RMG exporters see stimulus package meagre, unrealistic

FE Team | Published: November 26, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
With the government announced Tk 10 billion stimulus package for the apparel sector Wednesday, the country's ready-made garment (RMG) exporters said they found it meagre while unrealistic conditions are tagged with it.
At hurriedly organised press meets, held separately, the leaders of BGMEA and BKMEA said the small exporters would be unable to harvest any benefit of the stimulus package due to the proposed conditions.
"We are greatly confused over the conditions tagged in the clauses of the package, which offers cash incentives for small and medium-sized exporters," said BKMEA president Md Fazlul Hoque at a press meet in his office.
He said according to the present conditions set by the government, the exporters would get 5.0 per cent cash incentive, only if their exports of this fiscal (2009-10) are higher than those of the previous fiscal (2008-09).
Earlier, it had been decided that exporters who had exported $3.5 million in the 2008-09 fiscal would get incentive.
The BKMEA president also said the government had to solve gas supply problem in the textile and garment industries, and fix a deadline when they would get adequate and uninterrupted gas supply.
Hoque said new investments are being halted, while many factories cannot utilise their full production capacity. As a result their production cost is rising.
He said: "If the gas problem is not solved, no package would be fruitful for the textile sector."
At another press meet at the BGMEA office, its president Abdus Salam Murshedy, critical on the package statement, demanded that the government should make the support measures friendlier for them.
"When it is a question of survival, it is really silly that the bureaucrats, who have written the package statement, have perceived that business of the small exporters will grow and they would get incentive on extra export," Murshedy said.
Mureshedy also lamented that the package raised the ceiling of Export Development Fund from $1.5 million to $10 million, but interest rate of the fund was also raised to Libor plus 2.5 per cent from the previously demanded 1.5 per cent.
Besides, given the impact and risk of recession on Bangladesh's RMG sector the proposed package is too inadequate and inconvenient, he added.
He, however, praised the government, as it had made provision of rescheduling the loans of the recession-hit industries.