Kawaii Japan FDI Services

23/08/2023

𝐑𝐢𝐜𝐞 𝐞𝐱𝐩𝐨𝐫𝐭𝐬 𝐚𝐫𝐞 𝐩𝐢𝐜𝐤𝐢𝐧𝐠 𝐮𝐩 𝐢𝐧 𝐉𝐚𝐩𝐚𝐧 - 𝐓𝐡𝐚𝐧𝐤𝐬 𝐭𝐨 𝐚 𝐰𝐞𝐚𝐤 𝐲𝐞𝐧 𝐚𝐧𝐝 𝐜𝐫𝐚𝐯𝐢𝐧𝐠 𝐟𝐨𝐫 𝐉𝐚𝐩𝐚𝐧𝐞𝐬𝐞 𝐜𝐮𝐢𝐬𝐢𝐧𝐞.

A weak yen and craving for Japanese cuisine are boosting demand ... but to get rice exports on the boil, farming policies will have to change. ...

21/08/2023

𝐉𝐚𝐩𝐚𝐧 𝐭𝐨 𝐠𝐫𝐚𝐧𝐭 𝐥𝐨𝐧𝐠𝐞𝐫 𝐬𝐭𝐚𝐲𝐬 𝐟𝐨𝐫 𝐟𝐨𝐫𝐞𝐢𝐠𝐧 𝐡𝐨𝐮𝐬𝐞𝐤𝐞𝐞𝐩𝐞𝐫𝐬
Government eyes 3-year extension as demand for services grow.

Japan will allow foreign housekeepers to stay longer in the country under a program that has brought hundreds here for work as the industry faces a labor shortage.

The government plans to grant a roughly three-year extension for those who entered the country under the program before COVID-19 travel restrictions took effect in 2020 and who meet certain conditions. The program now has a limit of five years.

The program began in 2017 and about 450 housekeepers had been accepted as of the end of March to work in areas designated as special economic zones. Before the program, foreign housekeepers were allowed to work in Japan only in a few circumstances, such as for diplomats.

Most of the housekeepers are from the Philippines, which has a bilateral agreement with Japan. They have special certifications, a year's worth of experience, and speak a certain level of Japanese. Their job includes cooking, cleaning, and doing the laundry.

The Cabinet Office, Justice Ministry, and other agencies will also make changes as early as this fiscal year to allow condominium management companies and others to act as intermediaries for housekeeping services. Under current guidelines, interested customers must enter into a direct contract with companies providing the services.

The change will make it easier for service providers to find multiple customers in the same building or area, which in turn would allow them to schedule services more efficiently.

Special zones where foreign housekeepers can work have been designated in Tokyo, Kanagawa, Osaka, Hyogo, and Aichi prefectures, as well as in the city of Chiba. About 5,400 households received services under the program in fiscal 2022 -- a ninefold increase from fiscal 2017.

Japan's market for housekeeping services is expected to grow to 200 billion yen ($1.4 billion) in 2025 from 69.8 billion yen in 2017, according to a study by Nomura Research Institute commissioned by Japan's Ministry of Economy, Trade and Industry.

Demand is expected to grow in particular among two-income families living in urban areas. Some companies are also offering services by Philippine housekeepers who can also double as English tutors.

Housekeeping services could help promote women's participation in the labor force by easing the burden of household tasks, some proponents say. In a survey conducted by the Cabinet Office from November to January, 74.1% of respondents said they would be interested in using such services to help with housework -- up 40.6 percentage points from the previous survey in 2019.

Bears, a leading housekeeping service provider, said the majority of households it works with have two working parents in their 30s to 50s. Many have an annual household income of 8 million yen to 10 million yen, or $56,000 to $70,000. The majority of urban customers live in apartment blocks.

The short-staffed industry has struggled to keep up with surging demand. About 2,500 housekeepers work for Bears a month, with 240 from the Philippines.

