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Chief Representative's Speech

November 7, 2018

Let's make a prosperous future for Chittagong industries
at "International Seminar on SMEs in Asia in Chattogram"

Mr. Muhammad Nurul Islam, Honorary Consul General of Japan in Chittagong;
Mr. Mahbubul Alam, President of CCCI;
Mr. Saifuddin Ahmed, President CAAS;
Mr. Naohiro Kurose, President of ICOSA and members of JBCCI, CCCI, CAAS and ICOSA,
Japan (International Cooperation Organization for Small & Medium Enterprises in Asia)

Distinguished guests, ladies and gentlemen
Assalamu alaikum and good afternoon.

I first would like to thank the organizers, ICOSA, CCCI, CAAS and JBCCI for inviting me to this important event here today.

Please allow me to introduce myself briefly. I am Hitoshi Hirata of Chief Representative of JICA. I joined the Japanese development agency in 1989. My first business trip was to Dhaka and Chattogoram in February 1990. I remember clearly that I was impressed by the energy of Dhaka and Chattogoram. After that short visit, unfortunately I didn't have a chance to work for Bangladesh for a long time. Last August, I came back to Dhaka.

I am very excited to work for Bangladesh at this time.

Bangladesh is moving very fast to grow its economy. In the last 10 years, the economy has grown more than 6 percent. Since 2016, the growth rate has been 7%, and this year it could reach nearly 8%.
The Bangladeshi economy is one of the fastest growing in the world.
The Government of Bangladesh has set a target to become a middle income country by 2021 and a developed country by 2041.

To keep the economy growing strong in order to reach the 2041 target, there are some challenges to overcome.

The first is infrastructure.
According to the latest Global Competitiveness Report, an "inadequate supply of infrastructure" is one of the most serious impediments to foreign investment.

In the last two months, I've heard many business people say that the condition of infrastructure in Bangladesh is really bad. It is worse than Vietnam 10 years ago.
The current infrastructure investment/GDP in Bangladesh is about 2.3%. In Vietnam, it is about 5-6%. We need to invest more in infrastructure. For the investment to be growth-enhancing, it is crucial that it be strategic and well-planned.

Japan and Bangladesh have agreed to start BIG-B initiative based on the south Chattogoram area development master plan. This Bay of Bengal Industrial Growth Belt initiative aims to boost industrial development in the Dhaka- Chattogoram-Cox Bazar area. To realize this initiative, we have started to support the Mathabari port project which will create a 16-meter deep sea port. We expect a Multipurpose Terminal to open in the first half of 2023, and a Container Terminal to open at the end of 2023.

The Chattogoram area is now and will continue to be the center of industrial development in Bangladesh, and we will continue supporting strategic infrastructure investment there.

The second challenge is to diversify industry.
The Government of Bangladesh has promoted the diversification of industry. Although the ready-made garment sector still dominates the export market, there are many positive signs of development in other sectors like food processing, leather, and medicine.

I believe SMEs will play a vital role in business development.

As you know very well, the garment sector in Bangladesh grew out of the development of an SME. Mr. Noorul Quader, the founder of Desh Garments, happened to visit Daewoo's branch in Paris in 1978. Inspired by his visit, Desh sent 130 college graduates, both men and women, to Korea for training. When they returned, Mr.Quader and these 130 young founding brothers and sisters transformed the garment industry in Bangladesh.

I believe in the entrepreneurship of the Bangladeshi people and I believe the future of Bangladeshi SMEs will be a prosperous one.

Ladies and gentlemen, we can use the Desh case as a model for developing new industries from SMEs. Mr.Quader worked with Daewoo to start his manufacturing business. Collaboration with foreign partners increases possibilities. New ideas come when people are connected.

I think Bangladesh is an ideal place for connecting people and developing ideas. Dr. Faisal Ahmed, chief economist of Bangladesh Bank says that Bangladesh has a "density dividend". The high density of the population creates an environment highly conducive to networking, sharing information, learning new ideas. This environment can help SMEs be innovative and grow fast.

SMEs will also provide employment opportunities. In Japan, approximately 75% of employees work for SMEs and SMEs are the main source of employment. In Bangladesh, more than 2 million young people will join the labor market every year. It's critical to create enough job opportunities for them. SMEs can help do this.

Let me touch briefly on our support of SMEs. We cover financial support and technical support as well.

  1. Financial support
    • SMEs need money to expand their businesses.
    • That is why JICA started SME Refinancing Loan project in 2010 with Bangladesh Bank called the "Financial Sector Project for Development of SMEs (FSPDSME)" It caters to the long-term financial needs of SMEs in the Manufacturing sector.
    • By March, 2018, approximately 800 SMEs had received loans from this fund. It is expected that more SMEs will receive loans from the remaining revolving fund.
  2. Technical support
    • JICA initiated a technical cooperation project with BITAC (Bangladesh Industrial Technical Assistance Center), SME Foundation (SMEF) and Ministry of Industries (MOI) to improve the business environment for and nurture industries such as light engineering, plastic and metallic processing, with the aim of enhancing the competitiveness of SMEs in these sectors.

Ladies and gentlemen,
Before concluding my remarks, I would like to highlight a few points.
The new deep sea port in Chattogoram will improve connections with foreign countries and ensure that Chattogoram continues as the center of industrial development in Bangladesh.
SMEs will play an important role in creating new products/services and employment opportunities.
SMEs in Bangladesh have huge potential to grow by networking with foreign partners.
We would like to continue supporting SMEs in order to enable Bangladesh to attain a prosperous future.
Last but not least, I would like to thank again, ICOSA, CCCI, CAAS and JBCCI for holding this very important seminar in which we can explore many ideas and possibilities for the future of Bangladesh.

Thank you very much.

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