Bangladesh is celebrating its 50 years of independence with dignity and pride which has emanated from impressive developments the country attained during these decades to transform itself from a so-called “basket case” to a “development surprise”. We have been able to consistently maintain a GDP growth over 7 per cent in the last few years; the per capita income has just grown above 2227 dollars while export-import has crossed 100 billion dollars. Life expectancy has increased, and we were quite outstanding in achieving the MDG goals. We now believe that in the next decade, Bangladesh will be able to grow at around eight per cent or perhaps even faster. Looking at the economic growth from macro perspective, trade and industrialisation are the major pillars of our economy. The share of manufacturing sector to the GDP has been growing successively over the last decade. It will not be an overstatement to say that the future of our economy and its prosperity will depend on industry. Apparel is the prime industrial sector of our country and a major economic pillar through its contribution to earn 84 per cent of country’s total export income. To maintain a positive trade balance, overall balance of payment and foreign currency reserve, export-oriented sectors are the lifeline. While realising the significance of export and industries for the immediate and long-term economic growth of our country, the competitiveness of industries especially the export-oriented sectors need special attention. Though Bangladesh is one of the most favoured nations in the South Asia for investment, we still have many limitations. According to recent reports, Bangladesh is still the 168th country in the World Bank’s Ease of Doing Business’ Index 2020. We need more reforms in regulatory issues to simplify the process of doing business in Bangladesh. We appreciate the sincere efforts taken by our government to improve the business climate including legal and administrative reforms and increased priority on good governance and transparency. There are certain difficulties we face in getting different services and this writer believes that the able officials of the government are working to improve these situations to create a more favorable environment for doing business in the country. As far as transparency and due diligence is concerned, we must adhere to our principles, yet the simplification of business and efficiency must not be compromised in any way. Simplification of customs procedures, especially Customs Bond Audit and its full digitization is the need of the time. Lead time is a very crucial factor for determining sourcing of apparel in this era of fast fashion where design and trends are changing rapidly, and the business has become very competitive. The inadequate infrastructure is causing higher lead time and is a threat to our competitiveness. We should thank our Prime Minister for taking visionary steps to develop mega infrastructures to create a favorable environment for investment. Our government has taken up projects to develop infrastructure, and revamp power and energy sector. However, in order pursue a robust growth in trade, we need to take vigorous step to build required capacity of the port. We also need a deep-sea port as its absence is being felt by the overwhelming pressure on the Chattogram port which alone handles around 92 per cent of our total cargo. The massive construction work at Matarbari Deep Sea port is showing us ray of hope. Utilities cover up a significant part of the industrial inputs, and are major determinants of our business viability. There is no question with regards to Bangladesh’s tremendous progress in the area of power generation and transmission; the electricity generation capacity has been increased to 25,227 MW. However, power interruption still remains a concern for us since load shedding or insufficient voltage severely hampers the production process with significant loss of efficiency. Another problem from which the factories in few areas suffer from is the inadequate gas pressure. Just like electricity, our capacity of national gas production has improved immensely in the past twelve years, but the inadequate pressure in industry-intensive area like Gazipur has to be resolved since it is causing dent in productivity and quality of products, increasing lead time and costs. Financing is another important factor for our growth and sustainability. Though the bank interest is lowered to single digit, there are different fees and charges being imposed, which increases the overall cost of finance. Especially the SMEs are quite vulnerable to the demand shock as well as the financial distress caused by the pandemic. As SMEs are important subset of the industry and their importance in export earnings and employment is enormous, special financing scheme will enable them to stay in business and contribute to export and employment. We need protection against the buyers’ bankruptcy impact and non-payment, sudden cancellation of the orders. There are good number of factories who have already faced such situation and is running at risk of insolvency. They need to be protected. Bangladesh has lagged behind in insolvency resolution. We need legal reforms to protect entrepreneurs and investments from uncertainties, particularly the insolvency resolution mechanism. We need more simplification of the banking rules to allow businesses to grow. Currently as per the policy of our central bank, if a factory becomes defaulter, then the banking services to other good factories under the same group are stopped. Green banking requires cumbersome due diligence process that involves high transaction costs. We need reforms to overcome these issues. A stable fiscal policy regime (TAX, VAT, cost of utilities, cost of finance) is precondition to stable growth of RMG industry. Fluctuations in policies dent the confidence of the entrepreneurs and hinder growth. To sum up, the priority areas on which we should work on with utmost urgency are – infrastructure, efficient custom processes, inland transportation, and facilitation of trade, good governance and ease of doing business. If we can address these issues, I believe Bangladesh will be able to tap many new opportunities and realize the targets.
Vice President, BGMEA
