Express (August 07, 2011)

Finance Minister AMA Muhith Saturday said political crisis and frequent calls for observance of 'hartals' (strike) are threatening to undo efforts for the country's economic progress.

He said Bangladesh will have to count a loss worth US$ 25 billion in the next one and a half years if a confrontational political situation prevails during the period of next eighteen months.

"We have only 18 months practically if we deduct 12 months, ahead of the next general election. Let's work for the next one and a half years and help the economy grow at a higher rate on a sustained basis," Muhith added.

The finance minister was addressing as the chief guest at a marathon discussion meeting with the country's leading business leaders on the overall state of the economy.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) organised the programme at its conference room in the city.

"We need at least the eighteen months to accelerate the pace of development works," he added.

"Until December in 2012, we need peace and political stability in the country," Mr Muhith said.

Mr. Muhith said a black shadow looms large following threats from the parties in opposition.

He said political instability is one of

the major hurdles on way to Bangladesh's becoming the eighth largest economies in Asia, after Indonesia. Asia's largest economy is that of China followed by that of Japan.

Electricity crisis, balance of payment (BoP) problem and political instability are three biggest risks facing the Bangladesh economy, Finance Minister AMA Muhith said at the discussion meeting.

For such risks, he said, the government is likely to face a 'black shadow' during the next two and a half years of its remaining part of the tenure under the periodic electoral cycle.

"All hopes and expectations hang on the political stability in the country. Let's work for the next one and half years, at least. We want to see the period as peaceful and trouble-free," Muhith told the discussion meeting on the country's overall economic condition.

The meeting was by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) with its president AK Azad in the chair.

Mr Muhith said the government will release the amount of cash incentive to the exporters this month.

The finance minister said the coordination among different segments of textile industry might solve their crisis to a large extent.

The finance minister finds discussions between and among political parties as the key to political stability and urged the opposition to return to parliament by shunning the path of boycott. "The culture of boycott culture is totally unacceptable."

Commerce Minister Faruk Khan addressed the discussion as the special guest.

Muhith said, "If we all start thinking of the next election right now, the country will miss the most valuable one and a half years when the wheel of economy should move forward with full pace amid an uninterrupted development process."

"We want peace and political stability until December 2012," the finance minister said urging all concerned to allow the government to work for, at least, people for four years, out of its five-year term.

Turning to recent progress in various sectors, Muhith credited three groups -- farmers, labourers and entrepreneurs -- for the country's development in many areas.

"Among the three groups, the farmers have creative confidence to adapt to modern technology," he said, adding that the government wants to move forward by uniting these three forces.

Apart from the three major risks, Muhith also identified budget deficit as another risk.

He expressed the hope that the government would overcome it by taking proper measures. "We'll have to ensure the proper use of foreign aid."

Responding to a criticism of quick rental power plants, he said the government did not have any alternative other than going for such plants to address the electricity crisis within a short period of time.

He said it was supposed to get 2500 megawatt of electricity following efforts taken in the last two and a half years and hoped that there would be no need for quick rental power plants after this period.

Muhith also admitted some problems that prevail in the textile sector and urged the textile owners to ensure better coordination among all sub-sectors of the textile industry.

About the capital market, he said the government is happy over the activities of the Securities and Exchange Commission (SEC) and termed the current market situation as stable.

Responding to a query from the floor, he said those who want to see an uptrend in the capital market every day are 'mad'.

Admitting traffic congestion as another problem, he said if the laws could be enforced properly, the jam could have been averted. "The traffic rule-breakers should be hanged."

Commerce Minister Faruk Khan found the country's economy as being on the right track and said: "The credit for this goes to the businessmen."

He, however, expressed concern over high lending rate of banks and suggested that the matter should seriously be looked into.

"We've to ensure more credit flow to the market to help accelerate the pace of development activities and strengthen the country's overall economy."

Underlining the need for political stability for higher economic growth performance, he said the opposition will also need to be serious to live itself up to its election manifesto.

He said boosting exports is needed to put the economy on a stronger footing.

Commenting on a criticism of the draft trade organization act, Mr Faruk Khan said the government will finalise the law, after discussions, with the business people.

The commerce minister said the state-owned Trading Corporation of Bangladesh will be strengthened further to effectively intervene in the market.

Commenting on the inflationary pressures, Mr Khan said Bangladesh's inflation is mainly caused by higher import costs.

