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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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Board of Investment Bangladesh
© Copyright . BOI. JUL2005
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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Board of Investment Bangladesh
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CountryEconomy and
Investment Climate …
Bangladesh
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Board of Investment Bangladesh
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CountryCountry
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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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Source: Bangladesh Economic Review 2005
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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Board of Investment Bangladesh
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Source: Bangladesh Economic Review 2005
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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Board of Investment Bangladesh
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Source: Bangladesh Economic Review 2005
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$)
Bangladesh: Economy
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Board of Investment Bangladesh
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Investment as % of GDP
Bangladesh: Economy
Source: Bangladesh Economic Review 2005
24.423.623.423.123.123.022.2
5.96.7 7.4 7.2 6.4 6.2 6.1
18.517.517.216.815.815.5 15.6
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Total Investment Public Private
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Board of Investment Bangladesh
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Actual FDI Inflow (Million US$)
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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Board of Investment Bangladesh
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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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Bangladesh: Society & Economy
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
Observations on Bangladesh Economy
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Bangladesh: Society & Economy
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
Observations on Bangladesh Economy
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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.
Bangladesh: Society & Economy
The Citigroup
Observations on Bangladesh Economy
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Board of Investment Bangladesh
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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
Bangladesh: Society & Economy
UN Secretary General
Observations on Bangladesh Economy
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Board of Investment Bangladesh
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Bangladesh: Society & Economy
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
Observations on Bangladesh Economy
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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.
Bangladesh: Society & Economy
Tata Chairman Ratan N Tata
Observations on Bangladesh Economy
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Board of Investment Bangladesh
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Investment ClimateInvestment Climate
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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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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”.
Bangladesh: Investment Climate
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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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Source: The 15th Survey of Investment-Related Cost Comparison in Major Cities and Regions in AsiaJETRO, 2005
Bangladesh: Business Costs
0.06 0.
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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)
Dhaka New DelhiHong Kong Yokohama
15th Survey Findings of JETRO
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Board of Investment Bangladesh
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Source: The 15th Survey of Investment-Related Cost Comparison in Major Cities and Regions in AsiaJETRO, 2005
Bangladesh: Business Costs
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)
Dhaka New DelhiHong Kong Yokohama
15th Survey Findings of JETRO
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Board of Investment Bangladesh
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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
Bangladesh: Investment Climate
Investment Incentives
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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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Major FDI Proposals during 2005
Opportunities for Japanese Investors
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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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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JapaneseJapaneseInvestment in Investment in
BangladeshBangladesh
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Board of Investment Bangladesh
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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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Board of Investment Bangladesh
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Major Japanese Investors in Bangladesh
Japanese Investment 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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Board of Investment Bangladesh
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Major Japanese Companies/Offices in Bangladesh
Japanese Investment 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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Board of Investment Bangladesh
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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
Opportunities for Japanese Investors
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Board of Investment Bangladesh
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Potential Sectors: Services & Others
Opportunities for Japanese Investors
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