Levelling the playing field for local gas companies
Wednesday, 20 June 2007
LOCALLY-owned business of any description can ask for, and should get the privilege of, a level playing field if its rival establishment of foreign origin operating in the country in the same or an identical sphere gets additional official benefits in any form -- tax holiday or higher prices of their products sold to the government or to any of the state-owned organisations. Otherwise, any such business will be eventually squeezed on the home ground by pressure of the more advantaged rival foreign companies. Even if it is a question of survival of the fittest, the usual philosophy and rationale of the free economy, the home-grown business should get identical treatment in relation to that enjoyed by locally-operating rival foreign companies for the sake of fair competition. Any other argument, however intelligently punctuated or tempered with recurring adjectives, verbosity and rhetoric, is weak in substance, illogical and simply unacceptable.
Yet the Bangladeshi people have had to hear, and get surprised to know, the other day that three state-owned gas companies are having no official response to a prayer for partly creating a level playing field for them in relation to incentives being provided by the government to the IOCs. These companies have much earlier entered into a joint venture to develop the Begumganj gas field -- the kind of job done by locally operating international oil and gas companies (IOCs). The subject of their prayer, as reported in this paper last Sunday, is extension of the privilege of tax holiday, as enjoyed by the IOCs engaged in the same job of developing gas fields. According to the philosophy of fair competition, these local companies could also ask for the Petro Bangla to pledge to buy gas from them at the same price, as bought at from the IOCs.
As it appears from the said report, a procedural flaw might have resulted in no response to the particular prayer thus far. The IOCs enjoy the tax holiday benefit alongside a discriminatory sale price differential that favours them at the expense of considerable business interest of similar local companies. Apparently, they are receiving these additional benefits under a policy of the government -- presumably, the foreign investment policy that was crafted and approved long ago at the highest level of the government while there was no local competition. On emergence of such competition, the Energy and Mineral Resources Division could have sought a decision from the same authorities on the matter of extending similar benefits to the local gas-field developing companies. It could have explained to the authorities the importance of maintaining a level playing field for all and warned them about the inevitable negative implications of not offering these benefits to pertinent local companies. It could enclose, if required, the opinion on the matter of the Finance Division or the Internal Resources Division -- whichever is applicable, along with its submission carrying its own proposal.
On government procurement, the World Trade Organisation seeks to restrain governments, under the pluralistical agreement on this subject, from discriminating between local and foreign suppliers and sources of supplies. When this global guardian body of rules related to multilateral trade does it, why should the government in this country discriminate between local companies and their rival or rivals of foreign origin in respect of incentives in spite of the same nature of their enterprising? If the revenue consideration moulded this discriminatory attitude, yet one has to regard it as the outcome of short sight or utter foolishness, as it would adversely limit the prospect of growth of local gas-field development companies and affect the national interest. Here is a fit case for the Chief Adviser to decisively intervene in, at least for the sake of fairness in competition.
Yet the Bangladeshi people have had to hear, and get surprised to know, the other day that three state-owned gas companies are having no official response to a prayer for partly creating a level playing field for them in relation to incentives being provided by the government to the IOCs. These companies have much earlier entered into a joint venture to develop the Begumganj gas field -- the kind of job done by locally operating international oil and gas companies (IOCs). The subject of their prayer, as reported in this paper last Sunday, is extension of the privilege of tax holiday, as enjoyed by the IOCs engaged in the same job of developing gas fields. According to the philosophy of fair competition, these local companies could also ask for the Petro Bangla to pledge to buy gas from them at the same price, as bought at from the IOCs.
As it appears from the said report, a procedural flaw might have resulted in no response to the particular prayer thus far. The IOCs enjoy the tax holiday benefit alongside a discriminatory sale price differential that favours them at the expense of considerable business interest of similar local companies. Apparently, they are receiving these additional benefits under a policy of the government -- presumably, the foreign investment policy that was crafted and approved long ago at the highest level of the government while there was no local competition. On emergence of such competition, the Energy and Mineral Resources Division could have sought a decision from the same authorities on the matter of extending similar benefits to the local gas-field developing companies. It could have explained to the authorities the importance of maintaining a level playing field for all and warned them about the inevitable negative implications of not offering these benefits to pertinent local companies. It could enclose, if required, the opinion on the matter of the Finance Division or the Internal Resources Division -- whichever is applicable, along with its submission carrying its own proposal.
On government procurement, the World Trade Organisation seeks to restrain governments, under the pluralistical agreement on this subject, from discriminating between local and foreign suppliers and sources of supplies. When this global guardian body of rules related to multilateral trade does it, why should the government in this country discriminate between local companies and their rival or rivals of foreign origin in respect of incentives in spite of the same nature of their enterprising? If the revenue consideration moulded this discriminatory attitude, yet one has to regard it as the outcome of short sight or utter foolishness, as it would adversely limit the prospect of growth of local gas-field development companies and affect the national interest. Here is a fit case for the Chief Adviser to decisively intervene in, at least for the sake of fairness in competition.