Economists and experts on Tuesday said that increased support to boost production and employment generation was important to fight the COVID-19 fallout but the country had failed to attract the required investment for lack of investors’ confidence.
At a webinar on ‘Current State and Future Outlook of Bangladesh Economy: Private Sector Perspective (July-December FY2020-21)’ organised by the Dhaka Chamber of Commerce and Industry, the economists also said that the cottage, micro, small and medium enterprises and the agriculture sector should be given more priority as these were the lifelines of the economy.
Policy Research Institute executive director Ahsan H Mansur underscored the importance of reducing the poverty rate and said that government support was needed to increase production and employment generation but in order to build the investors’ confidence, the country needed to do more.
He said that most foreign direct investments had gone to China and Vietnam even amid the COVID-19 outbreak due to weak investors’ confidence in the country.
Mansur said that banks should be more flexible in lending money to the SMEs and some of the banks, including Krishi Bank and Shilpo Bank, could be enough for the development of the CMSMEs.
‘We should not only focus on restoration but we must also be prepared for future challenges,’ he said.
Mansur urged the government to make the incentive structure compliant with the World Trade Organisation rules and to reduce the inflation rate in line with the international rate to remain competitive on the global market.
Former Bangladesh Bank governor Atiur Rahman said that the CMSMEs and the agriculture sector should get more priority as these were the lifelines of the country’s economy.
He said that the tax-gross domestic product ratio in the country was quite low and the National Board of Revenue should focus on widening the tax net.
In order to build the investors’ confidence, Atiur emphasised investment in infrastructure development and speedy implementation of the ongoing mega projects.
He also highlighted the generation of renewable energy and emphasised ensuring of low-cost loan facility for start-ups and women entrepreneurs.
Bangladesh has done reasonably well in exports despite the COVID-19 outbreak while remittance has also increased, said prime minister’s economic affairs adviser Mashiur Rahman, adding that we need to be more careful about the non-resident Bangladeshis returning home from COVID-hit labour markets.
He said that the government had come up with various policy supports for the private sector and that the sector should utilise this policy regime to its advantage.
In order to facilitate local private sector investment, DCCI president Rizwan Rahman urged the government to reduce the corporate tax ratio, increase investment for infrastructure development, frame sector specific investment road maps and develop clusters of backward and forward industries.
Considering the impact of the COVID-19 outbreak, he suggested that the budget should be reviewed quarterly and its allocations should be reconsidered based on priority.
The DCCI president suggested the CMSMEs should be given access to finance through the SME Bond as an alternative means of financing as the sector had been facing challenges in developing capital, market linkages and product standardisations.
Policy Exchange chairman Masrur Reaz said that the COVID19 outbreak had caused industrial growth to slow down somewhat and slightly lowered business confidence but business dynamism, confidence and domestic demand needed to increase.
He suggested that employment protection should be addressed in the next tranche of stimulus and that a trade and investment policy nexus should be brought in.
Former DCCI president Abul Kasem Khan said that economy was in the recovery stage but there were still many challenges to combat.
‘We need to be competitive with other countries in terms of our taxation policy. Our tax-GDP ratio is one of the lowest in the region. The NBR should go after those who are not paying taxes to widen the net,’ he said.
DCCI senior vice-president NKA Mobin and vice-president Monowar Hossain, among others, spoke at the event.