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Seven Japanese were killed as a result of the standoff with gunmen at a restaurant in Dhaka, Bangladesh, Japanese Chief Cabinet Secretary Yoshihide Suga said on July 2.
Chief Cabinet Secretary Yoshihide Suga said July 2 that seven Japanese are among those killed at a restaurant in Dhaka. Photo: The Asahi Shimbun
With a man rescued with bullet wounds, the eight Japanese were employees of Japanese companies taking part in an infrastructure project funded with a yen loan from the Japan International Cooperation Agency and they were eating at the restaurant in the Bangladeshi capital when it was stormed by gun-wielding militants. according to the Asahi Shimbun.
Japanese firms in Bangladesh strengthen security measures
The Yomiuri Shimbun reported that the Japanese companies with business operations in Bangladesh are confirming the safety of their employees and collecting information about the Dhaka terrorist attack.
Makoto Okamura,32, was one of those who were killed by gunmen at a restaurant in the Bangladeshi capital. Photo: Taken from Okamura's Facebook account
Enhancing crisis management capabilities has become a pressing need for Japanese companies, with an executive of a major trading house saying, “[Bangladesh] has been one of the countries that require the maximum level of security and safety measures.”
Major textile maker Toray Industries, Inc. jointly operates a factory in the suburbs of Dhaka. It has prohibited all employees, Japanese and otherwise, from going out, even for sales activities. Meanwhile, Itochu Corp. has canceled business trips for two employees who had planned to visit Bangladesh from Sunday.
The Bangladeshi government has designated eight special economic zones, or export processing zones, in which preferential treatment is given to overseas companies in terms of tax systems and business procedures. A number of Japanese companies operate their factories in these areas.
Bangladeshi policemen stand guard in an area cordoned off after a hostage attack took place at the heart of the diplomatic zone in Dhaka on Friday night. Photo: AP
“The special zones are protected by armed police and their security is ensured,” said Kiminobu Hiraishi, president of apparel company Maruhisa Co. in Tokushima Prefecture.
Fast Retailing Co., which operates Uniqlo clothing stores, has told Japanese and other employees to refrain from going out at night and to avoid any nonessential business trips in response to a murder case in which a Japanese was shot to death in the northern part of Bangladesh in October 2015.
The Japan Overseas Enterprises Association, which has a membership of about 280 mostly major companies that have business operations overseas, conducted a survey in June 2015. It found the number of Japanese companies that have safety manuals regarding terrorist attacks and other disasters was 71 percent, five percentage points higher than four years earlier.
However, companies that work in emerging countries include a number of small and midsize firms in industries such as apparel and sewing.
“There is a limit for those companies in dealing with their own security measures in terms of know-how and capital, unlike major corporations,” said a source close to those in such situations.
It is said that many Japanese expatriates eat out together to exchange information. A senior official of the Japan External Trade Organization’s regional branch in Bangladesh said, “There are limited options for self-defense — using vehicles for transportation and avoiding going out at night.”
The sentiment of Bangladeshi people, especially among workers, toward foreign companies has deteriorated since the collapse of a building containing several clothing manufacturers in 2013, killing a large number of workers. Labor disputes have also frequently occurred regarding wage levels and working conditions, making it difficult for foreign companies in the country to take security measures, including against terrorist attacks.
Japan’s economic relations with Bangladesh deepening
Economic relations between Bangladesh and Japan have been rapidly deepening. According to the Yomiuri Shimbun, an increasing number of Japanese companies choose the country rather than China as a production base due to its low labor costs.
The Yomiuri Shimbun said that because Bangladesh’s economy has continued to have high growth, Japanese companies are hopeful about not only the country’s demands for infrastructure, but also it being an attractive consumer market in the near future.
If this terrorist attack raises the risk sentiment about the country’s security conditions, it is feared that the business activities of about 240 Japanese companies operating in Bangladesh may be negatively impacted.
Bangladesh’s real gross domestic product growth rate has been at least 6 percent since 2011. According to the World Bank, Bangladesh’s GDP growth rate in 2016 will likely be 6.3 percent.
Demands for power generation plants, railways, bridges and other infrastructure in the country have been rapidly growing.
In a five-year period through fiscal 2014, Japan offered a total of ¥1.6 trillion of assistance for the country’s development.
According to the Japan's Finance Ministry’s trade statistics, the total trade value between the two countries in 2015 amounted to ¥297.1 billion. The figure increased 34 percent from the previous year.
Exports from Japan amounted to ¥166.3 billion. In addition to steel and machinery for manufacturing plants, exports of automobiles and other consumer products have been increasing.
Japan’s import value from Bangladesh amounted to ¥130.8 billion. Many of the goods are clothing and textiles produced for the Japanese market.
According to the Japan External Trade Organization (JETRO), among the Japanese companies operating in the country, about 80 percent are small and midsize companies that mainly produce screws, rubber and plastic parts.
The Yomiuri Shimbun believed that Bangladesh’s population is about 160 million and wage levels of plant workers are said to be about one-fourth of those in China.
In many cases, Japanese companies that had produced textile and apparel products in China increased or shifted their production bases to Bangladesh.
Fast Retailing Co., which operates the Uniqlo clothing store chain, has produced goods in plants on consignment in Bangladesh since 2008.
The company opened a store in Dhaka in 2013 and the number of its stores in the country has reached nine.
In this terrorist attack, Fast Retailing confirmed that all of its employees in the country were safe. One of the stores close to the site of the incident suspended operations temporarily.
Ajinomoto Co. established its local unit in Dhaka in 2011, in which two Japanese employees are stationed. Though about 60 employees work in the local unit’s factories, such as one for packaging Ajinomoto-brand seasoning, the company said, “We have not received a report that any of our employees are victims.”
A consortium in which Japanese general contractors, including Obayashi Corp. and Shimizu Corp., take part, has built and repaired bridges. After the terrorist attack, the consortium confirmed 25 workers in the construction projects were safe and instructed them to stand by at home.
Starting this year, Tokyu Construction Co. has engaged in a project in Dhaka related to construction of Bangladesh’s first express railway. A company spokesperson said, “We’ll judge how to respond while watching situations in the country.”
In the wake of the terrorist attack, an official of JETRO’s Dhaka office expressed concern: “It is possible that new investments from Japan will slow down from now on. We hope the incident will not adversely affect the good economic relations.”
(THE YOMIURI SHIMBUN/THE ASAHI SHIMBUN)
