FBCCI demands crisis fund to help out recession-hit plants
Sunday, 26 April 2009
FE Report
The country's apex chamber Saturday demanded creation of a special 'financial crisis mitigation fund' and soft loan facilities to fight off the effect of global recession on local industry.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) urged the government to create the fund through 'block allocation from internal resources' and use it to extend loan to the affected companies on a flat six per cent interest rate.
"We want the fund as early as possible as we are facing an uphill task ahead. We haven't said how big the fund should be. But obviously, it should be as big as possible," FBCCI president Annisul Huq told reporters.
"We will request to the government to negotiate with the World Bank and the IMF (International Monetary Fund) to seek emergency fund for the affected industrial units."
The FBCCI, which earlier sought a bailout package worth Tk 60 billion for local industries, would submit its full demand to the finance minister this week, detailing its demand and challenges facing the sectors.
Huq said the fund would be operational till the end of 2010 and would be run by commercial banks under direct supervision from the central bank.
The affected companies receiving loans from the fund would pay off their debt from 2011 through 2016.
FBCCI president said they are against wholesale financing of companies, proposing instead formation of a taskforce representing officials from Bangladesh Bank, FBCCI and other industrial groupings to identify the hard hit companies.
"We don't want any misuse of the fund. Rather our aim is to help out the companies, which have indeed been affected by the global economic recession," he said.
The apex chamber also demanded creation of 'Bangladesh Power Fund' like the one created in India in 2004, to tackle the country's growing electricity crisis.
The fund would be formed by issuing a seven-year maturity bond, tagged with seven per cent interest rate, Huq said, adding untaxed and undisclosed money of local and foreign investors should be allowed to buy the bond.
"India has greatly reduced its power crisis by building a power fund worth Rupees 10,000 billion five years back. We think Bangladesh should have a similar fund to mitigate the power crisis," he said.
The FBCCI also demanded exemption of import duties on coal, gas, diesel and Liquefied Petroleum Gas (LPG) and immediate building of a number of small and captive power plants to deal with the electricity crisis.
The federation has also sought reinstatement of some provisions in the income tax laws that would allow companies and individuals to invest untaxed money in manufacturing sectors.
The country's apex chamber Saturday demanded creation of a special 'financial crisis mitigation fund' and soft loan facilities to fight off the effect of global recession on local industry.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) urged the government to create the fund through 'block allocation from internal resources' and use it to extend loan to the affected companies on a flat six per cent interest rate.
"We want the fund as early as possible as we are facing an uphill task ahead. We haven't said how big the fund should be. But obviously, it should be as big as possible," FBCCI president Annisul Huq told reporters.
"We will request to the government to negotiate with the World Bank and the IMF (International Monetary Fund) to seek emergency fund for the affected industrial units."
The FBCCI, which earlier sought a bailout package worth Tk 60 billion for local industries, would submit its full demand to the finance minister this week, detailing its demand and challenges facing the sectors.
Huq said the fund would be operational till the end of 2010 and would be run by commercial banks under direct supervision from the central bank.
The affected companies receiving loans from the fund would pay off their debt from 2011 through 2016.
FBCCI president said they are against wholesale financing of companies, proposing instead formation of a taskforce representing officials from Bangladesh Bank, FBCCI and other industrial groupings to identify the hard hit companies.
"We don't want any misuse of the fund. Rather our aim is to help out the companies, which have indeed been affected by the global economic recession," he said.
The apex chamber also demanded creation of 'Bangladesh Power Fund' like the one created in India in 2004, to tackle the country's growing electricity crisis.
The fund would be formed by issuing a seven-year maturity bond, tagged with seven per cent interest rate, Huq said, adding untaxed and undisclosed money of local and foreign investors should be allowed to buy the bond.
"India has greatly reduced its power crisis by building a power fund worth Rupees 10,000 billion five years back. We think Bangladesh should have a similar fund to mitigate the power crisis," he said.
The FBCCI also demanded exemption of import duties on coal, gas, diesel and Liquefied Petroleum Gas (LPG) and immediate building of a number of small and captive power plants to deal with the electricity crisis.
The federation has also sought reinstatement of some provisions in the income tax laws that would allow companies and individuals to invest untaxed money in manufacturing sectors.