Fading hope for Garment Village

Nov 23, 2016

The fate of the much-hyped Garment Village project at Gajaria in
Munshiganj, by all indications, is sealed for now. The reason
behind the move falling through is high prices of land. The
Chinese company that had signed a memorandum of
understanding (MoU) in June, 2014 for building the village at an
estimated cost of $1.2 billion, as reported in this paper late last
week, has lately been showing all signs of backing out from the
project. There was much foot-dragging on initiating its works and
subsequently a feasibility study was commissioned. The study has
reportedly found that the project is not financially feasible
because of high prices of land at its proposed site. Moreover, the
apparel unit owners have also expressed their unwillingness to
buy land at prices higher than the running one in the market.
Thus, the official initiative to set up an industrial park having all
the necessary facilities exclusively for the export-oriented
garment factories is facing a premature death. Now officials
concerned are hoping to accommodate the apparel units in the
economic zones (EZs) that the government plans to set up across
the country. However, the execution of the EZs might also face a
daunting challenge because of land scarcity and its high prices.
Land is the scarcest resource in this country and the people do
not transfer the same unless situation compels them to do so.
Under such circumstances, the land prices and that too in areas
near the capital city have shot up to a prohibitive level. The
move to get all the garment units in and around Dhaka in one
place was a great idea, for the factories would have then got all
the utility and other services, effluent plants, accommodation for
workers, factory sheds etc., ready and without any trouble. From
the management perspective, the Garment Village concept
would have also made things rather easier for the government.
Keeping constant watch over 4,500 garment units, located
sporadically in Dhaka and its adjoining areas and in Chittagong,

remains a tough job particularly during any restive situation. The

proposed Garment Village would have solved this problem to a
great extent. Meanwhile, the scarcity of land and its high prices
are driving away many prospective investors, both local and
foreign. There are, of course, other shortcomings. But the land
issue has emerged as the number one. This is obviously so in a
country where the land-man ratio is the lowest in the world0.06
hectare per person, according to 2013 FAO estimate. Here the
problem is that the country did never have appropriate land
administration, land use plan and land management policies in
place. There have been enough of talks about improving the
situation. But because of the built-in systemic deficiencies and
widespread corruption, no notable progress has yet been made to
this end. Notwithstanding this, the government cannot give up
efforts and remain a mute spectator to an otherwise lacklustre
investment situation in the private sector, largely because of
scarcity of land. Investors would not certainly go to all the places
the government would select for building industries or economic
zones. They would do their own arithmetic, prior to choosing
locations for putting in their money. Land is a basic factor of
production and the policymakers would be required to take all
possible and also feasible steps to facilitate the entrepreneurs
getting it at an affordable cost.