Bangladesh has been facing economic headwinds for the last couple of years due to its fragile banking sector, which occurred due to a huge amount of capital flight, and high government borrowing from banks to recover the budget deficits — resulting in a liquidity crunch for the private sector.
In light of this, Bangladesh should delay its Least Developed Country (LDC) graduation as there is no money in banks for the investment needed for the transformation of LDC graduation, says Shams Mahmud, managing director of Shasha Denims Limited.
“We need low-cost access to funds. We do not have the money in our bank for the investment needed for the transformation of GSP+ following LDC graduation,” he said while speaking at a dialogue organised by the Centre for Policy Dialogue in Dhaka on Wednesday.
“We need a white paper for our economic fundamental scheme. Based on that, we will take our policy measures. After seeing the white paper, if the consensus comes that we do not need to graduate, we should not graduate now. We will graduate after 10-15 years if needed,” he said.
About the former chairman of the National Board of Revenue, Shams said, “He was incharge of everything including LDC graduation policy, which could be disastrous and the business community was really scared about that.”
Noting that there is no rule of law at the Bangladesh Securities and Exchange Commission (BSEC), he said, “We are all talking about the financial sector. However, we are not addressing the bond market under BSEC. Those without licences are withdrawing money through bonds.”
Those who are involved in looting banks are inside Bangladesh,he said, adding that the government should impose a travel embargo immediately and prevent these people from fleeing the country.
All the credit cards should be stopped and accounts of all the bank directors should be frozen, he said.
Shams, also a director of the Bangladesh Garment Manufacturers and Exporters Association, said, “We also need a clear message of what is the period of this interim government. All policies,including the trade policy,taken in the last decade need to be reformed.
Shams, a former president of Dhaka Chamber of Commerce and Industry, said, “We should create a linkage for small and medium enterprises. This is the right time to address these sorts of problems. There are also three to four companies that are controlling the whole commodity market.”
He further said, “One of the largest commodity traders has a strong influence in banks that used to control the prices in the market. As they are not operational now, import-based commodity marketsfrom edible oil to sugar will be unstable.”
