In need of a biz-friendly environment

A new chapter of democratic struggle was added to the country's history in the months of July and August this year through the sacrifices of students and mass people. Our business community will always work with the current interim government to make the sacrifice meaningful and fruitful.

Within just a month of assuming office by the interim government; led by Professor Dr Mahammad Yunus, our nation has already started reaping the benefits. An increase in remittance inflow, turnaround of the stock market, improvement in Bangladesh Bank reserves, reduction in fuel price, loan facility on easy terms for payment of salary of workers engaged in export industry, formation of banking commission to consolidate fragile bank operations, economic stability and formulating the White Paper on the country's economic condition are among the noteworthy measures initiated by the government. Some steps taken by the Bangladesh Bank, such as increasing the flow of credit to the export sector and easing import restrictions, are also commendable.

The export sector of Bangladesh not only earns foreign exchange for the country, but also employs a large number of people, keeping the wheels of the economy rolling. However, today the country's economy is under threat due to dishonest practices and financial irregularities of some unscrupulous businessmen. The business community wants the government to take strict legal actions against those dishonest businesses and their associates.

This government should create a conducive environment for carrying out business activities safely and responsibly. Right now, improving the law and order situation remains to be the number one priority. In order to create a business-friendly environment in the country, I would like to highlight some specific crucial issues on behalf of the business community, and seek the government's prompt intervention in this regard.

LAW AND ORDER SITUATION: Since the student uprising, there has been a big vacuum within the law enforcement agencies in the country, resulting in deterioration of law and order situation. Taking advantage of the situation, some miscreants are trying to create a state of anarchy within the country, which has plagued all our industries including exports. Our industrial areas are experiencing constant unrest at the instigation of outsiders who are not anyway related to the industry. Even the labour unions have given statement that they are not associated with such activities. These offenders are carrying out robbery, vandalism, arson and looting in industrial establishments. To date, more than 100 factories have been vandalised and 200 more have been subjected to forced closure due to such attacks. It is estimated that industries have uffered losses worth more than Tk 5,000 crores due to the prevailing situation.

With inadequate presence of industrial police and limited general police activities, the situation is far from being under control. As a result, our economic capacity has suffered greatly, which will directly reduce employment. We strongly appeal to the government immediately ensure 24-hour presence of the joint forces in all industrial areas.

About 70 million people are directly and indirectly employed in formal sectors, including readymade garments, medicine, food and agro-processing, leather and footwear, small and cottage industries, jute products, light engineering, and ICT.

If the wheels of the industrial sector are halted due to the unrest, a significant portion of this large section of the population could become unemployed, creating a social and economic uncertainty. An improvement in the overall situation has been observed in areas where the joint forces have been deployed. We believe that if such move is replicated in the entire industrial zones, the situation will improve soon.

DEVELOPMENT OF ICT SECTOR: Although the contribution of the information technology industry is relatively small in the economy of Bangladesh, the potential of this sector is enormous. Currently, more than 3 lakh talented young people are working in this industry. The information technology sector can make an important contribution to economic prosperity, especially with regard to creating employment. Presently, the export income from this sector is about one and a half billion dollars. Despite the immense potential of this sector, it has not been possible to achieve the desired success due to the lack of various policy measures. Therefore, apart from developing our technological infrastructure, we need to train the youth to transform them into a skilled workforce of the global standard. The private sector, especially those who are associated with the information technology sector, is keen to work together with the government in this aspect.

DEVELOPMENT OF THE INSURANCE SECTOR: I would like to bring to the kind notice of the government that the "Road Transport Act 2018" has been enacted by scrapping the former "Motor Vehicles Ordinance, 1983" Act. Due to the turbidity of the changed law, commercial and other vehicles are currently plying on the roads without any insurance and at the risk of peoples' lives - a phenomenon that is unheard of anywhere in the world. An urgent solution to this situation is crucial. In addition, a reform of the insurance industry is the call of the hour.

