

Source: “Human Development in South Asia 2003 - The Employment Challenge.

Bangladesh : Human Development Indicators

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EconomyEconomy

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Economic Policy

• Free-market and reform-oriented economy

• Emphasis on social development

• Poverty reduction through accelerated industrial growth and equitable distribution of wealth

• Continuous deregulation and reform

Bangladesh: Economy

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Source: Bangladesh Economic Review 2004

6.27%

5.26%

4.42%

5.27%

5.94%

4.87%5.23%

4.62%

5.39%

4.57%4.92%

4.08%

5.04%5.38%

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04 2004-05p

Consistent GDP Growth (%)

Bangladesh: Economy

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4.92%

6.17%7.44%

6.53%7.26% 7.60%

8.54%

1998-99 1999-2000 2000-01 2001-2002 2002-2003 2003-2004 2004-2005p

Upward Industrial Trend (%)

Bangladesh: Economy

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7.38

8.628.15

10.48

6.41

5.05

8.58

3.19

4.76

6.68

5.48

6.75 7.10

8.43

1991-1992

1992-1993

1993-1994

1994-1995

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005p

Manufacturing Growth (%)

Bangladesh: Economy

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5,324 5,7526,467 5,986 6,548

7,603

8,566

1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005p

Jul-April E

xportU

S$

6,961 mill

Export Growth Scenario (Million US$)

Bangladesh: Economy

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Investment as % of GDP

Bangladesh: Economy


24.423.623.423.123.123.022.2

5.96.7 7.4 7.2 6.4 6.2 6.1

18.517.517.216.815.815.5 15.6

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Total Investment Public Private

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Actual FDI Inflow (Million US$)

Bangladesh: Economy

Note 1: FDI Target was set since 2003. Note 2: Actual FDI Figures for 2005 and 2006 would be available after surveys in the following years.

Source: Provisional Results of FDI Inflow Survey by BOI and BEPZA, April 2005

400

600

800

1000

328.3441.4

652.5

2002 2003 2004 2005 2006

Target Actual

Note-1

Note-2

In Million US$

Note-2

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Excerpts from Bangladesh: Growth and Export Competitiveness

“By developing-country standards, Bangladesh’s growth for the past two decades and more has been notable. The past decade’s boom in exports – with earnings in 2003/04 (of $7.6 billion) about three times the level of 1991/92 – and the success in having the 1980’s average rate of population increase have helped raise the country’s per-capita growth ranking to twice the global median for 1991-2000. By that measure, over the past 30 years, it has overtaken Pakistan and Nepal and narrowed the gap significantly between its standing and that of India and Sri Lanka.”

Bangladesh: Society & Economy

The World Bank

Observations on Bangladesh Economy

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Period Bangladesh Median Country in World

Median Low-Income Country-LIC

India Nepal Pakistan Sri

Lanka

Bangladesh’s Rank

In World

Bangladesh’s Rank among

LICs

1973-2000 1.8 1.7 0.2 3.0 1.9 2.5 3.5 60/130 7/39

1981-2000 2.1 1.0 0.2 3.6 2.5 2.5 3.5 54/168 14/58

1991-2000 3.0 1.5 -0.1 3.6 2.6 1.4 3.9 39/182 11/62

The World Bank


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ADB: Quarterly Economic Update Bangladesh : December 2004…

“There is a clear sign of steady increase in private investment as indicated by the surge in credit, particularly to industry and agriculture sectors, increase in imports of capital goods and greater inflows of FDI. …

… The widespread interest that the country is currently experiencing in FDI is indicative of promising potential for thecountry to move on to a higher growth path. …”

Asian Development Bank


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Citibank, N.A. analysis on Bangladesh and Economy

For a country that had once been referred to as a member of the “Fourth World”, the poorest of the poor, Bangladesh’s record of development makes a remarkable story of admirable accomplishments. Despite gigantic natural and economic disasters, chronic poverty and a rapidly increasing population, Bangladesh has shown a striking ability to survive and make progress. Its per capita income rose from US$298 in FY94 to US$421 currently while its social indicators have improved across the board.”