Source: Nikkei Asia

11/08/2023

𝐉𝐚𝐩𝐚𝐧-𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡 𝐅𝐃𝐈 𝐈𝐧𝐢𝐭𝐢𝐚𝐭𝐢𝐯𝐞𝐬 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧 𝐁𝐢𝐥𝐚𝐭𝐞𝐫𝐚𝐥 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐓𝐢𝐞𝐬

𝑰𝒏𝒕𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏

Foreign Direct Investment (FDI) has been a crucial driving force behind economic growth worldwide, fostering partnerships and facilitating cross-border collaborations. In recent years, the relationship between Japan and Bangladesh has witnessed significant developments in terms of FDI, thereby bolstering economic ties between the two nations. This article delves into the latest FDI news concerning Japan and Bangladesh, highlighting the key sectors attracting investments and the potential impact on the economies of both nations.

𝗦𝗲𝗰𝘁𝗼𝗿-𝗦𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝗙𝗗𝗜 𝗜𝗻𝗶𝘁𝗶𝗮𝘁𝗶𝘃𝗲𝘀

1. Manufacturing and Infrastructure:
Japan has long been keen on investing in Bangladesh's manufacturing sector. In line with this objective, Japanese companies have been actively venturing into industries such as textiles and garments, electronics, automotive, and shipbuilding. The steady flow of FDI from Japan has helped Bangladesh achieve remarkable growth in apparel exports, strengthening its position as a leading global textiles and garment manufacturer.

Additionally, Japan has extended support to Bangladesh's infrastructure development projects, primarily in the energy and transportation sectors. Notable initiatives include the Matarbari ultra-supercritical coal-fired power plant and the construction of the MRT Line 6, which aims to create a modern and efficient transportation system within Dhaka.

2. Special Economic Zones (SEZs):
Bangladesh's establishment of multiple SEZs has attracted significant interest from Japanese investors. The Japanese government has been committed to promoting investment in these zones, creating mutually beneficial opportunities for both nations. Notably, Japan Economic Zone (JEZ) is a prominent example of this cooperation, where Japanese companies can access various incentives such as tax exemptions and simplified administrative procedures, incentivizing further FDI inflows.

3. IT and Telecommunications:
To further strengthen Bangladesh's digital infrastructure, Japan has shown a keen interest in investing in the country's IT and telecommunications sectors. These investments focus on expanding high-speed internet connectivity, enhancing e-governance initiatives, and promoting digital transformation across industries. Such collaborations aim to foster innovation and create additional employment opportunities within the digital economy.

𝘽𝙚𝙣𝙚𝙛𝙞𝙩𝙨 𝙖𝙣𝙙 𝙋𝙤𝙩𝙚𝙣𝙩𝙞𝙖𝙡 𝙄𝙢𝙥𝙖𝙘𝙩

The deepening economic ties between Japan and Bangladesh through FDI bring numerous benefits to both countries.

1. Enhanced Economic Growth:
The inflow of Japanese investments plays a pivotal role in promoting sustainable economic growth in Bangladesh. FDI contributes to job creation, technological advancements, and skill development, boosting industrial productivity and export potential, ultimately resulting in higher GDP growth.

2. Knowledge and Technology Transfer:
Japanese companies often bring advanced technological know-how, efficient management practices, and quality control standards to various sectors in Bangladesh. These transfers improve local skillsets and enhance production capabilities, allowing Bangladeshi industries to become more competitive on a global scale.

3. Strengthening Trade Relations:
The FDI initiatives cement the bilateral trade relations between Japan and Bangladesh. As investments increase, so does the demand for raw materials, finished goods, and services, leading to a mutually beneficial trade network that supports diverse sectors and strengthens the overall economic ties between both nations.

𝑪𝒐𝒏𝒄𝒍𝒖𝒔𝒊𝒐𝒏

The strengthening foreign investment ties between Japan and Bangladesh propel economic growth, foster innovation, and promote sustainable development. The inflow of FDI from Japan across industries such as manufacturing, infrastructure, SEZs, and IT & telecommunications brings forth numerous benefits for both countries. As Japan and Bangladesh continue to forge ahead with their collaborative initiatives, these FDI endeavors pave the way for a prosperous and mutually beneficial economic future.

