COVID-19 Pandemic

Reform policy to tap potential in changed global scenario, businesses urge govt

Staff Correspondent | Published: 23:00, Jul 11,2020

 
 

The photo taken on June 18, 2020 shows an official inspecting a sweater while labourers work at a garment factory in Savar on the outskirts of Dhaka.  Business leaders on Saturday urged the government to reorganise its economic and development policies in line with the changed global scenario amid the COVID-19 pandemic to protect jobs and livelihoods. — AFP photo

Business leaders on Saturday urged the government to reorganise its economic and development policies in line with the changed global scenario amid the COVID-19 pandemic to protect jobs and livelihoods.

They sought proper implementation of the governmentannounced stimulus package to curb the rise in unemployment at a webinar on ‘Bi-annual Economic State and Future Stance of Bangladesh Economy: Private Sector Perspective’ organised by the Dhaka Chamber of Commerce and Industry.

‘The world economy is going through a change and many countries are looking for an alternative sourcing country other than China. We need to revisit our total industrial policy, including export and import policies, to tap into the potentials of the changed global situation,’ former DCCI president Abul Kasem Khan said. 

He said that the country’s informal sectors should be brought under the government’s stimulus package considering their contributions to employment generation and the nation’s gross domestic product.

Kasem said that the false COVID-19 test reports were also hampering the employment of Bangladeshis overseas and the government should address the issue.

He urged the government to address the supply side constraints to attract foreign direct investment.

Kasem also demanded a reform in the tax policy, saying that Bangladesh was losing its competitiveness due to the existing tax structure.

‘We need to be connected with ASEAN and the free trade agreements should be effective,’ he added.

‘Investment for research and development in industries should be tax-free,’ he said.

Policy Exchange chairman Masrur Reaz said that overall employment protection was important for the country as 1.6 crore people had already lost their jobs due to the COVID-19 outbreak.

‘If the unemployment rate continues to increase, the country will lose its economic prosperity due to a lack of domestic demand,’ he said.

Masrur suggested that the tax burden on businesses should be reduced to attract FDI alongside lowering the multiple VAT rates for the SMEs.

He also emphasised governance in the banking sector, saying that the financial sector had been struggling with non-performing loans for a long time.

He also suggested that the bond market should be developed to ensure private sector finance.

Former DCCI president Hossain Khaled said that the government’s high bank borrowing might slow down credit flow to the private sector.

He said that the industries were trying hard to keep existing jobs safe and the banks and industries should run handinhand in that case.

He demanded scrapping of the provision of advanced tax, saying that ‘Only Bangladesh collected AT from businesses but there is no guarantee how long we will live amid the pandemic.’

DCCI president Shams Mahmud said that more focus needed to be given on sourcing funds from external sources and reduce dependency on bank borrowing to mitigate the deficit budget.

He also suggested that the source tax for export-oriented sectors should be reduced to 0.25 per cent.

Shams emphasised restoration of the GSP facility Bangladesh enjoyed in the United States, eliminating non-tariff barriers with partners through strong diplomatic initiatives, creation of FTA and PTA with potential partners.

Chittagong Stock Exchange Ltd chairman Asif Ibrahim said that GDP-market capitalisation in Bangladesh only accounted for a mere 11.1 per cent which was not up to the expected level.

For long term project financing, an effective bond market would be a key player, he said.

Asif requested all the commercial banks to inject at least Tk 200 crore in the stock market in compliance with the directives of the Bangladesh Bank.

‘It is true, we need reforms in line with the present situation and the government is doing so,’ planning minister MA Mannan said.

Citing the issue of false COVID-19 test reports, he said that the achievement of the government could not be tarnished due to the wrongdoings of a few people.

The minister said that there had been problems in the beginning of the coronavirus outbreak but the government was back on track and now hospital beds and oxygen supply were available for patients.

Regarding governance in the financial sector, the minister said that good governance was a fruit of longterm output, and the government was on the right path.

Emphasising policy reforms, the minister stressed the need to look at policies adopted in the east for better regional gains.

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