Export Processing Zones in Bangladesh
By Luke Juran, University of Iowa

 

Export processing zones (EPZs) are demarcated zones in port cities, manufacturing cities, and primate cities that carry special privileges for multinational companies (MNCs). Foreign companies locate factories in these zones to attain lower tax rates, evade import taxes, and-- realistically- to exercise lower environmental regulations and avail access to cheaper labor and inputs. The host country sees EPZs as a way to attract foreign investment, provide jobs for their struggling economy, and to become a player in the global economy. Foreign companies manufacture and/or assemble parts in EPZs that are destined for export. EPZs are similar to maquilladoras and are comparable to American owned companies who locate their manufacturing facilities along the Mexico border.

EPZs in Bangladesh are mainly located in the capital city of Dhaka and the port and business city of Chittagong. Bangladeshi EPZs mainly produce electronics, garments, optical lenses, and intraocular lenses. The foreign companies chiefly come from Japan, South Korea, and European countries such as Germany, Italy, and the Netherlands. EPZs represent one way for Bangladesh to participate in the global economy. Bangladesh is not rich in natural resources (although it is endowed with considerable natural gas deposits) and does not export many commodities or goods. Therefore, for the time being EPZs represent one method of offering jobs to their citizens, attracting foreign investment, and stimulating the Bangladeshi economy.