𝑾𝒓𝒊𝒕𝒕𝒆𝒏 𝒃𝒚 -
Nafiul HK Alamgir
International Business Development In-Charge
Kawaii Japan FDI Services

10/08/2023

𝐉𝐚𝐩𝐚𝐧 𝐦𝐢𝐧𝐢𝐦𝐮𝐦 𝐰𝐚𝐠𝐞 𝐭𝐚𝐫𝐠𝐞𝐭 𝐞𝐱𝐜𝐞𝐞𝐝𝐬 𝟏,𝟎𝟎𝟎 𝐲𝐞𝐧 𝐟𝐨𝐫 𝐟𝐢𝐫𝐬𝐭 𝐭𝐢𝐦𝐞

Labor ministry panel pushes for aggressive increase in response to inflation

TOKYO -- Japan's minimum wage is on track for a record jump after a labor ministry advisory panel agreed on Friday to target an average of 1,002 yen ($7.11) per hour for this fiscal year.

The plan amounts to a 41-yen increase from the current 961 yen, and would bring the national average to above 1,000 yen for the first time. The government hopes higher pay will spur consumption and, in turn, economic growth.

By percentage, the plan amounts to an increase of 4.3% -- the largest since fiscal 1991.

The change is expected to drive up wages particularly in the service industry, which has faced a persistent labor shortage. Pressure could grow on businesses in the sector to bolster profitability.

Japan's prefectures each set their own minimum wage. They are expected to adopt new rates around October in line with the panel's target.

"I welcome the shift," Japanese Prime Minister Fumio Kishida told reporters Friday. "We will pursue policies to help businesses boost productivity and pass on labor costs, so that higher wages extend to smaller businesses."

Tokyo, neighboring Kanagawa, and Osaka prefectures had already topped the 1,000-yen mark by fiscal 2022. Another five, including Aichi, which is home to Nagoya, and Kyoto, are now expected to join the club.

The change would also mean that over 25 million people, or 50% of eligible workers in Japan, would be earning 1,000 yen an hour or more.

The aggressive push for higher pay comes as inflation continues to squeeze households.

Japan's core consumer price index, which excludes fresh food prices, has been growing by 3% or more on the year since September, and gained 3.3% last month. Meanwhile, real wages shrank for the 14th straight month in May, by 0.9% on the year.

Labor unions in Japan secured the largest average pay raise in 30 years of 3.58% during wage negotiations this spring. The labor ministry panel decided on an even larger increase, hoping to extend the fruits of the negotiations to those who work for nonunion companies.

The government has been aiming for an average nationwide minimum wage of 1,000 yen since the mid-2010s. But many smaller companies have lacked the resources to offer higher pay, and government support in boosting profitability and passing on labor costs is essential.

Other countries have implemented even more dramatic wage hikes in response to inflation. Romania raised its minimum wage by 17.6% in January, and Australia by 8.7% in July. Turkey, where inflation has topped 15%, has raised the minimum wage by 34%.

Source: Nikkei Asia

09/08/2023

𝐉𝐚𝐩𝐚𝐧'𝐬 𝐛𝐚𝐬𝐞 𝐬𝐚𝐥𝐚𝐫𝐲 𝐠𝐫𝐨𝐰𝐭𝐡 𝐡𝐢𝐭 𝟐𝟖-𝐲𝐞𝐚𝐫 𝐡𝐢𝐠𝐡 𝐢𝐧 𝐌𝐚𝐲

Wage hikes induced by labor talks this spring start to take effect

TOKYO (Reuters) -- Japan's nominal base salary grew at the fastest pace in 28 years in May, government data showed on Friday, adding fuel to the debate over when the central bank will unwind its ultra-loose monetary stimulus.

Global financial markets have been closely watching Japan's wage data, as Bank of Japan Governor Kazuo Ueda regards pay growth as a key gauge to consider in deliberations about a shift in policy.

Regular wages rose 1.8% in May from a year before, labor ministry data showed, the biggest gain since February 1995. The strong base pay growth boosted workers' total cash earnings, or nominal wages, by 2.5% in May, after a revised 0.8% increase logged in April.

