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BANGLADESH’S economic journey is often told as one of overcoming impossible odds. With scarce land, fragile infrastructure, chronic political turmoil and bureaucratic bottlenecks, the country has long seemed ill-suited for large-scale industrialisation. Yet two institutions have fundamentally altered that trajectory. The Bangladesh Export Processing Zones Authority (BEPZA) provided the disciplined template that proved industrial enclaves could attract global capital, while the Bangladesh Economic Zones Authority (BEZA) embodies a far more ambitious gamble: building vast industrial cities across the country. Together, they represent what may be called the twin arsenals of Bangladesh’s industrial strategy. BEPZA was the quiet workhorse that delivered export enclaves; BEZA is the bold experiment that seeks to scale up into industrial ecosystems. But the central question that will determine the sustainability of both is not simply about incentives or governance. It is about land — the opportunity cost of industrialising cultivable farmland in one of the world’s most densely populated nations.

BEPZA was created in 1980 and launched its first zone in Chittagong in 1983. Its model was straightforward but transformative: acquire land, fence it off, guarantee electricity, water and transport, and provide investors with a single-window administrative authority. The formula worked. Over time, BEPZA expanded to eight zones, stretching from Dhaka to Mongla. By the mid-2010s, these export processing zones had attracted over 3.5 billion dollars in cumulative investment, generated tens of billions in exports, and created more than 420,000 jobs. Roughly two-thirds of those workers were women, many from rural households with no previous access to wage labour. Their income financed education, healthcare and land purchases, altering family dynamics and expanding the role of women in Bangladesh’s economy. Equally important was BEPZA’s governance. In a country notorious for bureaucratic red tape, its one-stop service — where permits, customs clearances and work authorisations were handled within days rather than months — became a beacon of efficiency. Tax holidays, duty-free imports and repatriation of profits further sweetened the package.

Yet BEPZA’s success carried within it the seeds of its exhaustion. Geography restricted outcomes, with zones near Dhaka and Chittagong flourishing while those in more remote areas stagnated. Sectoral concentration was striking, as garments and textiles dominated while diversification remained limited. Land saturation became critical; by 2015, more than 93 per cent of industrial plots in EPZs were occupied, leaving virtually no room for expansion. Supply-chain spillovers into the wider economy were weaker than expected, since much raw material was imported duty-free, processed and re-exported. And most importantly, many of BEPZA’s zones were located on or near cultivable land. Industrial success, in this sense, came with hidden costs to food security. As Bangladesh’s population grows and arable land shrinks, this trade-off has become unavoidable.

Bangladesh has one of the highest population densities in the world, with over 1,200 people per square kilometre. Every acre of fertile farmland carries an opportunity cost: converting it to industrial use means reducing domestic food production. For a country still vulnerable to food price shocks and climate-related risks, this is no small concern. In the early decades, policymakers prioritised accessibility when choosing EPZ sites. Chittagong and Dhaka made sense because of their ports, highways and concentration of workers. But that meant building zones on or near fertile agricultural land, inadvertently displacing farmers and increasing reliance on imported food grains. This trade-off is unsustainable in the long term. If Bangladesh industrialises at the cost of cultivable farmland, the country may face the paradox of rising exports alongside rising food insecurity. The challenge is to locate new industrial zones in low-yielding, underutilised or remote areas, turning them into engines of both industrial growth and regional development.

It is precisely to address these constraints that BEZA was created in 2010. Its mandate dwarfs that of BEPZA: establish one hundred economic zones within 15 years, create 10 million jobs, and generate an additional $40 billion in exports. The conceptual leap is significant. Unlike EPZs, which were designed as fenced enclaves, BEZA’s zones are conceived as industrial cities: vast tracts of land with not just factories but housing, schools, hospitals, logistics hubs and power stations. They are designed as ecosystems that can transform entire regions.

BEZA’s site selection strategy has explicitly emphasised non-arable or low-yielding land. Mirsarai Economic Zone, spread over 7,716 acres in Chattogram, sits near a planned deep-sea port, ensuring connectivity while avoiding prime farmland. Sirajganj Economic Zone, with 1,041 acres in Rajshahi division, targets a historically neglected region using land less suited for high-yield agriculture. Bhola and Jamalpur zones utilise chars and riverine lands, converting flood-prone or underproductive areas into industrial hubs. Mongla Economic Zone, at 205 acres near Bangladesh’s second seaport, combines coastal location with opportunities for shipbuilding and petrochemicals without displacing rice paddies. This approach minimises the opportunity cost of industrialisation. Instead of eroding food security, BEZA seeks to build new urban centres on land previously considered marginal.

