Investment and Export Diversification Policies need to be Supportive for Potential Sectors, said speakers at a view exchange meeting on Monday.
The meeting took place between Commerce Minister Tipu Munshi and the Business Initiative Leading Development (BUILD) Chairperson Abul Kasem Khan as the latter paid a courtesy call on Tipu Munshi at his office.
Commerce Minister Tipu Minshi said his Ministry will work to reduce the current minimum paid-up capital to 0.5 million from 2.5 million for the one-person company in the Companies Act (2nd Amendment) Bill, 2020 to allow more small businesses to take part in registration, thus enabling their formalization. Minister also emphasized on the need for trade license for e-commerce businesses.
Mentioning that e-commerce should be automatically recognized as enterprises, the Minister added that this high-potential sector is not getting promoted as expected since they need trade license.
His Ministry is already working with the Local Government Ministry to speed up introducing trade license for the industry so that e-commerce businesses could avail access to finance as well as other opportunities.
Stressing on the importance of enabling business environment in Bangladesh, he stated that the Commerce Ministry is always open to extend all forms of logistical support to make the private sector vibrant.
He appreciated the role of private sector in creating a platform like BUILD for evidence-based public-private dialogue between government and trade and industry to create a business-friendly environment through policy reforms.
BUILD Chairperson Abul Kasem Khan said that our export is heavily concentrated on one sector. Other sectors like leather and leather goods, plastic and light engineering merit greater policy attention for diversifying the export basket. All the non-RMG sectors immediately need bonded warehouse facilities besides other policy benefits.
He informed that Vietnam established Global Distribution Centre managed by privately owned licensed operating firms, from where entrepreneurs are getting all raw materials from exports from a single source. In connection to attracting FDI, supply side management is the primary requirement. Large companies need confidence on supply side management before making the investment decision in a country.
BUILD Chairperson thanked the Minister for Bilateral Free Trade Agreement (FTA) with Bhutan. Terming this as a good beginning, he put emphasis on South-South Collaboration. In this connection he stressed on ensuring duty-free access to the Chinese market. For export diversification, he requested greater focus on jute and bamboo.
BUILD Chairperson also informed that BUILD is working on three export sector roadmaps. Once the road maps are prepared, national level dialogues will be organized to disseminate the main points and BUILD will expect all support from MOC in that respect.
Earlier Asif Ibrahim, Chairman of Chittagong Stock Exchange and former Chairman of BUILD informed about the situation of RMG sector and thanked the government for extending the provision for allowing utilization declaration (UD) through the BGMEA, which has helped businesses carry out export-oriented manufacture efficiently without bureaucratic hassles.
BUILD CEOFerdaus Ara Begum informed that Bangladesh and Vietnam started export diversification journey almost at the same time in 1990. However, Vietnam has made tremendous progress so that if their RMG sector is adversely affected, only 14% of its export would be impacted.
Export of Vietnam stood at USD 263.45 billion in 2019, out of which RMG export was USD 39 billion. A different picture has emerged in Bangladesh where RMG singularly contributes about 85% of export.
Hafizur Rahman, Additional Secretary, MOC and Project Coordinator EC4J raised the issue of the need for halal certificate. In that respect health compliance rules need to be prepared.