Japan's largest labor organization Rengo said on Wednesday that major companies had agreed to average pay hikes of 3.58% this year, the highest since 3.9% in 1993, according to its final survey result.

The result of the spring labor talks, known as "shunto", will be increasingly seen in government wage statistics over the next few months, a labor ministry official said.

Still, real wages contracted 1.2% in May, the 14th consecutive month of year-on-year declines, as relentless consumer inflation outstrips nominal pay growth and squeezes households' buying power.

Separate data on Friday showed Japanese household spending fell 4.0% in May from a year earlier, down for a third month and more than the median market forecast for a 2.4% decline.

On a seasonally adjusted month-on-month basis, household spending was down 1.1%, versus an estimated 0.5% gain to mark a fourth month of decline.

Source: Nikkei Asia

08/08/2023

𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡 𝐟𝐨𝐜𝐮𝐬𝐞𝐬 𝐨𝐧 𝐥𝐨𝐰𝐞𝐫 𝐝𝐮𝐭𝐲, 𝐡𝐢𝐠𝐡𝐞𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭

Bangladesh focused on areas of duty-reduction and increasing investment from Japan during recent discussions on the potential signing of an Economic Partnership Agreement (EPA) between the two countries, according to an official of the commerce ministry.

During the discussions held at a city hotel in Dhaka last week, Japan said it would protect its domestic agriculture industry from implications of the potential EPA as the country is self-sufficient in this regard.

This means Bangladesh may not enjoy any duty benefits on agricultural exports to Japan even if an EPA is signed between the two countries, Senior Commerce Secretary Tapan Kanti Ghosh said yesterday.

"But Japan can protect any of its local industries should it feel the need to," he said, adding that Bangladesh has the same option.

Bangladesh's main target for the EPA is to enjoy zero-duty benefits on shipments of garment items, leather and leather goods, electronics, and other products, Ghosh told The Daily Star over the phone.

This is because Bangladesh's export basket has fewer products compared to the diversified portfolio of Japan, he said.

Ghosh informed that Bangladesh also wants the removal of the average 18 percent duty levied on all shipments to Japan.

"Besides, the country seeks more investment from Japan as the recent trend of Japanese companies coming to Bangladesh suggests they have a promising future here," he added.

During his visit to Dhaka last week, Yasutoshi Nishimura, the minister of economy, trade, and industry of Japan, said Bangladesh has the potential for attracting the relocating Japanese factories as entrepreneurs from the island nation are diversifying their locations in Southeast Asia and ASEAN regions.

"I expect more companies will come to Bangladesh," Nishimura said while speaking at a summit on "Bangladesh-Japan Economic Relations for the Next 50 Years" in Dhaka last week.

The relationship between Japan and Bangladesh had turned from a comprehensive one into a strategic partnership through a summit in April earlier this year.

However, there remain areas for improving the business climate and thereby attracting more trade and investment, he added.

Regarding Bangladesh's industrial upgradation, the Japanese minister said Japan's government is already supporting the construction of different infrastructure projects through the Japan International Cooperation Agency (JICA).

For instance, the Matarbari power plant and deep seaport are being established with Japanese financing.

Besides, the JICA signed a memorandum of understanding in April this year for the capacity building of agencies promoting investment in Bangladesh.

Also, the Bangladesh Special Economic Zone (BSEZ), which is known as the Japan economic zone, has been under construction at Araihazar in Narayangnaj since last December while the metro rail project in Dhaka is ongoing as well.

The Japanese minister also said factory relocation has already started as the Japanese company Honda opened a factory in Bangladesh.

Similarly, BJIT, an award-winning global IT company, has also started operations in Bangladesh.

Currently, nearly 350 Japanese companies are operating in Bangladesh, with more than $380 million invested in the country.

Of the total companies, 85 percent want Bangladesh and Japan to sign the EPA for increasing bilateral trade and investment.

In 2022, Bangladesh received a record high of more than $100 million as an investment from Japan.

