JETRO works with Bangladesh government to improve business environment for bringing more foreign direct investment (FDI) from Japan, focusing how much it can create market and add value here in Bangladesh, said Yuji Ando, Country Representative of JETRO Dhaka in an exclusive interview with Bangladesh Post
He said the Japan External Trade Organisation (JETRO), Dhaka would create actual business opportunities between Bangladesh and Japan through business matching scheme.
“We believe that the more economic development is enjoyed, the more business opportunities will be expected” Ando said
He said JETRO the first window for both Japanese and Bangladesh companies and very much confident to bridge potential companies on the platform.
Yuji made these observations replying to several questions, made by Bangladesh Post, which covered the allover aspects of JETRO Dhaka and reflects how it acts in deepening economic relationships between two friendly countries. The excerpts of his interview is produced here bellow:
Bangladesh Post: At the outset, please brief us the role of JETRO in further strengthening the bi-lateral trade and investment activities between Bangladesh and Japan?
Yuji Ando: We JETRO, official trade and investment promotion agency of the Japanese government, has various functions to deepen economic relationships between two friendly countries.
The fundamental function is to facilitate trade and investment from Japan to Bangladesh through various kinds of activities, like seminar, news reports and individual supports to Japanese companies. As a first contact point for Japanese companies, we provide various kinds of supports to Japanese companies, like providing regulatory information, market information and business-matching opportunities.etc.
The second pillar is that we work with Bangladesh government to improve business environment. We always focus on how to support existing Japanese companies in Bangladesh to operate their business activities smoothly.
We always say that until and unless the existing companies are not satisfied with the business environment, why does the next company come? JETRO is having interactive discussions with Japanese companies in Bangladesh and try to address all kinds of issues by negotiating with Bangladesh Government. We also suggest the future policy for the promoting FDI from Japan.
The last point is that we would create actual business opportunities between two countries through business matching scheme. We believe that the more economic development is enjoyed, the more business opportunities will be expected.
Bangladesh Post: Now, honorable Country Representative, would you please tell us the avenues or sectors, JETRO prefers to deal with a country like Bangladesh which may also bring benefit for Japan, a country of rich economy?
Yuji Ando:We are focusing how much we can create market and add value here in Bangladesh. Japan is facing aging society and the population is decreasing. On the other hand, Bangladesh has huge population and markets. Japan can contribute to improvement of the living life for Bangladeshi people. Also, if we can produce products for Bangladesh domestic market, both quality of life and the price of the products will be improved. I think auto-mobile (two-wheelers) industry and consumer goods are one of the good examples.
In addition to the domestic market, we would like to stress the importance of export-oriented industries, like RMG, food processing and pharmaceutical, etc. Export-oriented industries are creating a lot of employment and contribute to improvement of living for Bangladesh people. For Bangladesh, Japan is one of the major export destinations for export products but graduation from LDC countries may have an impact on trade relationships. I believe FTA or PTA will help our relationship deepen more in terms of trade and investment.
Bangladesh Post: Would you tell us how many Japanese companies currently exist in Bangladesh,also tell us how many Bangladeshi companies are involved in doing business with Japan, and how are they performing?
Yuji Ando: Please see the below chart to know the number of Japanese companies and its time-series data.
We have no data of the number of Bangladesh Companies doing business with Japan but bilateral Chamber, Japan Bangladesh Chamber of Commerce and Industry (JBCCI) has member 238 companies as of April 2021. JBCCI is very active to deepen the business relationships and improve the business environment as JETRO are taking initiatives. As Japanese companies make commitment based on the long time relationship, Bangladesh companies can realize long time businesses to have win-win relationships.
Bangladesh Post: Now please brief us how to make the use of JETRO Dhaka in order to open up business relationship with Japan or to upgrade the existing business relations?
Yuji Ando: “Talk to JETRO first!” This is our motto when we talk about business promotion. When you think of business with Japan, JETRO welcomes you always.
JETRO works as a promotion agency and also secretariat of Japanese business association in Dhaka (Japan Commerce and Industry Association in Dhaka). We represent for Japanese business community in Bangladesh so that we welcome discussion with Bangladesh companies.
Bangladesh Post: In this connection, would you tell us whether you face in policy barriers in performing the designated works here in Bangladesh? If so, please make your recommendations to overcome them.
Yuji Ando: I would appreciate for the government to take initiatives to improve the business environment even amid Covid-19 pandemic but we are thinking that there are a lot of challenges in doing business and drastic improvement is needed.
The first challenge is foreign exchange policy. We are facing challenges when we do business here. Trade transaction is limited in LC settlement but terms and conditions for opening LC is quite complicated by comparing with other countries.
Businesses are requested to submit unique documents by banks which is not requested in other countries. LC should be simplified. Moreover, Telegraphic Transfer (TT) is the standard way of transaction in other ASEAN countries but in Bangladesh TT is not available for importing.
Very ironically, in South Asia, Bangladesh and Pakistan are the only countries which cannot transfer remittance. Bangladesh should not be the last country and TT remittance should be relaxed to reach the international standard for trade transaction.
Also, procurement of fund in Bangladesh is another challenge. Foreign companies face difficulties to procure fund in Bangladesh and the only way is to inject capital from the parent company. Under this situation, business expansion is hard to make. In this connection, working capital loan from parent company should be more relaxed. I would appreciate for Bangladesh Bank to take initiative to deregulate the condition for working capital loan from parent company up to 6-year companies in Bangladesh. But, we would expect more expansion of eligibility from 6 years to all foreign companies.
The second aspect is Tax policies. We do not see consistency of Tax policy and transparency of tax administration. Especially, we would expect further policies to promote domestic industries and differentiate from trading.
Say example, auto-mobile industries are making huge investment to produce domestically. They should be incentivized to make difference from trading and according to the extent of internal production. We expect the government to take proper initiative to encourage the investment here in Bangladesh.
Bangladesh Post: We know that JETRO has identified sectors like RMG, textile, dying, ceramic, IT, handicraft, energy saving and human resource development as the priority areas of cooperation. Would you tell us whether you are drawing potential response from the targeted sectors?
Yuji Ando: We are getting a lot of responses from prospective companies. Especially, we are spotlighting IT sector and human resource development as potential sectors. As the government recognizes, there are a number of IT engineers in Bangladesh and Japanese IT companies are showing huge interests in this sector. We feel that language barrier still remains but if we also believe that we have more spaces for both countries to make a matching in this sector, including human resource development. JETRO is going to cooperate with BASIS to provide business matching opportunities between two countries.
Bangladesh Post: Bangladesh Economic Zones Authority (BEZA) inked a deal last year to set up a dedicated industrial park for Japanese investors at Araihazar Narayanganj. Would you tell us whether JETRO is playing any facilitating role in this connection?
Yuji Ando: JETRO is an investment promotion agency of the Japanese government and BEZA is our counterpart to facilitate investment from Japan. We cooperate with BEZA to promote an investment and sometimes introduce individual companies directly to BEZA. Also, when we need to address any issues in Economic Zones, we work together with BEZA for further improvement of business climate. We would appreciate BEZA for continuous efforts to realize better environment.