The commerce minister said Bangladesh's export to India has surged significantly last year due to adoption of different measures by the government.

"Our export to India grew to US$ 512 million against $304 million," Mr Khan added.

He, however, urged the business community not to take recourse to measure that will constrain the supply, side of essential food items.

Transparency International, Bangladesh (TIB) Executive Director Dr Iftekharuzzaman, president of the Dhaka Chamber of Commerce & Industry (DCCI), Asif Ibrahim, president of Bangladesh Garments Manufacturers & Exporters Association (BGMEA) Siaful Islam Mohiuddin, president of Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) AKM Selim Osman, president of Bangladesh Textile Mills Association (BTMA) Jahangir Alamin, president of the Metropolitan Chamber of Commerce & Industry (MCCI), Dhaka president M Amjad Khan Chowdhury, president of MCCI, Chittagong Khalilur Rahman, FBCCI senior vice-president M Jasim Uddin and vice-president Mostafa Azad Chowdhury Babu, among others, attended the meeting.

Speaking on the occasion, FBCCI President AK Azad urged both the government and the opposition to ensure political stability in the country to ensure its steady economic progress.

He voiced concerns over high lending interest rate and the ongoing liquidity crisis in the banking sector, and urged the government to ensure electricity and gas supply for the industrial units.

"You don't need to borrow from banks. Give us gas and electricity. We will give you higher revenue income," he said.

Addressing the meeting, the FBCCI president suggested that the government should reduce its borrowings from the banking system to facilitate the private sector to have better access to credits.

He alleged that unloading of imported consignments from 11000 containers suffered due to the recent political agitational programmes.

He urged the parties in opposition to look for alternative programmes of action to ventilate their grievances.

Mr Azad urged both the ruling and opposition parties to act in concert for promoting political stability to help ensure uninterrupted production by business enterprises.

The chief of the FBCCI said high lending rate and liquidity crisis are also impeding the growth of the private sector.

Addressing the meeting, president of Bangladesh Textile Mills Association (BTMA) Mr Jahangir Alamin said the country's textile sector has been facing tough times following the implementation of new rules of origin criteria, set by the European Union (EU) in January this year.

The BTMA chief alleged that dumping policy being adopted by a section of relevant business in India is also adversely affecting the Bangladesh textile sector.

BGMEA president Shafiul Islam Mohiuddin said the export orders to Europe were down by 2.0-3.0 per cent in recent months. "Exports to Turkey have also declined following the enforcement of an anti-dumping policy by the government of Turkey."

President of Bangladesh Knitwear Manufacturers and Exporters Association Mr. Salim Osman said a single-digit lending rate for the manufacturing sector should be enforced in the country.

He said: "We need immediate loans to make payments of wages and bonuses to our workers and employees in the knitwear sector."

Representative of Bangladesh Association of Bank Kazi Akram Hossain claimed that the banks "are not facing any liquidity crisis."

Former FBCCI president Md Akram Hossain said everyday the economy is generating Tk 20-Tk 25 billion as undisclosed money. "The government should take steps for utilization of such undisclosed money in formal sectors of the economy."

Former Bangladesh Bank Governor Farash Uddin said Bangladesh needs more banks by poor bank-clients ratio.

He said in India and Pakistan the bank-client ratio is 1:15000 and 1:16000 respectively while in Bangladesh it is only 1:22000.

Former central bank governor said Bangladesh's market comprises some oligopolies.

"Those who are opposing the setting up of new banks are the members of such oligopolies."

Executive director of Transparency of Bangladesh Dr Iftekharuzzaman said: "Politics has turned into business and vice versa."

President of Metropolitan Chamber of Commerce and Industry (MCCI), Chittagong Mr. Khalilur Rahman said Dhaka-Chittagong highway should immediately be made a four-lane one for expediting the country's external trade.

FBCCI first vice president Md Jashim Uddin, Bangladesh Terry Towel Manufacturers and Exporters Association Colonel (retd.) M. Anis, Frozen Food Exporters Association president Kazi Shah Newaz, representative of Bangladesh Reconditioned Vehicles Importers & Dealers Association (BARVIDA) Md Sharif, president of Bangladesh Covered Van Association Mokbul Ahmed, president of Bangladesh Plastic Goods Manufacturers Association Md Shamim Ahmed addressed also took part in discussions on the occasion.