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How we took this approach to popularize SEZs in Bangladesh, against a backdrop of regional resistance

Imagine that you are starting an economic zones development program in a region while next door, riots are already flaring over a proposed Special Economic Zone (SEZ). Imagine that news of the protests is already all over the media in the country you are operating in and your clients and other stakeholders are bound to take note. How do you assuage their concerns and move ahead with the design of your economic zones program?

This was the situation IFC faced in 2007 when we were starting work on the design of an economic zones program in Bangladesh. At the time, the rural area of Nandigram in neighboring West Bengal, a state in India, was facing the fury of riots. Thousands of people were protesting against the state government’s plans to hand over 10,000 acres of land to a foreign investor to build a chemical complex.

Even nowadays, the ramifications of the Nandigram riots are evident in West Bengal where SEZs remain a controversial subject in the region. In Bangladesh, on the other hand, the concept of SEZs have become popular and the Government has responded by enacting a new Economic Zones Act in 2011 which creates an enabling legal framework for private sector development of economic zones. IFC played a role in popularizing the concept of SEZs in Bangladesh. It was able to do so because it took steps to understand the pulse of people in the country.

Step 1: Take the Pulse of the Public

If your aim is to ease people’s concerns, you must first understand how they feel about SEZs. You need to also figure out the undercurrents that shape their concerns—often, what appears on the surface is not what really bothers people.

IFC took this approach when creating its economic zones development program in Bangladesh. In 2008, the IFC team that I jointly led started its work by conducting a stakeholder survey that covered not only business people but also local citizens, opinion leaders and government officials. The survey used key messages to test people’s perceptions of SEZs—for each message, people had to express their feelings about the concept of SEZs.

The responses were revealing.  When people heard that SEZs are primarily meant to attract foreign investors and that those investors would get preference over their domestic counterparts, about 40% said they would be concerned. People were even more worried when they were told that the zones may displace citizens—more than 60% said they would be concerned if that was the case. On the other hand, about three out of four interviewees expressed their support for SEZs if they would lead to better working conditions. The biggest pro-zones vote was related to land utilization: 85% of the respondents felt favorably towards SEZs when they were told that the zones may lead to better use of land—perhaps no surprise in a land-scarce country.

Step 2: Apply your survey findings in the field

Our survey findings helped shape the communications campaign around the IFC economic zones development project in Bangladesh. In media briefings, seminars, workshops, IFC reports and conversations, the emphasis was always on educating audiences on how SEZs could facilitate optimal use of land and protection of the environment, and the steps that could be taken to protect the interests of displaced people. These messages struck a chord and helped popularize the concept of SEZs among stakeholders and the general Bangladeshi public.

At the same time, the findings also helped shape the design of the project.

While the project’s original goal had been to create a congenial legal, regulatory and institutional framework to facilitate the private development of SEZs—until recently, SEZs have been a public sector monopoly—we also worked with the Bangladesh government’s Export Processing Zones (EPZ) authority to improve working conditions in the EPZs. This work, which involved support to 60 labor counselors, was started by the World Bank. But when the World Bank project ended in June 2009, IFC stepped in to continue support.  This decision was substantially influenced by the findings of the stakeholder survey. 

Step 3: Launch the Program and Continue to Monitor the Results

The labor counselors have two major responsibilities: make both employers and employees aware of the laws, rules and regulations regarding working conditions, and facilitate labor dispute conciliation and mediation. Mindful of the need to assess results, the WBG has helped the EPZ authority set up a system to monitor compliance and gather data on 59 compliance issues including contracts, wages, overtime and bonus payment and leave provisions. The counselors have been successful in increasing compliance rates in a variety of areas. For example, in the Chittagong EPZ – the largest in the country - compliance on minimum wages went from 50% in June 2006 to 94% in June 2010. The proportion of grievances resolved went up from 77% in June 2009 to almost 99% in June 2011.

Meanwhile work has continued on creating the ground for private sector development of economic zones. The government has followed up on the Economic Zones Law by establishing an Economic Zones Authority to regulate private investment in zone development and is now working, with WBG support, to develop the rules and regulations needed to make the Law effective. The WBG is also helping the government attract private sector developers for an SEZ dedicated to the IT industry. This is intended to be a public-private partnership where the zone will be developed and operated by the private sector while some complementary public sector investment, such as access roads and capacity building of the Zones Authority, will be supported by a World Bank project.  Quite a bit of this momentum comes from the realization that the general public is behind the idea of SEZs – this is important for a democratically elected government.   

The message is clear. To be successful, a project can’t be conceived entirely through the designer or implementer’s eyes. Design and communication must be inclusive and user-centered—and the first step is to engage closely with stakeholders and their vision.


S. Akhtar Mahmood

Lead Investment Policy Officer

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