Bangladesh is promoting itself as an ideal investment destination for Hong Kong businesses, as it offers some of the lowest labour costs in the region and an educated workforce. The country's Consul-General to Hong Kong, Fazlul Karim, believes that local companies should invest in his country's key industries, where they are eligible for special economic incentives. These include tax holidays, avoidance of double taxation, duty exemptions, concessions on machinery and full repatriation of invested capital, profit and dividends. 'Hong Kong can take advantage of probably the cheapest labour rates not only in the region but also the world,' he says, encouraging local enterprises to consider Bangladesh as a base for manufacturing. 'Hong Kong is a very vibrant city. What amazes me is its thrust on trade and investment and finance. It is an open and cosmopolitan city that is very friendly to foreigners. It did not take much time to settle in,' he says. Mr Karim hopes to contribute to strengthening trade and other ties between his country and Hong Kong. Last year, Bangladesh exported about US$100 million worth of goods to Hong Kong. The consul-general would like to see that figure increased significantly. Imports from Hong Kong were worth about US$530 million for the same period. These included electronics, garments, household goods and re-exports from the mainland. Key industries identified for foreign investment include information technology, leather, pharmaceuticals and ceramics. In addition, Bangladesh is pushing for more investment in agricultural and natural gas-based industries. 'We have 130 million people, with a literacy rate of about 65 per cent, who are easily trainable,' Mr Karim says. Prime concerns of the Bangladeshi government include market-driven fiscal reforms, a liberal monetary policy, export diversification and rapid privatisation of state-owned enterprises. The government has also established export processing zones - export-orientated industrial enclaves providing infrastructural facilities, administrative and support services to investors. Bangladesh is not without its problems, and a major government initiative continues to be poverty alleviation. The education of girls has also been given prominence, with free schooling provided up to the 12th grade and special scholarships aimed at the female population. The government has accomplished much in the area of population control. Through public education, media awareness and modern contraception methods, the growth rate has fallen from 3.1 per cent in the 1970s to about 1.5 per cent. At its independence in 1971, with a population then of about 75 million, the country was a net importer of food. Now, Bangladesh does not need to import staples such as rice, says the consul-general. 'Bangladesh is a peace-loving and tolerant society that promotes stability. It has one of the most open and transparent economies in South Asia. 'While there is a Muslim majority, there are Hindus, Christians and Buddhist living together with no major violence . . . because the government is a strong promoter of tolerance.' Bangladesh, India, Pakistan, Sri Lanka, the Maldives, Bhutan and Nepal formed the South Asia Association for Regional Co-operation, an initiative by the country's late president Ziaur Rahman. Established in Dhaka in 1985, the group aims to promote social and economic co-operation through free trade, beginning with preferential intra-trade within the group. While this has positive implications, war in the Middle East does not bode well. 'It will affect everyone, especially those countries exporting goods to Europe and the West,' says Mr Karim. Hong Kong is host to a Bangladeshi community of about 500 people. Mr Karim arrived in Hong Kong last October, his first posting in the region. He was deputy high commissioner for about a year in Islamabad and, prior to that, a political counsellor in Washington DC.