Dhaka Chamber of Commerce and Industry (DCCI) President Ashraf Ahmed said today (September 28) that the gas and electricity supply crisis, along with lack of bank loans, posed serious challenges to industrial operations in the first half of this year.
In order to sustain exports through continued production, he called for urgent efforts to strengthen law and order in the industrial sector to resolve these crises and restore confidence of entrepreneurs.
Mr. Ashraf Ahmed gave a keynote speech on the current situation of the private sector from January to June 2024 at a seminar titled “Two-Economy Status and Future Prospects of Bangladesh Economy: A Private Sector Perspective” organized by DCCI. He made these points at the time.
“There are still problems with gas and electricity supplies. If ongoing labor disputes and energy issues are not resolved and factories cannot operate continuously for at least four hours a day, exports will be hit hard,” he said. ” he said.
He said production was declining not only in large industries but also in micro, small and medium enterprises (MSMEs), adding that if it could not be stabilized, employment would be hit hard.
“Meanwhile, news is coming in that gas reserves are decreasing. However, positive changes will occur if nuclear power plant production is integrated into the supply system by the end of this year. To overcome this, we need immediate alternative measures,” said the DCCI Chairman.
He said labor disputes were occurring only in Ashulia. It’s now visible on the other side. In this situation, if you are not able to change the situation and restore trust, your investment will be adversely affected. Private sector investment growth has already stalled at around 24% for the past three to four years.
In his keynote speech, he talked about the importance of increasing the flow of credit to the private sector. This will increase domestic and foreign investment. Effective measures should be taken to continue exports through continued production of goods in order to increase the flow of foreign exchange.
About reform
According to the keynote report, the caretaker government has already initiated several reforms in financial reform. If properly implemented, these will have a positive effect on the economy. It may take some time. If governments can raise tax revenues now, their ability to repay existing global debt will increase. To this end, it is necessary to focus on revenue collection.
Bangladesh Bank is trying to curb inflation by raising interest rates, but it will take three to six months to see the effects. The DCCI president further recommended that the impact of reforms on 10-12 weaker banks should not affect the banking sector as a whole and that lending to industry and MSMEs should be maintained at normal levels.
Ashraf Ahmed said that while bank depositors are protected, borrowers, especially good borrowers, do not have the same protection. While large borrowers may be able to negotiate a change of bank, smaller borrowers do not have that option. Policies need to be developed to ensure that small borrowers are not adversely affected by banking problems.
We need to focus on good governance
KAS Murshid, economist and former director of the Bangladesh Institute of Development Studies, stressed the need to boost confidence in the private sector by strengthening transparency and accountability to address financial challenges.
He emphasized the need for new policies in the pricing process to ensure uninterrupted energy supply to industry.
“Right now, we need to focus not only on increasing GDP growth, but also on good governance, improving law and order, and advancing health and education.In addition, we need to focus on food security, stable energy supplies, “We will develop excellent human resources,” he added.
Professor Abu Yusuf of the Faculty of Development Studies at Dhaka University said, “The reform plan by the caretaker government has been formulated based on an estimate of the country’s population of 170 million people.The plan must be based on an analysis of the actual population.” I think that’s important.” numbers. ”
“Instead of focusing on GDP growth, we should focus on sectors with potential. For example, the leather sector has the potential to generate $10 billion in exports, but that requires proper planning,” he said. added.
He also said, “Recently, it has been observed that despite tariff cuts, there is little impact on product prices in the market. In this regard, we will strengthen the coordination between monetary policy, budgetary control and market regulation. There is a need.”
Moun Salim Al Mamun, Director (Research) of Bangladesh Bank, said that monetary policy and exchange rate stability are essential to reduce volatility in product supply chains. An essential part of the ongoing reform program is the implementation of financial sector reforms, which must ensure the participation of the private sector.
“Furthermore, the central bank has adopted contractionary monetary policy to protect low-income people in the country from the effects of inflation. Once inflation is contained to some extent, capital flows will increase again,” he said. did.
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