The government won't continue handing out subsidies and providing cheap money to businesses, says Finance Adviser Dr Salehuddin Ahmed as he looks to a competitive economy in Bangladesh.
Addressing a business meet Sunday in Dhaka, he also said the post-uprising interim government wants to leave a "footprint of reforms" before leaving office, indicating such hard reforms to be pushed through.
"One thing I very clearly want to say that gone are those days of subsidies, cheap money, low interest rate. These are not the signs of a competitive economy," he said at the discussion on 'Enhancing Saudi-Bangla Economic Enhancement', organised by the foreign ministry.
He said the interim government would not be able to complete the reform programmes as it will leave very soon as per the plan - within one and a half year or two.
The finance adviser also made it clear for the businesses not to expect the to do everything for them, saying: "They want confidence. They want assurance. They want support. They want all kinds of concessions."
Citing as an example the case of RMG industry, he criticised that the sector still seeks incentives despite starting its journey long ago.
Brushing aside apprehensions that the foreign buyers of apparel will withdraw from Bangladesh, Dr Salehuddin said leading global brands like GAP, Marks & Spencer and H&M assured him of staying here.
The development partners also are very positive about this government and have already committed US$ 1.6 billion recently, he said. "We're expecting another US$ 700 million soon."
Terming trade as the most important vehicle for economic development, the adviser stressed improving bilateral trade ties with countries like Saudi Arabia for a boost to the economy.
He also informed the audience that the government is reviewing the timeframe for the LDC graduation and is preparing for a soft transition by creating an enabling environment for the businesses and investors.
In this context, he recalled how the world-renowned companies like Saudi Aramco and Korea's Samsung had not been given due importance by the previous regime, forcing them to move to other countries.
He underscored correcting wrong policies to ensure proper investment climate, saying that the challenges in this regard are formidable but also surmountable.
Addressing the programme Foreign Adviser Touhid Hossain said the present government is committed to making things easier for investors while working on creating a better atmosphere to welcome entrepreneurs.
He underscored the need for developing skills of people before sending them to countries like the KSA as, he said, the same number of people can make much greater income and contribute much more to the country if they are imparted necessary training.
Foreign Secretary Md Jashim Uddin, who presided over the meeting, said discussions contribute to enhancing bilateral engagement. Secretary (East) of the foreign ministry Nazrul Islam made the welcome remarks.
Saudi Ambassador in Dhaka Essa Yousef Alduhailan stressed the need for addressing challenges such as logistics bottlenecks and tariff barriers as outlined in the report presented at the meeting.
"I also take this opportunity to reaffirm the kingdom's unwavering commitment to supporting Bangladesh's development aspiration and strengthening our partnership for shared prosperity," he said.
"Actually, the Saudi-Bangladesh relationship is a multidimensional relationship," he said, adding that Saudi Arabia will always stand beside and support Bangladesh's 'critical journey' to become a developed country.
He informed that from 2020 to the end of 2023 more than 30 high-level visits had taken place, including ministerial visits and delegations.
"Over 160 Bangladeshi businessmen have visited Saudi Arabia to explore potential opportunities, with significant discussions on bilateral trade and investment."
Expressing his government's commitment to accommodating skilled workers from Bangladesh, he said that it will provide significant economic benefits to Bangladesh.
While presenting the report, Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said that as Saudi Arabia looks for new opportunities, Bangladesh presents several potential sectors for investment, including green energy, fertiliser, electronic manufacturing, infrastructure and logistics, petroleum refining and petrochemical products, tourism and hospitality, education and skills development, shipping lines, and construction.
These sectors offer promising avenues for Saudi Arabia to diversify its investment portfolio while contributing to the economic growth and development of Bangladesh, he added.
"Saudi Arabia is the destination for roughly 36 per cent of total overseas employment for Bangladesh and the cumulative number of people leaving for KSA has roughly doubled since 2016."
Saudi Arabia has long ranked the largest origin of official remittances to Bangladesh and it is among the 7th largest recipients of remittances with higher employment from KSA.
These substantial inflows from key countries highlight the critical role of the Bangladeshi diaspora in bolstering the national economy, said Mr Reaz, emphasising the importance of remittances for household incomes and overall economic stability.
The economist recommended improvement in the regulatory environment for businesses through modernising archaic laws, including the Companies Act, the Bankruptcy Act, and tax policies.
He also suggested strengthening contract enforcement (ADR), faster disposal of commercial cases, business taxation, and strengthening regulatory governance through the introduction of systematic tools such as RIA.
Strengthening export-competitiveness through broad-based Global Value Chain capabilities is also suggested in the report.
Also recommended are reducing average rates of protection and harmonising tariff schedules across all intermediate and final goods, adopting a national environmental-and social-compliance framework, and efficient trade facilitation.
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