Business leaders on Monday urged the government to reduce cost of doing business to revive investment that remained sluggish for the last couple of years mainly due to poor infrastructure and political unrest.
They said, when businesses face problems with corruption, red tape and poor infrastructure, a move to ease cost of doing business could help stimulate both private and foreign investment.
“We are facing problem with high cost of doing business resulted specially from the high bank interest rates and energy crisis,” Addus Salam Murshedy, President of Exporters Association of Bangladesh (EAB) told The New Nation yesterday.
He added: The prevailing situation is harming both investment and competitiveness of local industries as well as businesses. So, there is an immediate need to reduce the cost of doing business to boost investment.
“The central bank should prevent banks from charging excessive interest rates which is pushing up the cost of doing business,” he said, adding, “Besides, it should also take effective steps to reduce the time to approve loans and enlarge the scale of refinancing schemes for industrial loans.”
If the interest comes down to single digit, it will help encourage the investors for taking fresh bank loans and it will help revive the investment cycle.
Murshedy observed that political instability coupled with poor infrastructure was holding back the country’s economic growth. So, both the government and opposition should create conductive environment for investment to support the inclusive economic growth.
Therefore, the government should give a big push to infrastructure development and come forward to bring tax reform and the creation of market-friendly laws and regulations to help reduce cost of doing business.
“We need to make major progress in cutting the cost of doing business to create a globally competitive business environment which is imperative to promote trade and investment,” said Md Shahidullah Azim, acting President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He added, the government should create a conducive business environment with enhancing access to credit for entrepreneurs and exporters, uninterrupted supply of electricity and gas for industrial units and raise the quality of infrastructure, including roads, ports and railways, to help reduce the cost of doing business.
“No doubt, we are lagging far behind from our competitors in terms of reducing cost of doing business and this is affecting our trade and investment promotion in global arena,” he observed.
The BGMEA leader further said, the interest rate of our country is highest among the South Asian countries including India, Pakistan and Sri Lanka, which are our main competitors in the global apparel trade.
“Banks of these countries are offering loans at single digit rate whereas in our banks are charging high interest rates ranging from 15-17 per cent and therefore raising not only cost of production but also the cost of doing business here,” he added.
He maintained that this is a critical area that should be addressed immediately, otherwise, it will harm competitiveness of local apparels in global trade.
Expressing concerned over the fresh hartal call by the opposition parties, M Shahidullah Azim said, the business community does not support such a destructive political programme that always brings disastrous impact on both import and export trade.
He also said, exporters become the worst victim of hartal because they had to sustain both production and shipment loss following disruption in supply line, pushing up cost of doing business.
“Already burdened by high utility cost and rising wages, Bangladesh’s garment industry is facing difficulty to compete with its regional and continental competitors, a further disruption in production lead by fresh political unrest will provide an extra advantage to our competitors in global arena,” he said.
