With a $4b annual export earnings target in five years, the government has drafted a policy for the shipbuilding industry to provide a range of facilities for entrepreneurs, including bank loans at a 4 per cent interest rate. The loan, which has to be repaid in 20 years, comes with a five-year moratorium. At present, bank loans for the industry come with a two-digit interest rate but the Ministry of Industries feels it needs to come down to 4 per cent. The government in the past took various initiatives to lower the interest rate to single digit, but those did not succeed. Banks had earlier pledged to bring it down to 9 per cent but have not implemented that as yet.
Bangladesh has exported 40 ships to different countries in Europe, Africa and Asia in recent years, and local shipbuilders have earned $180 million from exports. The draft policy laid emphasis on sustainable development of the shipbuilding industry, employment generation, achieving efficiency and raising standards to the international level. If this flourishing sector receives support, it will create one lakh jobs in the next five years. The formation of a Tk 5,000 crore special fund for the shipbuilding industry was also proposed in the draft of the Shipbuilding Industry Development Policy 2019. Insiders said Bangladesh is building many high-tech ships at present, and achieving the $4b export target is not a distant dream. The industries ministry is in favour of giving tax holiday facilities to shipyards for the next 10 years.
We know that shipbuilding is a labour-intensive industry. It requires heavy investment and cutting-edge technology. Entrepreneurs have to wait a long time to get returns on their investment. The existing investment structure in Bangladesh and other facilities are not at par with competitors such as China, South Korea, Japan and India. The draft policy recommended taking programmes to develop the ship repair industry. We think if properly implemented the policy will bring positive change in shipbuilding and generate huge employment. However, environment pollution and workplace safety are two major areas of concern related to the industry.
