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Dhaka Chamber of Commerce and Industry (DCCI) has said that Bangladesh’s economic growth requires concerted efforts to reduce the cost of doing business and improve the ease of doing business, regulatory efficiency as well as logistics.
For long-term growth target of achieving a trillion-dollar smart economy, it also recommended installing appropriate infrastructures and ensuring energy security as well as access to finance for the private sector.
These recommendations came at a seminar titled ‘Biannual Economic State and Future Outlook of Bangladesh Economy: Private Sector Perspective (July-December FY24)’ organised by DCCI at Motijheel in Dhaka on Sunday.
DCCI President Ashraf Ahmed presided over the seminar and presented the keynote paper. Prime Minister’s Economic Affairs Adviser Mashiur Rahman attended the seminar as the chief guest.
Mashiur Rahman said, “Our economy has experienced fundamental changes in the last decade. During this period, the private sector has also flourished remarkably.”
“Policies should be framed considering the problems and prospects of the private sector. Consistent policies will help expedite private sector investment and boost FDI,” he added.
Stressing the need for export diversification and value addition to export products, he said, “Pharmaceutical and light engineering sectors as most potential sectors for Bangladesh. We have to functionalise the API Park as soon as possible.”
He further said that reforms of the taxation system are needed as still there are some problems and challenges. “We should also tap the huge potential of the blue economy.”
Ashraf Ahmed said, “We need to emphasise on product and market diversification. Private sector investment is targeted at 27.4 per cent of GDP in FY24 while it was 21.8 per cent in FY23. Required policies, considering the LDC graduation, will expedite the private sector investment,” he added.
To facilitate the private sector more, he called for lower corporate tax, complete automation of the taxation system, widening tax net and reforms of SD and VAT Act.
“As NPL has an impact on increasing some intermediary costs for the private sector, we should focus on reducing NPLs. Reducing the cost of doing business, uninterrupted energy supply at an affordable price, and logistic sector development will help the private sector for re-investment,” he added.
Regarding the sudden withdrawal of incentives for the RMG makers, he said, “If the entrepreneurs had favoured guidelines, they could have been planning accordingly. The CMSME sector needs not only access to finance but also access to technology to grow.”
Chief Economist of Bangladesh Bank Md Habibur Rahman said, “Due to global geopolitical instability, the prices of essentials have increased and the central bank has already taken necessary measures to tackle the situation.”
Bangladesh Bank will introduce the Crawling Peg system to bring the exchange rate under control.
“The central bank has underscored a roadmap to bring NPLs in the industrial sector down to 8 per cent within next two years. Bangladesh Bank will maintain the contractionary monetary policy until the inflation comes down point-to-point 6 per cent,” he added.
Former President of DCCI Shams Mahmud said that for a sustainable future of the RMG sector, the government should formulate proactive policies. “For boosting private sector investments in the country, the government should ensure energy at an affordable price and ensure uninterrupted gas supply to industries.”
“After the country’s graduation from LDC status, we must look into expediting our local import substitute industries to be self-sufficient.”
He also proposed for rationalised taxation system and continued special support for CMSMEs.
Ashikur Rahman, Senior Economist at Policy Research Institute (PRI), said, “Macroeconomic instability is not good for the private sector. NPLs always harm businesses. So, it is time to take serious decisions against NPLs.”
Stressing skill development and reforms of the financial sector, he said that the tax-GDP ratio is not up to expected level while it is hovering around 10 per cent.
Mohammad Yunus, Research Director, PRI said that sometimes extortion in the retail market becomes one of the main reasons behind soaring inflation. “There should be better coordination among BEZA, BEPZA and Economic Zones Authority to attract FDI. BSCIC’s industrial plots should be utilised on a cluster basis.”