The importance of this strategy goes beyond economics. By locating economic zones in low-yielding or remote areas, the authority is also planting the seeds of new towns. Mirsarai, Sirajganj and Bhola are not simply industrial projects; they are future urban centres with employment opportunities, housing and services. This has three profound implications. First, it addresses the regional imbalance that has long plagued Bangladesh. Dhaka and Chattogram dominate industrial output, leaving large swathes of the country underdeveloped. Economic zones in Rajshahi, Barisal and Sylhet divisions spread growth more evenly. Second, it creates employment close to home. Migrant flows to Dhaka have swollen the capital beyond capacity, straining infrastructure and services. New industrial towns can absorb rural youth locally, reducing migration pressure. Third, it aligns with Bangladesh’s food security needs. By building on underutilised land rather than high-yield farmland, BEZA allows agriculture and industry to coexist, each reinforcing the other rather than cannibalising resources.

To attract global capital, BEZA offers some of the most generous packages in South Asia. Developers enjoy ten-year tax holidays, exemptions on utilities and registration fees, and relief from customs duties on construction materials. Investors within zones can secure up to 100 per cent tax holidays, duty-free imports, full repatriation of profits, and even citizenship for investments above half a million dollars. Equally critical is BEZA’s promise of one-stop service, modelled on BEPZA but vastly scaled. Whether it can deliver such efficiency across one hundred zones remains to be seen, but the intent is clear: industrial growth without bureaucratic obstruction. Recognising the limits of state capacity, BEZA also relies on private and public–private partnerships. Conglomerates like Abdul Monem and Meghna have licenses to develop zones, while global advisors such as PwC assist in structuring deals. BEZA is as much a facilitator as a regulator.

Other countries provide both inspiration and warnings. Vietnam demonstrates the power of connectivity: zones along the Hanoi–Ho Chi Minh corridor tied to global supply chains attracted Samsung and Intel. Ethiopia shows the risks of relying solely on cheap labour, as its industrial parks faced criticism for poverty wages and weak linkages. India highlights the importance of governance: Gujarat’s zones thrived, while others languished due to poor infrastructure and land disputes. For Bangladesh, the message is straightforward. Industrial zones succeed not just on incentives but on connectivity, governance and sustainable labour practices. Without these, even generous incentive packages will not prevent zones from becoming underutilised ghost towns.

Still, BEZA’s gamble comes with serious risks. Land acquisition in a densely populated nation is politically sensitive, and displacement without fair compensation can trigger protests and litigation. Infrastructure must keep pace; zones are worthless without roads, power and ports. Institutional capacity is another hurdle. BEZA is still a young organisation tasked with coordinating ministries, private developers and foreign investors. Finally, Bangladesh faces intense competition from Vietnam, India and Cambodia, all of which are aggressively courting the same investors.

BEPZA and BEZA together embody Bangladesh’s twin industrial arsenals. The former was the workhorse that proved industrial enclaves could deliver jobs, exports, and investment. The latter is the gamble that seeks to scale those successes into diversified industrial cities. But the defining test is not simply governance or incentives. It is how Bangladesh manages the land trade-off between food security and industrialisation. Past EPZs consumed valuable farmland, contributing to land saturation and limiting expansion. Future EZs must avoid that trap by targeting low-yielding and remote lands, transforming them into new industrial towns while safeguarding cultivable plots.

If BEZA succeeds, Bangladesh can move beyond garments, foster balanced regional growth and build resilience against global shocks. If it fails, the country risks eroding food security, displacing farmers and squandering billions on unfinished projects. The challenge for policymakers is therefore clear: industrialisation must proceed, but not at the cost of cultivable land. Bangladesh’s future prosperity depends on ensuring that its twin industrial arsenals fire in harmony — discipline from BEPZA, ambition from BEZA, and above all, stewardship of land that sustains both food and industry.

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Dr Abdullah A Dewan is a former physicist and nuclear engineer at the BAEC and professor emeritus of economics at Eastern Michigan University, USA.Ìý Humayun Kabir is a former senior UN official.