Why private sector as scapegoat always?
Saturday, 6 October 2007
Any sensible person, on surveying the conditions for the private sector in Bangladesh, would realise that the monetary and fiscal policies of the country are yet to be geared up adequately in the interest of its development under the private sector.
Successive elected governments borrowed from the banking system and the public through savings certificates or bonds. This widened the fiscal deficit, undermining efforts to achieve better fiscal and monetary discipline. The private sector suffered from shortage of funds to take on entrepreneurial activities while precious resources were diverted to unproductive administrative expenditures of the government.
Systematic policies were not operative to channelise funds to the private sector to stimulate it. In many countries, the entrepreneurs are allowed the vital level playing field. They are not spoon-fed but government policies at least try to keep them competitive. This means that they are given vital supports in areas where they deserve such supports.
But our entrepreneurs here are sweepingly or blatantly accused of defaulting on loans when the government's corporations and the state owned enterprises (SOEs) under them are the worst defaulters in their payments. Why are then the private sector entrepreneurs singled out for blame ? Law, to be fair, should apply equally to all.
Government officials get promoted though the bodies they serve are too burdened with debts not repaid, whereas private sector entrepreneurs are dragged to court in many cases for defaulting on loans due to adverse business conditions.
Allegations are too frequently heard that the entrepreneurs take money from the banking system not to return the same. But it will be wrong to state this in generalised way to describe the real estate of affairs concerning the country's businesses. Where is the environment for the entrepreneurs to successfully engage in business, make a good enough profit and service the loan at high rate of interest?
Besides the interest rates that are charged on loans being unrealistically high, entrepreneurs are plagued by skewed tariffs that help the sale of imported products and not their domestic equivalents, insufficient and unreliable power supply, poor infrastructures, etc. They were earlier subjected to regular extortion activities, too.
Therefore, an enabling environment must be created first for the entrepreneurs. They are not to be always made the whipping boys, unfairly. Only mud-slinging at them will not help.
Murad Reza
Eskaton, Dhaka
Successive elected governments borrowed from the banking system and the public through savings certificates or bonds. This widened the fiscal deficit, undermining efforts to achieve better fiscal and monetary discipline. The private sector suffered from shortage of funds to take on entrepreneurial activities while precious resources were diverted to unproductive administrative expenditures of the government.
Systematic policies were not operative to channelise funds to the private sector to stimulate it. In many countries, the entrepreneurs are allowed the vital level playing field. They are not spoon-fed but government policies at least try to keep them competitive. This means that they are given vital supports in areas where they deserve such supports.
But our entrepreneurs here are sweepingly or blatantly accused of defaulting on loans when the government's corporations and the state owned enterprises (SOEs) under them are the worst defaulters in their payments. Why are then the private sector entrepreneurs singled out for blame ? Law, to be fair, should apply equally to all.
Government officials get promoted though the bodies they serve are too burdened with debts not repaid, whereas private sector entrepreneurs are dragged to court in many cases for defaulting on loans due to adverse business conditions.
Allegations are too frequently heard that the entrepreneurs take money from the banking system not to return the same. But it will be wrong to state this in generalised way to describe the real estate of affairs concerning the country's businesses. Where is the environment for the entrepreneurs to successfully engage in business, make a good enough profit and service the loan at high rate of interest?
Besides the interest rates that are charged on loans being unrealistically high, entrepreneurs are plagued by skewed tariffs that help the sale of imported products and not their domestic equivalents, insufficient and unreliable power supply, poor infrastructures, etc. They were earlier subjected to regular extortion activities, too.
Therefore, an enabling environment must be created first for the entrepreneurs. They are not to be always made the whipping boys, unfairly. Only mud-slinging at them will not help.
Murad Reza
Eskaton, Dhaka