JS body for additional Tk 1.0 against each dollar of exporters, expats

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Doulot Akter Mala
A parliamentary standing committee recently suggested the government to offer an additional Tk 1.0 against each dollar fetched by exporters and expatriate workers as an incentive to boost the country's foreign exchange earnings, officials said.
However, economists have criticised the move saying such incentive should not be given to particular sectors, and that it will undermine the free market economic policy.
The parliamentary standing committee on the finance ministry at a recent meeting, chaired by AHM Mustafa Kamal, decided to request the ministry to allow the cash incentives against dollar earned by the two booming sectors, working paper of the committee report said.
The government will need nearly Tk 20 billion a year to meet such requirement, standing committee chief Kamal said in the meeting.
He said: "Currently, 72 garment factories are closed and remittance flow in July slowed down."
"I believe the benefit will certainly over weigh the sacrifice," he said in the meeting expecting an increase in export-earning and remittance after introduction of the measure.
He hoped that remittance from Bangladeshi expatriate workers would rise by $ 2.0 billion a year if such incentive was given.
Last year, the country received $9.67 billion as remittance and $15.56 billion from merchandise export.
Opposing the suggestion Bangladesh Institute of Development Studies (BIDS) Director General (DG) Mustafa Kamal Mujeri said: "It will be a duel-policy of government. It must stay away from this."
"I don't think it is a logical decision. There should be equal exchange rates for all," Mujeri said, who is the former chief economist of Bangladesh Bank.
There was a system like that in 70-80s, but the country has phased out from this as it contradicts with the free-market policy, he said.
The government should ensure a level-playing field for all rather than facilitating any particular sector, he added.
"Our economy should run with the reality. Such measures will make people dependent, he said.
Ahsan H Mansur, executive director at the research firm Policy Research Institute (PRI), also expressed the similar views saying that there are many ways to give support or encourage exporters and remitters.
Offering cash incentives is not the right way, he said adding: "The country's economy is moving in a right direction. We should not go backward."
The government can offer loan facilities at 15 per cent interest rate against job letters of remitters if it wants to help them, he said adding that presently remitters are taking loan at 50-60 per cent interest mortgaging their land or house property as collateral.