Meanwhile, the number of Japanese companies in Bangladesh roughly quadrupled over the past decade, Nishimura added.

Japan and India are two export destinations in Asia, where Bangladesh's export earnings reached $2 billion, Munshi said while addressing local and Japanese businessmen at the summit.

High-powered Bangladesh and Japan delegations completed the second round of discussions on the joint study for signing the EPA in Dhaka last week.

A senior official of the Japanese government who attended the discussion said his government would not allow agricultural products under the duty-free benefit even if the EPA is signed.

Ghosh said formal negotiations for the EPA will start this year as the third and final discussion on the joint study on its feasibility will be held soon.

Source: The Daily Star

07/08/2023

Investing in Japan has never been easier. 🙌

The Japanese Government offers various incentives and incentive programs to facilitate investment in Japan. To help you stay up to date on all the information, JETRO has put together a guide that summarizes the key information in one convenient place.

Learn about the available incentives and how to access them.

https://www.jetro.go.jp/en/invest/support_programs/incentive/

Source: JETRO

06/08/2023

𝐉𝐚𝐩𝐚𝐧-𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐃𝐢𝐫𝐞𝐜𝐭 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭: 𝐀 𝐆𝐫𝐨𝐰𝐢𝐧𝐠 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐑𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩

Tokyo, Japan – In an increasingly globalized world, Foreign Direct Investment (FDI) has emerged as a key driver of economic growth and development. The current FDI scenario between Japan and Bangladesh is a testament to this fact, with both countries witnessing a significant surge in bilateral investments in the last few years.

For several decades, Japan has been one of the world's leading investors, with its corporations establishing a strong presence in various global markets. In recent years, Bangladesh has emerged as an increasingly attractive destination for Japanese FDI. This growth has been influenced by several factors, including Bangladesh's strategic location, favorable demographic trends, competitive labor costs, and robust economic growth.

Bangladesh, a country with a population of over 160 million and a rapidly growing middle class, offers vast potential for Japanese companies. The country's sustained economic growth, averaging at 6% annually in the last decade, has created an appealing market for Japanese goods and services.

Recently, the Japan External Trade Organization (JETRO) reported an increase in Japanese FDI into Bangladesh. According to the report, the total cumulative Japanese FDI in Bangladesh reached an all-time high in 2023, reflecting the growing confidence of Japanese investors in the Bangladeshi economy.

The sectors attracting the highest Japanese FDI in Bangladesh include the automobile industry, electronics, textiles, and infrastructure. A notable development has been the establishment of the Japan Economic Zone in the Narayanganj district of Bangladesh. This dedicated economic zone, developed for Japanese companies, signifies a long-term commitment from Japanese investors and is expected to spur significant economic activity in the coming years.

On the other hand, Bangladesh's investments in Japan have also seen a notable increase. Although the Bangladeshi FDI in Japan is relatively small compared to the Japanese FDI in Bangladesh, it signifies the strengthening economic ties between the two countries. Key sectors of Bangladeshi investment in Japan include the garment industry, information technology, and seafood exports.

The governments of both countries have also played a significant role in promoting bilateral investments. The Japan-Bangladesh Comprehensive Partnership, established in 2014, has facilitated numerous high-level exchanges and dialogues that have led to important agreements on trade, investment, and technical cooperation.

While the current FDI landscape between Japan and Bangladesh is promising, challenges do exist. These include bureaucratic hurdles, infrastructural limitations, and issues related to governance and transparency in Bangladesh. Despite these challenges, the direction of the relationship is positive, and with sustained efforts, the full potential of the Japan-Bangladesh investment relationship can be realized.

In conclusion, the surge in FDI between Japan and Bangladesh reflects a growing economic relationship between the two countries. This growth in bilateral investments is a testament to the strategic importance of both nations in each other's economic outlook. As Japan continues to seek markets that can offer a demographic dividend and Bangladesh continues to attract investments that can drive its economic growth, the Japan-Bangladesh FDI relationship is expected to deepen and evolve. As the world navigates the complexities of the post-pandemic economy, this relationship could serve as a model of mutually beneficial economic cooperation.

