Staff Reporter :
The country’s business arena is abuzz with hectic activities, with the trade bodies in Bangladesh chalking up an ambitious plan to transform the nation into a progressive, equity-based society in the wake of the mass uprising that forced the dictator Sheikh Hasina to fall and flee the country.
The comprehensive strategy emphasises fostering innovation, promoting economic growth, and enhancing social well-being.
However, the country continues to face challenges on the trade front, as it remains without the Generalised System of Preferences (GSP) benefit from the United States—a status it lost a decade ago.
Business leaders are hopeful that the recent appointment of Professor Muhammad Yunus as the chief adviser to the interim government might pave the way for the restoration of this crucial trade benefit, given his esteemed global reputation.
On Tuesday, key business leaders met with Finance and Commerce Advisor Salehuddin Ahmed at the Economic Relations Department in Sher-e-Bangla Nagar, Dhaka, to discuss the matter.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), expressed optimism following the meeting. “We have discussed this with the chief adviser.
Professor Yunus is well-known worldwide, and we hope his image can help us regain GSP benefits in the US,” Hatem stated.
Hatem also highlighted concerns regarding six banks that are requiring margins for opening Letters of Credit, a matter the adviser plans to address with the governor of Bangladesh Bank.
He further noted that issues related to factory security are being addressed and confidence among buyers is improving, partly due to the Chief Adviser’s involvement.
Meanwhile, the Dhaka Chamber of Commerce and Industry (DCCI) has urged the central bank to enhance credit flow to businesses and reassess the impact of rising interest rates on loan availability.
During a meeting with Bangladesh Bank Governor Ahsan H. Mansur on August 27th, DCCI President Ashraf Ahmed stressed the limitations of increasing interest rates as a means to control inflation.
“We also want inflation to be controlled. However, raising interest rates only works for a short period.
Inflation affects businesses as it increases costs, such as the need to raise wages for our workers.
We all need to make sacrifices to reduce inflation,” President Ashraf Ahmed remarked.
The DCCI also called for increased credit flow to the cottage, micro, small, and medium enterprises (CMSMEs) and discussed ways to simplify the process of securing foreign loans.
When questioned about the issue of bank looting and money laundering by dishonest businessmen, Ashraf Ahmed clarified, “We, the ordinary businessmen, did not loot the banks.
If someone embezzles bank money, ordinary borrowers like us have to bear the cost.”
He further emphasised the need to reduce the volume of non-performing loans, stating, “If we can reduce the amount of non-performing loans, the interest rate on bank loans will decrease.
We support the actions Bangladesh Bank is taking against those who have looted funds.”
Recently, Bangladesh Bank raised the policy interest rate by 50 basis points to 9 percent to control rising inflation. This decision came into effect on Tuesday.
Three months ago, on May 8th, the central bank raised the policy rate by 50 basis points to 8.5 percent.
The central bank has raised the policy rate by more than 400 basis points in two years to 8.5 percent, but inflation has shown no signs of cooling.
Annual inflation in Bangladesh rose to 9.73 percent in FY24, the highest since FY12, according to the Bangladesh Bureau of Statistics.
The trend has continued into the ongoing financial year, with it staying above 9.5 percent, hurting the poor and low-income groups by significantly eroding their purchasing power.
The CPI rose 1.94 basis points to 11.66 percent in July compared to the month prior.
MCCI
Smooth logistics, banking services and security in industries are the major issues needed to be addressed for revival of economic activities, stated the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka.
In its review of the economic situation in Bangladesh report for the April-June quarter, the trade body also stressed the need for overcoming the other economic challenges that include inflation, slowdown in external demand, weak remittance inflow, shortfall in revenue collection, slow public expenditure, depreciation of taka, and also a decline in foreign exchange reserves.
Unemployment and low investment are other challenges, MCCI said in the report published on Tuesday.
To overcome the challenges, the government took some decisive measures to address the economic fallout, it added.
The government also needs to take more actions to stabilise foreign exchange reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and protect small businesses, said the MCCI.