Maintain liberal import policy to keep prices under control : ICCB

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FE Report
The International Chamber of Commerce (ICC) Bangladesh has urged the government to look into the issues of spiraling price hike of essentials and increasing inflation with due attention.
"The unabated price rise has put under threat the impressive achievements made after January 11, 2007. The government should, therefore, look into the matter immediately and continue to maintain a liberal import policy as a short-term measure, particularly for food grain import to keep prices under control," the ICCB said in the editorial of its Quarterly News Bulletin released Tuesday.
It also mentioned that to win the confidence of the business community in particular and the public in general is a challenge for the government.
"Businessmen should be allowed to manage their affairs with ease and make their own investment decisions. On the basis of faced realities or perceived ones, it is not that businesses want anti-corruption drive to stop, but they expect this to be done with due care and, of course, without creating a panic situation and thereby impacting the entire business activities of the country," the ICCB commented.
It said Bangladesh economy is now passing through a difficult time with enormous challenges ahead. The spiraling price-hike of essentials and increasing inflation are currently the biggest pressure on the economy.
"No doubt, the present government took office with a strong popular support to hold a credible national election, improve law and order, fight corruption and strengthen governance.
"Almost cent per cent public acceptance of this government with full respect at the beginning is now perceived to be on the decline in the public mind mostly due to spiralling prices of food and essential commodities even though the government has limited option to intervene in a free market economy, except fiscal intervention and law and order situation, which of course it is doing," the ICCB said.
Welcoming the current reform measures, including drive against rampant corruption, the ICCB said it will not yield immediate results. The benefits will come in mid-and long-term. But the steps now being taken would definitely contribute to forming a strong base for the future economy.
Notwithstanding a number of internal and external factors afflicting the country's economy, impressive disbursement of term loans during the last fiscal has led to moderately high growth in the manufacturing sector. Robust export growth, buoyant inflow of remittance and improving port situation has signalled strengthened performance of the external sector.
The ICCB said invigorated capital market and increasingly competitive telecom market stood out as positive outcomes of the economy in FY2007.
The balance of payment situation of the country is also in a very good position. Official remittance from the expatriates in the preceding year has reached about US$6.0 billion, which has certainly provided a big cushion to the Balance of Payment (BoP) situation in FY07, it added.
On the other hand, narrow export basket of Bangladesh is likely to face heightened competition as the EU restrictions on RMG export from China will be withdrawn from day 1 of 2008 while US restrictions will go from January 1, 2009. In this new competitive scenario, sustaining the current high export growth will be an uphill task in coming years. Although the annual export earnings have already reached $12 billion and expected to reach US$ 16 billion in the next two years, the ICCB said.
It said the government's target of 7.0 per cent GDP (gross domestic product) for the current fiscal could be possible only if the three major components of GDP, viz. agriculture, industry and service sectors enhance their contribution further to attain this optimistic target.