Businesses want improved security for economic growth

Leading business figures and bankers have urged Bangladesh's interim government to prioritise restoring law and order, describing it as essential for reviving economic activity and rebuilding institutions weakened over the years.

The call came during a discussion attended by finance and commerce advisers of the interim government on Saturday (30 November), organised by the Dhaka Chamber of Commerce and Industry (DCCI) at the Sonargaon Hotel in Dhaka.

Businesses said that ensuring stability is vital to creating an environment conducive to economic recovery, institutional reform and job creation.

Selim RF Hossain, managing director of Brac Bank, said "We know that the government is trying to rebuild the institutions which were destroyed over the years but I am sorry to say that the interim government has been a total failure in maintaining law and order."  

Calling on the government to address the situation promptly, he said, "Otherwise, it will be extremely difficult to revive the economy."

The banker also said the banking landscape would change significantly in the coming days. So, the focus should be on the exchange rate, reducing inflation, and maintaining a conservative monetary policy.

Selim RF Hossain noted that the banking sector alone cannot support the financial needs of any country. 

"Rampant looting and irregularities were seen in the banking, insurance, and capital market sectors… We will have to be transparent…we will have to strengthen the capital market," he said.

Echoing Selim's views, Incepta Pharmaceuticals Chairman Abdul Muktadir Rahman stated, "The law and order situation has worsened drastically. Nothing is more urgent than addressing it now."

Calling on the government to set a timeline to fix the anarchy, he said, "Let us not close our eyes. We have to keep our eyes open and face reality."

Stating that energy supply to industries is facing a severe shortage, he said, "We are now looking for alternative sources of gas for the industrial belt. There are controversies and different opinions, but this is the reality. We have to look for new sources."

Muktadir recommended tapping into the potential of solar energy by installing solar panels on rooftops to generate sufficient power for maintaining industrial production.

He called on the government to provide businessmen with a date, by which "there would be sufficient energy, there would be no problem to function the factories without any interruption."

PRAN-RFL Group Chairman Ahsan Khan Chowdhury said, "We believe in the economic progress of Bangladesh. If we can improve law and order, businesses will thrive."

BKMEA President Mohammad Hatem said that Mahmud Group's Deputy Managing Director Rafee Mahmud, also the owner's son, was attacked yesterday while attempting to speak with protesting workers.

"Such incidents will send a negative message to global buyers. The entrepreneur [Mahmud group owner] had to close down two of his factories due to gas shortage. The workers' salaries have been paid. Talks are ongoing with banks to clear their service allowance. The attack took place at such a time," he said.

In support of Mahmud Jeans, he said, "If the owner did not want to pay the workers, he would have fled the country."

Hatem said, "We need to adopt a zero-tolerance approach to the law and order situation."

Regarding the workers' various demands, such as salary increases, the BKMEA president said these demands should be reasonable.

Condemning the attack on Mahmud Group's DMD Rafee, Bangladesh Association of Banks (BAB) President Abdul Hai Sarker warned that unless the law and order situation improves, attracting investments will be difficult.

However, noting that many changes have taken place after the ouster of the Awami League regime on 5 August, he said, "It is not the time for placing our demands, but rather to take the country forward. We are being impatient. We need collective efforts on how to bring the country into the real development trajectory."

To that end, he called on the government to address the energy supply shortage and fix the law and order situation.

'Collaboration needed to improve law and order'

In response to the concerns of the business leaders, Commerce Adviser SK Bashir Uddin said, "The law and order situation is improving but anarchy is being created deliberately."

He said "I think the elephant in the room is the law and order and the government is very much sincere about this. We need collaboration from all to restore law and order."

"The government does not want to see such anarchy right now….I am sure you can see gradual improvement in the situation and going forward the situation will be much better," the adviser hoped.

Finance Adviser Salehuddin Ahmed called on the businessmen to not feel helpless. 

"The government is doing its best. It would not be right to think that 15 years of mess can be fixed in three months," he said.

