Mashiur stresses export diversification, value addition to exportable items

Prime Minister’s Economic Affairs Adviser Mashiur Rahman Sunday stressed the need for export diversification and value addition to the exportable items.

The Adviser emphasized while addressing a seminar on “Bi-annual economic state and future outlook of Bangladesh economy: private sector perspective” as the chief guest organized by the Dhaka Chamber of Commerce and Industry (DCCI).

Mashiur Rahman said that the country’s economy has experienced fundamental changes during the last decade, reports BSS.

During this period private sector has also flourished remarkably, he said adding that policies should be formed considering the problems and prospects of the private sector.

“Consistent policies will expedite the private sector investment as well as foster Foreign Direct Investment (FDI),” he added.

The Adviser also termed the pharmaceutical and light engineering sectors as the most potential sectors for Bangladesh.

He said, “We’ve to functionalize the API Park as soon as possible…reforms are needed in the taxation system as still there are some problems and challenges. We should also tap the benefit of the huge potentials of the blue economy.”

DCCI president Ashraf Ahmed while presenting the key-note paper said that the long-term growth target of achieving a trillion dollar Smart economy requires concerted efforts to reduce the cost of doing business, improve ease of doing business, improve regulatory efficiency, install appropriate infrastructure, ensure energy security, improve logistics and finally ensure access to finance for the private sector.

He also emphasised on the product as well as market diversification and said that the private sector investment is targeted in FY2024 at 27.4% of GDP while it was 21.8% in FY2023. “Required policies considering the LDC graduation will expedite the private sector investment,” he added.

To facilitate the private sector more, Ashraf requested lower corporate tax, complete automation of the taxation system, increasing tax net, and reform of the SD and VAT Act.

As Non-Performing Loan (NPL) has an impact on increasing some intermediary costs for the private sector, he suggested reducing NPL. “Reducing the cost of doing business, uninterrupted energy supply at an affordable price, and logistic sector development will help the private sector for re-investment,” he added.

Later, he said that the CMSME sector needs not only access to finance but also access to technology to grow.

Chief Economist of Bangladesh Bank Md. Habibur Rahman said that due to global geo-political instability, the price of essentials has increased and the Central Bank has already taken necessary measures to tackle the situation.

He informed that Bangladesh Bank will introduce the Crawling Peg system to keep the exchange rate under control.

Habibur also said that the Central Bank has underscored a roadmap to bring NPL in the industrial sector down to 8% within the next 2 years. “Bangladesh Bank will maintain the contractionary monetary policy until the inflation comes down point to point 6%.”

DCCI former President Shams Mahmud said that for a sustainable future of the RMG sector, there is a need to have to have proactive policies.

He also said that to boost more private sector investment in the country, the government has to ensure energy at an affordable price and ensure uninterrupted gas supply to the industries.

Mahmud also said that after LDC graduation, all must look into expediting the local import substitute industries to be self-sufficient. He also proposed for rationalizing taxation system and continued special support for the CMSMEs.

Ashikur Rahman, Senior Economist, PRI said macroeconomic instability is not good for the private sector.

He also said that the tax-GDP ratio is not up to the expected level while it is hovering around 10%. He also stressed skills development and reforms in the financial sector.

Mohammad Yunus, Research Director, PRI said that there should be better coordination among the BEZA, BEPZA, and Economic Zones Authority to attract the FDI.

He said BSCIC’s industrial plots should be utilized a cluster basis.