Package won't fulfill demands of affected sectors: Trade bodies

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FE Report
Country's leading trade bodies expressed Sunday their cautious reaction to the government's incentive package, saying that it would not fulfill the demands of the sectors said to be affected by the ongoing global recession.
"The government declared a cautious stimulus package and it would not fulfill the demands of any sector," said Federation of Bangladesh Chambers of Commerce and Industry president Annisul Huq.
"Budget allocations for agriculture and power are part of regular budget and it should not be included in the stimulus package," he said.
A stimulus package, usually offered by a government, is aimed at making a particular sector or sectors or the economy vibrant. But this time it is missing, he said.
Support for the three export sectors - jute, leather and frozen foods - would not benefit the businessmen much, he pointed out.
He, however, thanked the government for responding to the global crisis and suggested that it should develop a market crisis 'warning system' and be flexible in revising the measures.
"Most of the measures are just assurances and it needs to be more concrete," Mr Annisul Huq said.
He said a cut in interest rate or increased cash subsidy is more concrete than an assurance by merely saying "the government would consider the issue."
Ready-made garment and textile sectors did not get anything from the package as the government felt that statistics was still positive, he mentioned.
"But the fact is that export is slowing down and in the near future it will experience negative growth," he feared.
Spinning mills are facing a crisis as prices and the demand for their products are decreasing, the FBCCI president said.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also expressed their deep dismay over the stimulus package, alleging that it would not help them face the global recession.
In separate press conferences, the leaders of BGMEA and BKMEA alleged that the apparel sector did not get any financial or policy support from the government-announced incentive package.
Finance Minister AMA Muhith announced a total of Tk 4.5 billion package programme for the export-oriented sectors of frozen foods, leather goods and agricultural products. It also announced a financial package worth Tk 29.74 billion for agriculture, recapitalisation of agricultural loans, power sector and widening the social safety net.
Addressing a press conference, BGMEA president Abdus Salam Murshedy said the announcement created disappointment in the entire clothing sector. "It will lead to uncertainty and instability in the apparel sector," he added.
"How will we compete amid the global recession when our competing nations had declared financial packages much earlier?" Murshedy said.
He, however, urged the government to re-consider the packages as their export orders fell fast over the past three months.
"We are urging the government to form a sub-committee for the sector and reconsider our issues," Murshedy said.
Addressing the other press conference, BKMEA president Md Fazlul Hoque said the government had neglected the clothing sector through announcement of the 'unjustified' package, although the sub-sector has been experiencing low buying orders since January last.
Fazlul said: "How can agriculture get an allocation of Tk 15 billion amid the global recession? How is agriculture related with the financial turmoil?"
"As per our internal assessment, the buying orders are too poor. We apprehend the present growth of 5.0 per cent may not be sustained," he added.
BKMEA sources said orders for knit products dropped by around 15 per cent over the past three months.
Leaders of Bangladesh Textile Mills Association (BTMA) and Bangladesh Frozen Food Exporters Association (BFFEA) said the Tk 34.24 billion bailout package against the ongoing recession would not spur the affected sectors and it would bear little fruit.
"It will help neither the government nor the frozen food exporters," Kazi Belayet Hossain, immediate past president of the BFFEA told the FE.
The government failed to understand the basic problems of the frozen food exporters, he said.
"If we export we'll get subsidy but the main problem is we have lost Tk 4.0 billion due to the global recession and now we don't have the cash for export," he explained.
He said, "If the exporters cannot export, what would be the use of increasing the subsidy?"
BTMA chairman Abdul Hai Sarker said the government left out the sector, which has invested over Tk 400.00 billion and created jobs for about two million people.
"We expected the government would offer us some bailout measures, but we are totally deprived," he said.
There is a wrong perception of the economists as well as others that if a businessman asks for help, he only does it for keeping its profit intact, he said.
"It's an attitude problem as many of us are fighting for our existence," he added.