He said corruption during the Awami League government has damaged the economy to the point that it would be impossible to fix it within two to four months. "But the damaged economy has started to stabilise. Forex reserves have increased slightly."

Speaking about the reforms in the finance sector, the adviser said, "Policy rate would not be increased for now. The government is also focusing on maintaining the private sector credit flow."

Govt should suspend LDC graduation plan

BKMEA President Mohammad A Hatem said, "The government should immediately suspend the target for graduating from the least developed country (LDC) status since we are struggling to stay afloat."

He said, "LDC graduation parameters were determined based on erroneous export figures during the past regime. Our spinning mills and backyard linkage industries are on the verge of collapse. If those issues are not immediately addressed, then the export sectors would be affected."

Commerce Adviser Sk Bashir Uddin said, "I see more challenges than opportunities regarding graduation of LDCs. Whether in 2030 or 2026, that could be a discussion, but we will have to graduate."

"Can we be ready, yes … We need to hold such discussions with prudence and farsightedness. Even NGOs would face difficulties in getting funds after graduation," Bashir said.

Finance Adviser Salehuddin Ahmed said, "LDC graduation poses a challenge for the private sector, with the transition scheduled for 2026. We are in the process of finalising the Smooth Transition Strategy (STS)."

Addressing concerns, he added, "The notion that becoming a middle-income or developing country will destroy us is not accurate."

He further explained, "While we are not in a rush, the challenge lies in ensuring competitiveness through optimal resource utilisation, international linkages, decent work, and ease of doing business, all of which depend on a robust regulatory framework and policy support from the government."

Banking needs reforms

PRAN-RFL Group Chairman Ahsan Khan said, "We improved a lot in the banking sector, and have to lower the interest costs. If we cannot open letters of credit (LCs), then there would be no production. If interest costs increase, then, business operations would suffer a lot."

Former DCCI president Hossain Khaled said that under the current economic situation, people would not be able to repay loans and there would be a rising number of NPLs. Also, the rising holding tax should be reconsidered. 

BTMA President Showkat Aziz Russell said that there was a mess in the banking sector. But no exemplary punishment was given to those auditors who were involved in the wrongdoings over the last 15 years…not a single staff of the Bangladesh bank was made accountable for such offences.

The Jute sector has been destroyed due to a lack of government policy, he said.

Russell said that the cost of doing business is probably the highest in Bangladesh.

FICCI President Zaved Akhtar, citing an example, said that his company Unilever had to incur damage of TK13 crore for a silly reason and that such barriers in businesses should be removed.

About reforms, Finance Adviser Salehuddin Ahmed said, "We will have to make immediate reforms in financial policies to prevent corruption. We want to give a message, no one would be able to launder money abroad…we are not less smart than others."

"We will trailblaze so that the next government follows it. Hopefully, that would be a new journey…new Bangladesh," he added.

Politicisation of trade bodies

Business leaders urged the government to accelerate trade body elections to enable elected leaders to effectively support its initiatives. They also stressed the importance of selecting trade leaders who are not directly connected to national politics to ensure impartiality.

BKMEA President Mohammad Hatem suggested separating trade body leadership from political involvement.

Former DCCI President Rizwan Rahman urged the commerce adviser to halt the issuance of licenses to signboard-based associations and trade bodies, suggesting that this would automatically reduce the politicisation of such organisations.

He further added, "Please explore ways to prevent trade body politicization and the labelling of all as cohorts of fascists."

In response, Commerce Adviser Bashir Uddin said, "Our competence in every aspect is weak…we don't need so many ministries. The ministries and divisions should be merged, then much better leadership would emerge."

He also agreed that the country does not require such a large number of trade associations.

Business leaders said that individuals involved in corruption during the previous regime should be held accountable and face legal consequences if necessary.

BKMEA President Hatem highlighted a growing trend of what he referred to as "case banijya" and stressed that criminal cases should not be filed against those who had no involvement in the mass killings during the July-August unrest.