Bangladesh Industry Promotion Process: Since independence in 1971, the Bangladesh government has
implemented a series of new measures for the reform of special economic
zones (SEZ), including the nationalization of major industries, the
modification of legal systems and the administrative deregulation, and the
attraction of foreign direct investment to increase export, and allowing
natives to do individual business in the SEZ. Nevertheless, the weak governance
structure such as insufficient infrastructure and chronic bureaucracy as well
as labor unrest has restricted domestic and foreign investors.
In 1982, the government
policy focused on export promotion by offering various incentives such as
export subsidies and tax exemption. However, the invested capitals by these
incentives were emphasized on few advanced technologies. As a result, it
restricted price rather than export in conjunction with the global market.
At this time, the Foreign Individual Investment (Promotion and Protection) Law in 1980 and the Industrial Policy in 1982 needed structural reforms such as the state-level development of infrastructure. For this, the economic cost and the structural reform time were required.
In 1986, the government announced the revised industrial policy to liberalize trade and investment. It introduced the new scope of export incentives to simplify and rationalize the tariff structure. As a result, import was liberalized.
The reform of regulations and trade polices has improved the general economy, while the economic environment has not been easily improved due to structural bottleneck phenomenon.
The short-term trade policy emphasized the continuous need of export freedom. Thereby, rules and procedures have been simplified and incentives have been more expanded.
Manufacturing Trend: Due to a change of growth paradigm and the rise of service economy, the share of manufacturing is gradually decreasing. However, in the 2008 financial crisis, U.S., EU and other developed countries have actively tried to refocus on the importance of manufacturing that is the waist of all industries. Many countries take a higher interest in creating the manufacturing competitiveness under the slogan of global economy of job creation and sustainable growth. Therefore, the manufacturing competitiveness is said to have important implications that can determine the future of the national economy.
As the economy develops, the land area per enterprise and average employment in the manufacturing industry decrease, the proportion of small-sized businesses increasingly increases, while the proportion of medium and large-sized businesses decreases.
In terms of business types, the industry of electricity, electronics, and machinery rather than the industry of steel, non-metallic, transportation equipment and petro-chemistry tend to increase and the average company size becomes smaller.
On the other hand, the industry of electricity, electronics, and transportation equipment with capital and technology-intensive characteristics is recording a relatively high growth, including the increasing proportion of the number of enrolled plants and their areas.
As the competitiveness of low-tech industries and domestic market is gradually lost, the withdrawal of small companies that require labor-intensive and simple technologies is accelerating.
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