STABILITY OF THE FINANCIAL SECTOR: The present government has already taken several effective steps to eliminate irregularities and restore stability in the financial sector. The business community appreciates these prudent steps. It is important to bring back the money laundered abroad in the past. We hope that the government will carry out the necessary restructuring activities to bring stability to the financial sector, including the implementation of the autonomy of Bangladesh Bank. Increasing liquidity flow in banks is essential for all businesses, especially the SME sector. At the same time, there is a need to improve the balance of payments by relaxing import restrictions and increasing foreign current loans. People will be greatly relieved if the government adopts urgent measures to control inflation and take other policies including contraction of fiscal expenditure. We believe that some of the steps taken by the Bangladesh Bank will accrue benefits help tame inflation.

ENSURING UNINTERRUPTED ENERGY SUPPLY: There is no alternative to ensuring uninterrupted power and gas supply to keep production and services running in all industries. The economy of the country will remain active if all-important fuel imports are ensured. I would like to make an appeal to give preference to renewable energy and solar power generation over coal, gas and fuel oil based power plants. Besides, I would like to request adopting appropriate measures to extract our own gas and coal resources.

PROCESS OF REFORM: We are hearing that reforms will be initiated in various sections. This reform process should be universal. Depending on the sector, businessmen are also keen to get involved in this process of reformation and provide the necessary support.

ENHANCEMENT OF THE IMAGE OF THE COUNTRY: It is well known that all our economic activities were disrupted for several days due to the recent student uprising. During that period, foreign media, especially those of a neighbouring country, have spread various rumours about the torture and intimidation, which has created a crisis of trust among foreign investors and buyers, and even negatively impacted the existing investors in Bangladesh. As a result, the image of Bangladesh as a reliable sourcing destination is being eroded. This needs to be dealt with right now. At present, some important nations including USA, UK, Canada, Germany, and India have issued travel advisories while visiting Bangladesh, for which investors and buyers are hesitant to travel to Bangladesh. It is imperative that necessary top-level communication initiatives are taken to withdraw these travel advisories.

Due to the prevalent law and order situation, brands and buyers in the outside world are expressing adverse reaction to Bangladesh's export industry, a phenomenon that is further fueled by our rival countries. In absence of reliance, there are fears about receiving future work orders. Therefore, it is very important to develop an urgent and well-thought-out strategy to restore relationships with major export destinations and importers. In this regard, I recommend the formation of a task force under the leadership of Chief Adviser, with participation from concerned ministries and the private sector.

We have recently witnessed the release of 57 expatriate Bangladeshis living in the UAE following personal initiative of the CA. We believe that CA's image in the outside world will take Bangladesh further ahead.

We are focusing on a particularly important issue at this juncture. Bangladesh is going to become a middle income country in 2026. Eventually, the trade advantages we enjoy as an LDC will be phased out, and our industrial production and exports will face tough competition. Considering the current holistic economic status of the country, we, the business community, request the government to consider the stipulated timeframe of LDC Graduation.

Oour country has a large number of young manpower. They are the future of the country. In order to create adequate employment and economic growth opportunities for these young people, there is no alternative to strengthening and expanding the private sector.

We want an overhaul of the politically blessed business culture in Bangladesh. In addition, we are interested in initiating a new chapter of responsible business operation within the country's business community.

We the business community will move forward by working together with the cooperation of younger generation. We believe that their intellect, their philosophy and wisdom will present Bangladesh in a new dimension to international platforms.

However, there is a vested quarter, who are desperate to discredit the interim government by creating chaos and unrest within the society and the economy. We must resist this unholy alliance and counter it with full force.

Business as a whole have full trust and confidence in the interim government of Bangladesh headed by Professor Dr. Muhammad Yunus, which came into being as a consequence of student-led mass movement to create a "New Bangladesh". Businesses will work as a catalyst to realise the dream of our martyrs.

Mr Mahbubur Rahman is the President of ICC, Bangladesh.

The article is the edited version of the Key-note address delivered at the National Business Dialogue, jointly organised by ICC Bangladesh and 15 national trade organisations in Dhaka on September 12, 2024.