Kazi Zahidul Hasan :
“The energy price hike decision by the government would be ‘suicidal’ for the industrial sector because this will adversely affect all the manufacturing units by pushing up their cost of production,” M Shafiul Islam (Mohiuddin), former President of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) told The New Nation on Sunday.
He said that industries are already burdened by frequently increased fuel and power tariffs. The high tariff and excessive power shortages have enhanced the cost of doing business affecting the industrial production. “Now, a fresh move to raise energy prices will bring the already poor performing industries to suffer more,” he added.
Export-oriented industries are facing a lot of difficulties to maintain their competitiveness in the global market due to high cost of production. A good number of foreign buyers have already shifted their orders to other regional countries in the wake of rising cost of production in the local industries, he mentioned. “The decision of gas and electricity price hike is totally whimsical it will lead to sky-high energy bill adversely affecting performance of the manufacturing sector,” said Abdus Salam Murshedy, President of the Exporters Association of Bangladesh (EAB).
Terming the government’s move ‘unrealistic,’ he said, when the industrial sector is bearing the burden of high energy cost, a further hike in energy prices will force many industries to shut resulting in unemployment of many workers.
The government is raising electricity prices after regular intervals only to reduce loses of the power distribution companies. But it is not suitable for the development of the industrial sector. “We need cheap energy to make our industries competitive in the global market. Otherwise, the government’s aim of transforming the nation into industrial one will not be fulfilled,” he said.
He, however, said, that government should first come forward to reduce systems loss, distribution inefficiency and pilferage of gas and electricity of the distribution companies without raising energy prices.
“If it can successfully address the problems, there will be no need to raise energy tariff time and again,” he said.
“The government has endorsed the decision of distribution companies’ proposal to raise energy prices again without considering the reality of the economy as well as capability of the consumers,” Mohammad Hatem, a former Vice-President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Production cost of the garment industries has already moved up by 30 per cent following the hike in energy prices and wages in recent years. Besides, the sector is now facing pressure from the global community to upgrade factory conditions to ensure safe working conditions there.
When the garments manufacturers are busy to upgrade their factories with additional spending, a sudden rise in energy prices will push them towards further difficulty, he said.
The former BKMEA leader observed that the cost of doing business is moving up rapidly in Bangladeshi due to poor road communication, weak infrastructure, high bank interest rates and unsustainable energy sources.
In fact, the investors are now facing huge barriers to run their businesses due to unfavorable state policies. This is preventing the investors from taking up new ventures.
“Our manufacturing sector is rapidly loosing its edge taking a heat from all such adversities,” he observed.
Considering the reality, Hatem said, the government should come forward to lower the cost of doing business providing easy credit and uninterrupted gas and electricity supply to the industrial sector to give a strong boost to the manufacturing activities.
He also urged the government to scrap its decision of energy price hike to give a breathing space of the sector.