Author: Nafiul Hakim Khan

05/08/2023

𝐉𝐚𝐩𝐚𝐧 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐞𝐝 𝐢𝐧 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐢𝐧𝐠 𝐢𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭

The Japan International Cooperation Agency (JICA) has expressed its interest in providing more loans for infrastructure development in Bangladesh.

The governmental agency of the world's third-largest economy has also asked the authorities in Dhaka to prepare a plan in this regard and send it to the development partner, Planning Minister MA Mannan told reporters after a meeting with visiting JICA Executive Senior Vice President Yamada Junichi on Thursday.

"JICA wants to invest in Bangladesh, with priority given to infrastructure projects. Besides, it is keen to provide loans for human resource development, especially health education and rural infrastructure," said the minister.

"They have assets and are willing to provide them, but the approval process delays the loans. Because of this, JICA is not satisfied with the slow progress of projects," he added.

According to sources at the Economic Resources Division (ERD), Bangladesh has signed loan agreements with Japan totaling more than $25 billion since the independence of the South Asian nation in 1971.

The planning minister said JICA is sometimes inconvenienced by the time taken in the project process here in Bangladesh, but similar work is quickly done in their country.

"We cannot do it the same way as them. We have explained to them that we have rules and regulations that must be obeyed, and we have to be accountable in the parliament. Despite these challenges, we will try to expedite the progress of the projects," he added.

Responding to questions from journalists, JICA's executive senior vice president said Bangladesh has always been considered one of the most important countries for the development agency.

Yamada Junichi said he has visited a few projects, especially the Mass Rapid Transit (MRT) in Dhaka, the Special Economic Zone in Araihazar, the Matarbari Power Plant, and the deep seaport projects. He has expressed satisfaction with these projects.

He said infrastructure development is very important in this country, and JICA wants to further support Bangladesh in this area.

Regarding the increase in interest rates by JICA, this official said that it has been done to comply with the decision of the Japanese government.

He said he believes the interest rate has been increased, taking into account the international market. JICA has increased interest not only for Bangladesh but for all countries, and the rates have been fixed in accordance with international standards.

The new proposal by the JICA suggests an interest rate of 1.6%, marking a 40 basis point hike from the previous raise implemented in March. This translates to a total increase of 90 basis points in JICA loan interest rates over the past year, starting from the 0.70% rate at the beginning of the last Japanese fiscal year (April 2022 to March 2023).

Later at a meeting, Prime Minister Sheikh Hasina requested Yamada Junichi to explore the opportunity of producing drinking water from the wastewater that comes from seawater following salt production by the local people at the project area in Cox's Bazar.

The JICA official appreciated the proposal, saying, "It is possible", reports BSS.

Executive Senior Vice-President of the Japan International Cooperation Agency (JICA) Yamada Junichi yesterday paid a courtesy call to Prime Minister Sheikh Hasina at her Jatiya Sangsad Bhaban office yesterday evening.

The prime minister said there will be huge amounts of salt in the wastewater and the local people will be benefited from it as they can produce much salt using less water, the PM's Speechwriter M Nazrul Islam told newsmen after the meeting.

The premier also asked the authorities concerned to form an authority to deal with the Maheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI) in line with a joint communique, signed between Bangladesh and Japan on 26 April during her last official visit to Japan.

In reply, the JICA expressed its desire to work with the MIDI upon completion of the Matarbari Power Plant project.

She also asked the authorities concerned to introduce a one-stop service in the Araihazar Economic Zone area to stop the hassle of the investors to fetch more foreign and local investments.

Yamada Junichi apprised the prime minister that he had visited the Matarbari Power Plant, Deep Sea Port, Third Terminal of Hazrat Shahjalal International Airport in Dhaka, and Economic Zone at Araihazar in Narayanganj projects areas.

Junichi appreciated the progress of the mega projects and hoped the Matarbari Power Plant will be inaugurated early next year as 95% work of the plant has been completed.

