Decision on stimulus package for apparel sector likely by Oct

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FE Report
The government is likely to announce a stimulus package for the apparel sector in end-October to help the latter weather the impact of the global economic meltdown.
Finance Minister AMA Muhith briefing the newsmen Wednesday in Dhaka said the government would give its decision on the disbursement of stimulus package within a month after examining the RMG sector's export situation.
"We've formed a committee to determine the real effect of the meltdown on the RMG sector. The committee will recommend the necessary support to it. It would complete its work within a month," Muhith told reporters emerging from the meeting of the national taskforce on global recession.
The government had earlier formed a high-powered taskforce, headed by the finance minister on recession. It held a meeting Wednesday to assess the impact of the global economic meltdown on the country's economy and suggest possible measures to address the same.
Muhith said: "We will consider how we can offer the stimulus packages to the garment industry. Product and market diversification by the apparel sector would get special consideration for the fiscal benefit."
"The RMG is the largest provider of employment in the industries sector. About 3.0 million people work with this industry. It also earns the largest amount of foreign exchange through exports. So, we cannot ignore this sector," he said.
The national taskforce, formed in March last, met for the second time Wednesday as the country's economy, especially the major export-oriented sectors, has been hard hit by the second round impact of the latest global economic gloom.
The finance minister said: "The incentive packages of the government would continue. It will be disbursed on the basis of the true impact of the global financial fallout."
Md. Fazlul Hoque, president of the country's apex knitwear manufacturers' platform -BKMEA, said: "We are happy that the government has recognised RMG as an affected sector. We hope the newly formed committee would complete its work within a month and government would offer adequate support to us."
Echoing similar voice, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Salam Murshedy said: There has been a fruitful discussion today, We are hopeful about receiving an announcement form the government on the stimulus package within a month."
AMA Muhith said the taskforce committee members have discussed more about the economic situation than the meltdown. "There were suggestions about the ways of boosting our economy", he said.
"The members of the taskforce maintained that administrative inefficiency relating to the implementation of the development projects was a major obstacle to fight the impact of global recession," he said.
"So we have decided to give highest attention to developing infrastructures, especially in areas of energy and power, which are major impediments to new investment, the finance minister said.
Shipbuilding sector would get special attention of the government to help build it as a competitive industry, he said.
The members suggested highlighting the country's success in fighting the effects of the meltdown to help brighten its image in the outside world, Muhith said.
Economic adviser Mashiur Rahman said the major problem of the country at this moment is power and energy shortage that is harming the economy more than the global recession. "We have to overcome this problem together," he added.
Commerce minister Faruq Khan said: "We are not satisfied over the 11 per cent export growth last financial year. It needs to go further up. So, some policy and infrastructural supports to the manufacturing industries would have to be augmented."
The government has allocated Tk 50 billion in the current national budget to support the country's recession-hit sectors, especially the export-oriented industries.