Jetro concerned over hassles in salary payment

Foreigners working in Bangladesh are already finding it difficult to obtain visas and work permits. And a new plan of the government aimed at full salary disbursement locally for such employees may deal a further blow to the expatriate community, said a top official of the Japan External Trade Organisation (Jetro).

In an interview recently, Yuji Ando, the country representative of the Jetro, said Japanese expats in Bangladesh usually receive salaries in two portions: one in the country and the other in Japan.

The payments disbursed in Bangladesh are for meeting expenses needed to live here while the other part is for their family expenses, the premium for health insurance and the pension, among others.

"The government of Bangladesh has requested to pay both salaries in Bangladesh. If all salaries are paid in Bangladesh, it will be difficult for the family members of expats to maintain a hassle-free life," Ando said.

This is because repatriating funds from Bangladesh requires the government's permission and takes time. Besides, premiums for insurance coverage, social security and pension schemes are debited before salaries are transferred to the accounts of the employees, he explained.

Japanese companies also raised the visa and work permit issue during a recent survey carried out by the Jetro, according to Ando.

"So, many Japanese companies hesitate to send officials to Bangladesh. Even, the nationals from other countries have also voiced the same concern."

However, Ando thinks, if foreign expatriates cannot be based in Bangladesh, knowledge transfer will not take place. However, such transfer is needed to improve the business environment in the country.

The Jetro is a government-related organisation that works to promote trade and investment between Japan and the rest of the world.

Ando said Japanese companies present in Bangladesh are also facing troubles in customs clearance and settlement of letters of credit.

Regarding the business climate, he said a business-friendly environment is a must.

According to the Export Promotion Bureau, exports from Bangladesh to Japan increased 40 percent year-on-year to $1,902 million in 2022-23, driven by duty-free access for almost all goods in the East Asian country. The shipment stood at $1,354 million in the previous year.

The higher export growth is a testament to the improving quality of goods made in Bangladesh.

On the other hand, the imports from Japan came down to $2.02 billion in FY23 from $2.8 billion in 2021-22.

Bangladesh mainly exports woven garments, knit goods and leather items to Japan whereas it imports iron and steel, ships, vehicles, nuclear reactors, machinery and mechanical appliances, among other products.

Ando said Bangladesh has huge potential to expand apparel exports to Japan, not only cotton-based, but also those manufactured using man-made fibre.

"Bangladesh can export textiles and garments to Japan, leveraging its cost advantage, while Japan can ship high-quality machinery and technology used in textile manufacturing."

He thinks agriculture and food processing are among the promising export sectors for Bangladesh.

However, since the labour cost in Bangladesh is increasing, it is going to be a concern for labour-intensive sectors.

Ando says Japanese companies can contribute to increasing productivity and efficiency by providing machinery and product management facilities and offering technical assistance.

The Jetro official believes the domestic market of 17 crore people is an attractive destination for Japanese companies. This is particularly a lucrative market for investors who want to invest in the consumer goods, automotive and electronics sectors.

On March 12, the government began talks to sign the Economic Partnership Agreement (EPA) with Japan in order to retain the duty benefit after Bangladesh's scheduled graduation to a developing nation in 2026.

And Ando thinks the trade deal may change the business environment and improve trade ties further.

"The EPA can be a game-changer for bilateral trade and investment. It will not only lead to higher trade volume. Besides, we can expect more investments from Japan in the long run."

Nearly 350 Japanese companies which are present here have collectively invested more than $380 million.

"While there are opportunities for export collaboration between Japan and Bangladesh, leveraging each country's strengths and the demand of the markets will be crucial for realising the export potential of both sides," Ando said.