BD's economy noteworthy despite pandemic: Speakers

Depending on strong macroeconomic strength, Bangladesh's economy is performing quite better than the other countries in the world despite it is going through a tough time due to Covid, said Dr Zaidi Sattar, Chairman, Policy Research Institute of Bangladesh at webinar on Saturday.

Speakers at the webinar have said that attracting FDI, expansion of trade, reforms of tax, VAT, duty and tariff structure, policy reforms, skill development, improving backward linkage industry are key to the economic recovery of the country.

They also said facilitating ADR system, financial inclusion, utilizing capital market for long-term financing, access to finance for small and cottage industry, strong negotiation skills and product diversification would also help the country to economic recovery.

The speakers said this at a Webinar on "Bi-annual economic state and future stance of Bangladesh economy: private sector perspective" organized by Dhaka Chamber of Commerce & Industry (DCCI) on Saturday, said a press release.

Planning Minister M A Mannan joined the webinar as the chief guest while Professor Dr Mohammed Farashuddin, former Governor of Bangladesh Bank joined as the guest of honour. The keynote paper was presented by the DCCI President Rizwan Rahman.

The planning minister said that the private sector is in the driving seat of stimulating the economy.

"Government has a good collaboration with the private sector which will take Bangladesh to a new destination. For policy reforms, tax reforms or tariff structure reforms, the government will continue its attachment with the private sector for framing out a better policy regime," he said.

Mannan said the government is giving focus on better living, better values of life, more freedom, more democracy and independence of people.

"The present government is the most business-friendly government in the country," he said.

Regarding the prevailing Covid-19 crisis, he said mass vaccination has been start. "Hopefully we will overcome the situation shortly." added the Minister.

Guest of Honour Professor Dr Mohammed Farashuddin, Former Governor of Bangladesh Bank said Father of the Nation Bangabandhu Sheikh Mujibur Rahman has always been a pragmatic and private sector friendly leader.

He said the private sector is doing better now as it has seen its dominance from the parliament to cabinet to financial sector as well.

According to BBS, the GDP growth in FY2019-20 was 3.51 per cent due to Covid. But, in FY2021 it was 5.47 per cent.

But, Dr Farashuddin stressed increasing the existing Tax-GDP ratio which is only 10 per cent whereas he said it is 18 per cent in Nepal. "Recently Vietnam has surpassed the second position of Bangladesh in terms of RMG export," he added.

For export performance, Dr Farashuddin suggested following the successful model of Vietnam, Nepal and Sri Lanka.

He also called for policy reforms and an efficient credit flow mechanism so that cottage, micro and small entrepreneurs can be benefitted largely.

The former central bank Governor also urged for buy back system for better FDI attraction and transformation of agriculture sector in producing goods and services for the domestic market.

Dr Zaidi Sattar, Chairman, Policy Research Institute (PRI) of Bangladesh said, "We need a tripartite partnership among the public, private and non-public sectors. Consumers are the integral part of private sector. So there should be a balance between the producers and consumers."

He also mentioned that the growth is dependent on three pillars namely macroeconomic development, export performance and trade development.

Dr Zaidi thus advocated for a sustainable trade policy having equal treatment especially for non-garment sector. He also reiterated for rationalizing current tariff structure and incentive policy.

Dr Binayak Sen, Director General, Bangladesh Institute of Development Studies (BIDS) said, "We do not have an up-to-date poverty, employment or human development data. Lack of data actually affects the quality of policy formulation. We need a systematic and coordinated data base,"

He was hopeful that after the lockdown, poverty rate would come down. "While designing a stimulus package, priority should be given to cottage and small sector," he said.

Dr Binayek said social protection system for the urban community is also same important.

He further suggested rationalizing the domestic structure of tax, tariffs and hidden subsidies, a decentralized budget, institutional reforms to reaching out to all the sectors.

Professor Mohammad Abdul Momen, Director, IBA, University of Dhaka said to face the challenges of LDC graduation in terms of export, there is a need to go for product diversification and entrepreneurial diversification.

Dr Nazneen Ahmed, Country Economist, UNDP Bangladesh talked about the recovery from Covid and facing challenges of LDC graduation.

She said, "We can't go for unlimited lockdown for the sake of economy. so we have to go for mass vaccination and abiding by the health advisories. During this volatile situation, access to finance including financial inclusion for the CMSMEs is more important,"

Dr Nazneen also urged for a public private collaboration, nexus of government planning, improving trade negotiation skills, climate negotiating skills and green financing mechanism of Banks.

DCCI President Rizwan Rahman said in terms of macroeconomic perspective over the last 6 months, the economy is being conducted more or less in the right direction despite manifold Covid-led challenges.

"Both public and private sectors have to work hand in hand towards the road to recovery to achieve the game-changing economic transformation of Bangladesh targeted in 2026 and 2041," he said.

In order to boost internal revenue generation, Rizwan Rahman suggested for full automation of tax, vat, customs assessment, return and credit.

Regarding Monetary Policy, he said relaxed terms and conditions of repayment and collateral would help increase credit demand from private sector.

To accelerate private investment, the DCCI President recommended for improvement in country competitiveness, cluster development of backward linkage industry, expanding ADR system and capital market-led long term financing.

For the survival of CMSMEs, he suggested for collateral free cash flow based loan, comprehensive policy framework, reducing bureaucratic complexities and at least 3 years of moratorium period.

DCCI Senior Vice President NKA Mobin gave the vote of thanks. DCCI Vice President Monowar Hossain, Members of the Board of Directors of DCCI and former President Rashed Maksud Khan also joined the event.