Economic and Social Impacts of Export Processing Zones on the Economy of Bangladesh

According to existing legislation of Bangladesh, the primary goals of export processing zones (EPZs) are to: (i) provide foreign exchange earnings by promoting non-traditional exports; (ii) provide jobs to alleviate unemployment and underemployment and assist in income creation; and (iii) attract foreign direct investment (FDI) and engender technological transfer, knowledge spillover and demonstration effects that would act as catalysts for domestic entrepreneurs to engage in production of non-traditional products. The present study seeks to calibrate achievements of the EPZs to these goals with two-fold immediate objectives to: (i) make a comprehensive assessment of the direct and indirect impacts of the EPZs on the national economy of Bangladesh; and (ii) examine whether there is any policy space for further expansion and replication of EPZs in the new areas of the country.

The study is based on both secondary and primary data. BEPZA provided all the secondary data and information. Primary data were generated through an in-depth field survey of 117 enterprises in all the 8 EPZs, organizations and parties involved in the backward and forward linkage industries, local and foreign enterprises in and outside EPZs, support services to and from EPZs and other stakeholders.

Study Team: Mohammad Yunus and Abdul Hye Mondal