Source: The Business Standard

31/07/2023

𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡, 𝐉𝐚𝐩𝐚𝐧 𝐭𝐨 𝐬𝐢𝐠𝐧 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭 𝐬𝐨𝐨𝐧

Tipu Munshi says after meeting with his Japanese minister:
Bangladesh and Japan have agreed to sign the economic partnership agreement (EPA) soon to deepen and expand bilateral trade and investment between the two nations, the commerce ministry said today.

To take the matter forward, the second round of talks will begin on July 25 in Dhaka and end on July 26, according to the ministry.

"We are working on EPA to take the bilateral relations to new heights. The problems faced by Japanese investors will be solved in the light of the EPA. This will accelerate foreign investments and industrial production," said Commerce Minister Tipu Munshi.

He shared the information after a meeting with visiting Economy, Trade, and Industry Minister of Japan Yasutoshi Nishimura.

They met after the daylong summit on "Bangladesh-Japan economic relations for the next 50 years: for the industry upgradation of Bangladesh".

The Japan External Trade Organisation (Jetro), Bangladesh Investment Development Authority (Bida), and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) jointly organized the summit, which took place at Pan Pacific Sonargaon in Dhaka this afternoon.

In April this year, Dhaka and Tokyo signed a memorandum of understanding on the proposed EPA during the visit of Prime Minister Sheikh Hasina to Japan.

Both countries aim to sign the EPA by the end of 2025 or early 2026 when Bangladesh is expected to graduate to become a developing country.

Bangladesh is showing interest to sign trade agreements with its major partners in order to retain duty-free export benefits after graduating from the group of the least-developed countries (LDCs) in 2026.

Munshi said they discussed the continuation of zero-duty entry of Bangladeshi products to Japan in the post-LDC era.

At the meeting, Japan also expressed interest to invest in mega projects of Bangladesh, said Munshi.

He said Japan is already investing in mega projects here and showed interest to invest more.

At the meeting, they also stressed the need for exploring potential areas of bilateral investment.

Source: The Daily Star

30/07/2023

𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡 𝐭𝐨 𝐛𝐞𝐧𝐞𝐟𝐢𝐭 𝐟𝐫𝐨𝐦 ‘𝐂𝐡𝐢𝐧𝐚 𝐏𝐥𝐮𝐬 𝐎𝐧𝐞’ 𝐩𝐨𝐥𝐢𝐜𝐲

Kazushige Nobutani, president of the Japan External Trade Organisation (JETRO), is scheduled to come to Bangladesh today along with Yasutoshi Nishimura, minister for Japan's economy, trade, and industry. Their visit aims to discuss the Economic Partnership Agreement (EPA) the two countries plan to ink to promote trade and investments.

In an email interview with The Daily Star, Nobutani spoke about investment opportunities in Bangladesh for Japanese firms and challenges the face, among other issues.

DS: A lot of Japanese companies located in China also want to relocate to other countries, including Bangladesh. Do you think that Bangladesh has the opportunity to attract some of them?

Nobutani: Japanese companies are trying to diversify the supply chain not only from China but to other regions, especially the Association of South East Asian Nations. I believe Bangladesh is one of them.

DS: How do you see the business potential for Japanese investors in Bangladesh?

Nobutani: There are a lot of business opportunities for Japanese companies in Bangladesh.

First, we see a lot of export-oriented industries utilizing abundant human resources in Bangladesh.

Since the 1980s, some Japanese companies, especially those based in the Chittagong Export Processing Zone, set up export-oriented industries and they are still doing very good business in Bangladesh.

Second, based on JICA's support, mega infrastructure development projects are going on in Bangladesh. Since Bangladesh is one of the fast-growing economies in the world, Japanese companies are showing great interest in developing infrastructures in the country.

Third, there is a huge domestic market in Bangladesh. JETRO Dhaka is getting a lot of queries from Japanese companies to market their products in Bangladesh. We see more opportunities in domestic market-oriented businesses. Lastly, the ICT and startup sectors are more focused areas in Bangladesh for Japanese companies.

