Businesses call for full restoration of law and order
Business leaders at a roundtable here today called upon the interim government for restoring fully the law and order especially in the industrial belts, lowering interest rates and carrying out necessary reforms for ensuring smooth operations and sustainability of the industries.
They made the call at a roundtable on “Current State of the Economy and Outlook of Bangladesh” organized by the Dhaka Chamber of Commerce and Industry (DCCI) at the DCCI auditorium.
Speaking at the roundtable, Mir Nasir Hossain, former president of FBCCI, said that the recent labour unrest has shattered the country’s image in the global market.
He said that not only the export-oriented industries but also the domestic market-based industries are important.
Nasir said, the real effective rate of interest is too high in Bangladesh and it often hampers the entrepreneurs to compete with the international market.
Saying that reforms are badly needed in the NBR and customs houses, Nasir said, “Moreover, customs houses should be automated. Although the initiative has been taken few years back, but it is yet to see the light”.
He said although an affluent middle income group has grown up in recent past in the country, but in line with that, the tax net has not been widened, which is not desirable.
The former FBCCI chief said due to lack of uninterrupted gas supply, the manufacturing industries are suffering a lot. To resolve the crisis, he suggested for strengthening on-shore and off-shore gas exploration.
Syed Nasim Manzur, President of Leather Goods and Footwear Manufacturers & Exporters Association said that the businessmen now feel unsecured due to labour unrest and vandalism.
Declining the purchase capacity of people triggered by high inflation of money led to reduce public consumption of food and services remarkably, he noted.
Nasim said that the double-digit rate of interest on industrial loan is not viable for sustaining in the competitive market.
He said, FDI is needed for a country like Bangladesh, but due to low confidence, it remains stagnant now. He hoped that FDI will see a positive move within few days.
Calling for protection of RMG sector, Nasim Monzur said, “We’ve to save the RMG industry as it has a multiplier impact on our overall economic value chain”.
Mohammad Hatem, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that a good understanding and relation between the owners, workers and labour leaders can mitigate any unrest as well as violence in the factories.
He also laid importance on giving industry owners adequate time to repay their loans requesting the Bangladesh Bank to take steps in this regard.
Dr. M. Masrur Reaz, Chairman & CEO, Policy Exchange Bangladesh said, the government could not take the right policy in right time which caused the macro-economic crisis in recent past.
“Confidence level of investors is shattered now, law and order especially disorder in the ‘order’ part, labour unrest, inflation are some of the pressing issues for the macroeconomic challenges for Bangladesh,” he said.
Reaz also said, “We’ve seen a commendable progress in the banking sector reforms recently, but in the other areas we’re yet to see the policy governance.”
“We’ve to keep our forex reserve stable through steady flow of remittance, export earning and FDI to restore confidence of the people,” he said.
Shams Mahmud, former President of DCCI & Managing Director of Shasha Denims Limited mentioned that the labor unrest in Ashulia region disrupts the production in the factories.
“If the law and order situation does not come into normalcy there, buyers’ confidence will be hampered and thus buyers’ order may shift from Bangladesh to other competitors,” he said.
Regarding NPL, he said for the mismanagement of banks, genuine businesses should not suffer in getting loans while the banks should also be accountable for any mismanagement.
Ahsan Khan Chowdhury, Chairman & Chief Executive Officer (CEO) of PRAN-RFL Group noted that Bangladesh is a land of opportunities and it could be one of the hub of global business for its immense potentials.
He said, the main task of the business community is to create employment, but sometimes, it causes setback due to labour unrest.
Laying importance on active role of police in marinating law and order, he said, “We want to see the police as it should be,…We want to see all law enforcing agencies back again with their full capacity.”
Ahsan also said that with the high rate of bank interest, it is difficult to sustain. “We should have a rewarding system for the good borrowers. There should not be any restriction on opening LCs to create employments and keep operational the wheels of industries.”
Syed Mohammad Kamal, Country Manager of Mastercard Bangladesh said, from July-August, digital spending has remarkably dropped down as consumption was in the downward trend.
He suggested incentivizing digital payment system over cash payment. At present the remitters get 2.5 percent incentive on their remittances sent to Bangladesh. If this facility is withdrawn, they will go for unofficial channel to send remittance to home that may affect foreign currency reserves, he observed.
Ambareen Reza, Co-Founder, Chairman & CEO of Foodpanda Bangladesh urged for low cost fund for the SMEs. She also said that number of loan defaulters in the CMSMEs or startups is very negligible.
DCCI President Ashraf Ahmed said, at present Bangladesh is experiencing an unstable economic growth trajectory with slow GDP growth, coupled with few other challenges.
Currency devaluation, rising inflation, financial instability, labour unrest, concerns over energy security and disruptions in key export industries are making the country’s economy unstable.
He suggested for immediate restoration of law-and-order situation as it required for the stability in the current business environment.
Ashraf also stressed on faster reforms in the banking governance and suggested to address NPL and liquidity shortage issues that must be prioritized to restore confidence in the financial system.
To combat inflation, he said, the government can pursue supply-side reforms to ensure smooth distribution of essential goods and services.
Diversification of the energy mix and new energy supply routes and improving investment in the energy sector are must for safeguarding the industrial productivity, he added.
The DCCI president suggested for planned housing, education and healthcare services in the Ashulia and adjacent areas to provide a low cost living facilities to the workers of that particular area.
DCCI Senior Vice President Malik Talha Ismail Bari was also present on the occasion.