Thrust on devising mechanism for Taka\\\'s gradual depreciation

FE Report
Speakers at a discussion meeting underscored the need for devising a mechanism for gradual depreciation of Taka, and formation of a sovereign fund with a portion of the forex reserve to help boost investment, trade and exports.
They also called for efficient investment to gain optimum benefit to help graduate the country to middle-income status within the stipulated period.
The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) organised the programme titled "Policy Action for Boosting Investment, Trade and Exports in Bangladesh" at a city hotel Wednesday with its president Syed Nasim Manzur in the chair.
Principal secretary to the Prime Minister's Office Abul Kalam Azad attended the discussion as the chief guest while senior secretary of Ministry of Finance Mahbub Ahmed, and senior secretary of ministry of commerce Hedayetullah Al Mamoon attended it as the special guests.
While presenting the keynote speech, executive director of Policy Research Institute (PRI) of Bangladesh Dr Ahsan H Mansur addressed the issues of how the country's climbing foreign exchange reserves could be used to stimulate growth.
He identified financial accounts as the major reason for jump in reserves and also explained how the Real Effective Exchange Rate (REER) in Bangladesh has appreciated by almost 25 per cent until FY '15.
Mr Mansur said the appreciation is seriously undermining Bangladesh's export competitiveness to the competitor countries where local currency is depreciating.
He advocated for an engineered steady depreciation of Taka, gradual non-reversible liberalisation of capital account, and setting aside of a part of the reserves for a sovereign fund that will be used within the country for the second generation.
Mr Mansur also highlighted the importance of containing inflation for bringing down interest rates further, and further rationalising the returns on national saving scheme since 90 per cent of such instruments are held by 10 per cent people.
Professor of Economics at Dhaka University Dr Selim Raihan, while presenting his keynote paper advocated for a paradigm shift in investment regime in Bangladesh.
Terming it as 'second generation reform' in three areas-policy, infrastructure, and institutional-Dr Raihan focused on needed efficiency gains from investments to fulfill the national goal of reaching the status of middle income country by 2021.
The country's key business leaders including former president of the Bangladesh Textile Mills Association A Matin Chowdhury, Syed S Kaiser Kabir of Renata Ltd, Arif Dowla of ACI Ltd, Rubana Huq of Mohammadi Group, Saiful Islam of Picard Bangladesh Ltd, Habibullah N Karim of Technohaven Company Ltd, Kamran T Rahman of Pubali Jute Mills Ltd, and former managing director of Titas Gas Ltd Aziz Khan also spoke on the occasion.
The focused issues on nine major industrial sectors were readymade garments, textiles, pharmaceuticals, leather and leather products, information technology, shipbuilding, agro-processing, jute and jute goods, and power and gas.
The speakers focused on major areas in respective sectors in areas of productivity, competitiveness, policy support, innovation, research and development, vertical as well as horizontal investment, health and safety issues, fair wages, low-cost housing for workers, and image building.
They came up with specific recommendations in short and intermediate terms.
The discussion was also attended by a large number of members from business community, civil society and think-tanks including former governor Dr Mohammad Farashuddin and PRI chairman Dr Zaidi Sattar.
Besides, former president of the Federation of Bangladesh Chambers of Commerce and Industry A K Azad, eminent industrialist and former adviser to caretaker government Syed Manzur Elahi, chairman of ACI Ltd M Anis Ud Dowla, and former MCCI president Laila Rahman Kabir, were present, among others, during the discussion.
The senior secretaries of the government assured to take the issues into consideration and address those in an appropriate manner.
syful-islam@outlook.com