DS: Do you think Bangladesh could create an investment-friendly environment?

Nobutani: I appreciate Bangladesh's government for working very hard to improve the business environment.

Our focused activity is to work with the government to create a more business-friendly environment in Bangladesh. We normally get a variety of opinions from Japanese investors regarding the business environment in Bangladesh and raise these issues with related ministries and agencies. Bangladesh is sincerely working to address the issues.

We believe that the success of existing Japanese companies will bring more FDI from Japan. That's why we are working very hard to support the existing Japanese companies.

DS: What initiatives should Bangladesh take to attract Japanese investments?

Nobutani: Japanese companies always compare business environments and incentives when they decide on investment. To attract Japanese investments, Bangladesh should have better business environment and incentives than other countries.

Japanese companies have long experience in Asian countries, and we are ready to support Bangladesh to have a better business environment based on our experiences.

DS: What types of opportunities are available in Bangladesh for investments?

Nobutani: Japan is facing an aging society and the population is going down. It's high time for Japan to work together with Bangladesh to get the source of economic growth for both countries.

Bangladesh is a time-tested friend of Japan and we believe that we can work together for win-win relations in business.

DS: How can JETRO help Bangladesh attract Japanese investments?

Nobutani: JETRO works together with Bangladesh to provide investment opportunities for Japanese companies. We don't have any shortcuts to promote Japanese investment. I believe the shortest way is to address the issue one by one to facilitate more business from Japan.

DS: What will the potential sectors for Japanese investors in Bangladesh be in the coming days?

Nobutani: Startup is a potential sector for investments for Japanese investors. Startups are growing industries in Bangladesh, and we believe Japanese companies can collaborate with them to deliver services.

Energy is a sector that is vital for realizing a carbon-neutral Bangladesh. So, it is important for Bangladesh to introduce environmental-friendly energy.

DS: Do you think Japanese investors face any obstacles to investment in Bangladesh?

Nobutani: There are several obstacles to investment in Bangladesh. We see bureaucratic challenges in custom procedures and tax administrations.

We want more transparency and predictability in administrative procedures. I believe that digitalization and one-stop service would be good methods for having a better environment.

Amid the Ukraine war, the world is facing difficulties due to the energy and essentials price hike. Bangladesh is not an exception.

As Bangladesh needs to import raw materials, foreign exchange regulations are crucial for Japanese companies to operate businesses. Once the difficulties are over, I'd like to expect Bangladesh's government to take initiatives for better regulations in the foreign exchange policy.

Japanese companies would like to contribute to industrial diversification in Bangladesh. However, industrial diversification takes a long time for getting investment and technical transfer from outside.

In order to do that, a long time and consistency in the policies are crucial. We would like to emphasize that Bangladesh learns from Japanese companies to develop industries.

DS: How can Bangladesh increase exports to Japan?

Nobutani: Bangladesh should increase the portfolio of export goods, especially value-added goods in the RMG sector. Japan and Bangladesh governments have set up a joint study group for bilateral EPA in December.

EPA is more comprehensive than the free trade agreement (FTA). According to our survey, 85 percent of Japanese companies in Bangladesh are wishing to have a bilateral FTA or EPA before Bangladesh graduates from the LDC group in 2026.

We also came to know that without FTA or EPA, 20 percent of existing Japanese companies in Bangladesh would consider relocation or reduce procurement from Bangladesh in the future. I believe EPA would not only avoid relocation but also help Bangladesh to increase exports to Japan.

DS: Japanese Prime Minister Fumio Kishida, during his visit to India in April, touted the idea of a new industrial hub for the Bay of Bengal and northeast India. How will it be materialized?

Nobutani: The Japanese government would like to work with Bangladesh to realize a "Free and Open Indo-Pacific". In the prime minister's speech, Bangladesh was cited as the hub of the region.

Japan is supporting to develop Matarbari deep seaport. The seaport will be the gateway to approach the northeastern region of India. At the end of the day, Matarbari could be the hub for exporting to other regions. Matarbari would be a game-changer in this region.

Source: The Daily Star