Source: Economic and Market Analysis: Asia Pacific –Bangladesh by Global Markets Inc., January 2005.


The Citigroup


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UN Secretary General Kofi A. Annan on Bangladesh’s Progress

“…. Girls’ enrollment in second school there (Bangladesh) has more than doubled and three years the proportion of married women in the 13-to-15 bracket dropped to 14 percent from 29 percent. Families are getting smaller, and more women are employed, with higher incomes. The benefits will reach far beyond individual girls; they will include lower birth rates, better health practices, fewer children dying infancy and more productive labour force. … …

That is development. It is not abstract. It is real change in the lives of real people eager to improve their own conditions, if only can get a real chance. … …”

Source: Trade and aid in a changed world, by Kofi A. Annan. UN General in New York times Tuesday 19 March 2002


UN Secretary General


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Nobel laureate Amartya Sen lauded the success of Bangladesh

Bangladesh's achievements in these sectors (rural development, education and health) are very remarkable. "We have many things to learn from Bangladesh.

Bangladesh has made much progress in literacy campaign. Women folk have advanced much in Bangladesh. Bangladesh has also made a remarkable progress in population control. In a family once six children uses to born, now it has come down to three.

He said and called upon the Indian government to follow the Bangladesh path of population control.

Nobel Laureate Amartya Sen


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India's Business tycoon Mr. Ratan N Tata on investment climate

… …When you go there you realize that their industrial policy is more open than India’s. They do not have a history of going back on commitments. There are some places where pricing commitments have actually hurt the Bangladesh government. But they haven’t changed the law; they have honored those commitments.

Source: Businessworld, 24 January 2005.


Tata Chairman Ratan N Tata


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Investment ClimateInvestment Climate

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As a profitable investment location, Bangladesh has competitive advantages in all the following aspects:

• Strategic Location • Natural Resources

• Skilled Human Resource • Social Stability

• Democratic Governance • Huge Market Access

• Lower Cost of Business • Attractive Incentives

• Government’s Private Sector Development Focus

Bangladesh: Investment Climate

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“The 15th Survey of Investment-Related Cost Comparison in Major Cities and Regions in Asia” conducted by the Japan External Trade Organization (JETRO) in March 2005 found out that

“the investment cost in Bangladesh has become

cheaper compare to the last year and Bangladesh

succeeded to develop herself as more competitive

than other countries which are potential from the

investment point of view to foreign investors”.


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Source: The 15th Survey of Investment-Related Cost Comparison in Major Cities and Regions in AsiaJETRO, 2005

Bangladesh: Business Costs

44.5 23

5.5

504.

5

1,17

7.50

135 32

9

1,07

3.50 1,

666.

00

1,42

7.00

2,28

4.00

3,68

5.00

2,65

5.50

2,88

6.00

3,93

7.50

5,60

7.00

2,65

9.00

Worker Wage (month) Mid-level Manager (month) Mid-level Manager (month) House Rent (month)

Dhaka New DelhiHong Kong Yokohama

15th Survey Findings of JETRO

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0.06 0.

33

0.09

0.59

1.51

0.09 0.

4

0.09

0.84

1.6

0.15

1

1.52

1.54

0.09

2.15

0.42

1.14

5.22

Electricity for Business/per kWh

Water for Business use(per cu.m)

Gas for Business use(per cu.m)

Gasoline (per liter) Int'l Call Charge (3minto Japan)



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5.88

37.5

25

19.7

2

36.6

33.6

6

31.8

17.5

16

30.3

9

40

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Office Rent (sqm/month) Corporate Tax (Effective Rate) Personal Income Tax (Highest Rate)



