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Mannan stresses ‘Look East’ policy for better regional gain


Published : 11 Jul 2020 08:43 PM | Updated : 07 Sep 2020 10:00 PM

Planning Minister MA Mannan on Saturday said that all the sectors should be compliant like RMG sector. 

Laying stress on look east policy for better regional gain, he said in terms of business, every door should be opened and the good governance, which is achieved, is a fruit of long term effort.

Minister was addressing a webinar on Current State & Future Outlook of Bangladesh Economy organized by Dhaka Chamber of Commerce and Industries (DCCI) 

He said government is giving priority to the agriculture sector. To get observer status in the ASEAN, government is working. In line with RMG and textile a new avenue, medical textile has been emerged worldwide.

Minister called upon the private sector to grab this opportunities. For infrastructure development, he also invited private sector to come forward and government will facilitate the private sector in this regard.

Addressing the webinar, DCCI President Shams Mahmud said that more focus needs to be given on sourcing funds from external sources reducing dependency on bank borrowing to mitigate the deficit budget. 

He also suggested to reduce source tax for export oriented sectors to 0.25%. Agriculture and agro processing industry need to be supported and remain functional with strong local-supply chain system to ensure low-cost food security, he told.

Due to COVID-19 impact, private investment is projected to down to 12.72% in FY2019-2o compared to 23.54% in FY2018-19. FDI inflow in Bangladesh fell to USD2.87 billion in 2019 compared to USD3.6 billion in 2018. In that context, to seize the opportunity of investment relocation from China, Bangladesh needs to frame sector specific investment road-map with strategic action plan and corporate tax needs to be rationalized.

Due to COVID-19 outbreak, both demand and supply side shock weakened the international trade of Bangladesh. In FY2019-20, total export was USD33.67 billion which is 25.99% less than export target and 16.93% less than FY2018-19. In order to boost international trade, he emphasized on restoring GSP facility in USA, eliminating non-tariff barriers with partners through strong diplomatic initiatives, FTA and PTA with potential partners.

According to different international organizations around 15-20 million people are in the risk of being unemployed due to the pandemic. Thousands of migrants may lose their jobs and will repatriate to Bangladesh. 

Due to COVID-19, international buyers cancelled work order worth of  USD 3.18 billion from Bangladesh. Total export of RMG declined by 18.12% to USD27.95 billion in FY2019-20 which was USD 34.13 billion in FY2018-19. On this ground he recommended to reduce source tax from 0.5% to 0.25% as the world export market is shrinking. Besides, cash incentives need to be rationalized and given in terms of value addition. 

In FY2019-20, total export of leather & leather products decreased by 21.79% compared to same period of previous year. Terming the leather sector a booming one, Shams Mahmud strongly recommended to establish CETP, ensure low cost loan for the tanners and reduction of duty over import of chemicals.

Micro, Small and Medium enterprises (MSME) sector is hard hit due to COVID-19 outbreak. Banks are also reluctant to disburse loan under the stimulus package to MSMEs. For MSME recovery from the covid crisis, special re-financing scheme needs to be introduced with low-cost foreign funds and access with minimum 2 years grace period with 1-2 percent interest rate. 

Chairman, Policy Exchange Dr. M. Masrur Reaz emphasized on survival, resilience and revival for economic recovery. Global Demand and supply have been declined due to covid 19. He suggested to take short and mid-term strategy to bring economy back from covid situation. 

Hossain Khaled, Managing Director, Anwar Group of Industries and former President, DCCI said government’s high bank borrowing may slow down credit flow to the private sector. Industries are trying hard to keep existing employment safe, in that case Banks and industries should run hand in hand. 

Abul Kasem Khan, Chairman, BUILD & former President, DCCI said how to give the economy a full pace should be the main focus now. 

He said people going abroad with false covid report will hamper our positive image. He also urged for a regionally competitive tax structure for better performance of businesses. 

Asif Ibrahim, Chairman, Chittagong Stock Exchange Ltd. & former President, DCCI said in Bangladesh GDP-market capitalization is mere 11.1% which is not up to the expected level, whereas it is quite high in our neighbouring countries.