Inefficiencies push costs onto consumers
Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun has urged the country to gradually move away from long-standing protectionist policies and focus on policy execution, institutional coordination, and energy security to sustain investment and employment growth.
Speaking at a roundtable discussion on “Trade Policy, Industrial Protection, Investment Impacts, and Consumer Welfare,” organised by the Policy Research Institute (PRI) in Dhaka on Monday, Ashik said there is growing consensus that industrial protection cannot continue indefinitely as Bangladesh prepares to face the challenges of graduating from the least developed country (LDC) category.
He highlighted that inefficiencies across the supply chain ultimately increase costs for consumers, not just high tariffs.
“By the time products reach consumers, many additional costs and problems are added in the middle,” he said, citing logistics bottlenecks, port inefficiencies, and rent-seeking practices at various stages of business operations.
According to Ashik, the main challenge for Bangladesh lies not in policy formulation but in implementation.
“At the principle level, policies already exist to address many of these problems, but there is a lack of execution,” he said, pointing to difficulties faced by investors in importing raw materials, clearing ports, and transporting goods efficiently.
He noted that the government’s focus is shifting from achieving mere economic growth to ensuring sustainable growth driven by employment generation.
Addressing concerns about potential bias towards foreign investors, Ashik rejected claims that BIDA prioritises overseas investment over local businesses.
“BIDA’s role is to advocate within the government for both domestic and foreign investors,” he said, emphasising that domestic entrepreneurs still account for the majority of investment in Bangladesh.
While foreign direct investment brings technology transfer and operational efficiency, domestic investment remains the backbone of the economy, he added.
The BIDA chairman also revealed that investment promotion agencies have submitted 46 recommendations to the revenue authorities, including 19 proposals related to deregulation.
Among these is a proposed structured VAT slab system aimed at encouraging local value addition and reducing policy uncertainty for investors.
Ashik identified the ongoing energy crisis as a major barrier to attracting both local and foreign investment.
“Until we solve the energy problem, it will be difficult for local and foreign investors to fully believe in the Bangladesh growth story,” he said.
The discussion, held at the PRI office in Banani, was chaired by PRI Chairman Zaidi Sattar.
Other panelists included Consumer Association of Bangladesh President AHM Shafiquzzaman, former National Board of Revenue member Md Farid Uddin, Dhaka Chamber of Commerce and Industry President Taskeen Ahmed, and policy expert M Masrur Reaz.