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Basic investment incentive Scheme include:

a. 100% Foreign Ownershipb. Investment Protectionc. Tax Exemptiond. Duty Exemptione. Repatriation Facilitiesf. Unhindered Exitg. National Treatment


Investment Incentives

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Recent Major Investments

Opportunities for Japanese Investors

1. Singtel, Singapore acquired 45% stake of Citycell investing about US$ 185 million.

2. Orascom Telecom, Egypt acquired 100% stake of Sheba Telecom and invested about US$ 250 million.

3. Telenor, Norway’s reinvestment in 2004 stood at US$ 175 million.

4. Dhabi Group of UAE commenced banking operation as Bank Al-Falah with an initial investment of US$ 20 million.

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Major FDI Proposals during 2005


1. Asia Energy UK US$ 3.0 bill2. Tata Group India US$ 2.5 bill3. Hightech Group Saudi Arabia US$ 2.0 bill4. Kingdom Group Saudi Arabia US$ 1.0 bill5. Telecom Various US$ 1.0 bill6. Dhabi Group UAE US$ 1.0 bill7. Vulcan Energy USA US$ 1.6 bill8. Luxon Global Korea US$ 1.0 bill9. Textile & Various Taiwan US$ 1.0 bill

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BangladeshBangladesh--Japan Japan Trade ScenarioTrade Scenario

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Bilateral Trade since 1990

Bangladesh-Japan Trade Scenario

647

846

568

99.34118.16108.0396.13107.5897.6492.76112114.05120.899.6561.0253.3140.641.26

460

605655

685

494483

695587

498

365

286336

1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05(Jul-Apr)

Export Import

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Bilateral Trade since 1990

Bangladesh-Japan Trade Scenario

Major Export Items:

Leather goods, Frozen Food, Jute goods, Woven garments, Knitwear, Chemical products.

Major Import Items:

Dyestuff, chemical products, machinery, scientific and medical equipment, light industrial products, billet, electric meter.

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JapaneseJapaneseInvestment in Investment in

BangladeshBangladesh

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Actual FDI and Registration

Japanese Investment in Bangladesh

Actual Investment in 2004 : US$ 32.18 millionInvestment Registration : US$ 1.193 billion(since 1979)

ProjectImplementationStatus

Untraceable2%

Closed6%

Under Implementati

on1%

No Action Taken

23%In Production

68%

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Major Japanese Investors in Bangladesh


1. KAFCO 2. YKK

3. Shimizu & Co 4. Marubeni Corporation

5. Sekai Corporation 6. Toka Ink

7. Mitsui & Co 8. Kokai Corporation

9. Op-Seed Co 10. Mamiya-OP

11. JB-Q&Q 12. Nissin Corporation

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Major Japanese Companies/Offices in Bangladesh


1. Sumitomo Corporation 2. Mitsubishi Corporation

3. Itochu Corporation 4. Hocho Corporation

5. Nichimen Corporation 6. Toyo Engineering

7. Sony Corporation 8. Nishimatsu Corporation

9. Fujitsu Ltd. 10. Bank of Tokyo-Mitsubishi

11. Toyota Tsushi Corp 12. Kanematsu Corporation

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Opportunities forOpportunities forJapanese InvestorsJapanese Investors

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1.Clothing

2.Textile (MMF, Yarn Fabric)

3. Pharmaceuticals

4. Ceramics

5. Agro-processing

6. Electronics

7. Frozen Food

8. Leather Goods

Potential Sectors: Manufacturing


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Potential Sectors: Services & Others


1.Telecommunication

2.Health care

3.Education

4.Real Estate

5.Hospitality

1. Infrastructure

2. Portfolio Investment

3. Acquisition of SOEs

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Business Leaders of Japan & Bangladesh

During the Asia-Pacific growth century, Japan and Bangladesh could form strategic economic ally by

enhancing trade and investment activities.

Let us accelerate joint private sector initiatives to achieve our vision.

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Thank YouThank You

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