Thrust to be put on infrastructure
Tuesday, 24 March 2009
Sahidul Haque
BANGLADESH is otherwise known to be one of the cheapest places for doing business in Asia. However, this recognition as the lowest cost investment decision ought not to breed any self satisfaction among the policy planners. For, a short term advantage acquired mainly from hiring workers cheaply, is no guarantee of its continuing in the medium- and the longer-terms.
It is important to search for durable ways and means of enhancing the competitiveness on a sustainable basis. This will require making good progress in other very important areas such as infrastructure, and making it efficient is pivotal for the economy. Chittagong port, that handles the greater part of the country's external trade, is a case in point here. The newly elected government should take up careful programmes for developing the country's infrastructural facilities on a priority basis. It should attempt to build an expressway between Dhaka and Chittagong for exclusive use by businesses. The building of it should very significantly reduce transportation costs and time adding to competitiveness of various businesses. There is also pressing need to build inland container depots (ICDs) along the way between Dhaka and Chittagong for the faster movement and handling of commercial cargoes in both directions. Similar attention should be paid to upgrade the functioning of the railways, the air terminals and waterways.
There is a great need to boost investment in infrastructure related to diverse sectors specially in the tourism and communication sectors. The government should increase its own investment in infrastructure and facilitate private sector participation in infrastructure building, operation and maintenance. Investors, both local and foreign ones, are likely to invest more in Bangladesh on seeing first class infrastructures depending on which they would be able to run their enterprises cost-efficiently. Thus, infrastructure building should be seen as very important for improving the competitiveness of the economy in the longer run.
The new government should also consider maintaining of a policy framework over the long haul that would be seen as investment-friendly. Fiscal and monetary measures applied on long term basis can be either inducement for investment, or, the same may be interpreted as hostile towards investors. Investors consider the corporate tax they have to pay in Bangladesh as specially heavy. A further reduction in the tax, therefore, may be considered along with responding to the suggestion of continuing with tax holiday facility for many industries long into the future. A declaration to this effect is likely to inspire many potential entrepreneurs to invest in industries without hesitation.
BANGLADESH is otherwise known to be one of the cheapest places for doing business in Asia. However, this recognition as the lowest cost investment decision ought not to breed any self satisfaction among the policy planners. For, a short term advantage acquired mainly from hiring workers cheaply, is no guarantee of its continuing in the medium- and the longer-terms.
It is important to search for durable ways and means of enhancing the competitiveness on a sustainable basis. This will require making good progress in other very important areas such as infrastructure, and making it efficient is pivotal for the economy. Chittagong port, that handles the greater part of the country's external trade, is a case in point here. The newly elected government should take up careful programmes for developing the country's infrastructural facilities on a priority basis. It should attempt to build an expressway between Dhaka and Chittagong for exclusive use by businesses. The building of it should very significantly reduce transportation costs and time adding to competitiveness of various businesses. There is also pressing need to build inland container depots (ICDs) along the way between Dhaka and Chittagong for the faster movement and handling of commercial cargoes in both directions. Similar attention should be paid to upgrade the functioning of the railways, the air terminals and waterways.
There is a great need to boost investment in infrastructure related to diverse sectors specially in the tourism and communication sectors. The government should increase its own investment in infrastructure and facilitate private sector participation in infrastructure building, operation and maintenance. Investors, both local and foreign ones, are likely to invest more in Bangladesh on seeing first class infrastructures depending on which they would be able to run their enterprises cost-efficiently. Thus, infrastructure building should be seen as very important for improving the competitiveness of the economy in the longer run.
The new government should also consider maintaining of a policy framework over the long haul that would be seen as investment-friendly. Fiscal and monetary measures applied on long term basis can be either inducement for investment, or, the same may be interpreted as hostile towards investors. Investors consider the corporate tax they have to pay in Bangladesh as specially heavy. A further reduction in the tax, therefore, may be considered along with responding to the suggestion of continuing with tax holiday facility for many industries long into the future. A declaration to this effect is likely to inspire many potential entrepreneurs to invest in industries without hesitation.