Key takeaways from the survey: What industries expect in 2025
Tackle corruption to boost investors' confidence, cut costs
Md Abdul Jabbar
Managing Director, DBL Group
I believe that for the betterment of Bangladesh's economy, we need to put our best efforts into minimizing corruption. This would build investors' confidence in the ease of doing business and encourage them to invest. Confidence in institutions would lead to both local and foreign direct investments (FDIs) and, in turn, help minimize government expenditures. As a result, both public and private institutions would become more accountable and efficient.
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The inclusion of technocrats with global exposure in government and autonomous institutions, as well as in ministries, would greatly uplift the system.
Non-performing large corporations with significant bank loans should be nationalized and governed by an autonomous board consisting of seasoned industrialists, experienced bureaucrats, economists, renowned teachers, and subject matter specialists. This board would implement strategic measures for safeguarding national interests.
A clear and realistic 5-year industrial investment plan should be implemented. Both public and private institutions should align with the plan to ensure they can foresee the future.
Genuine businesses should be prioritized, facilitated
R N Paul
Managing Director, RFL Group
Bangladesh's economy largely depends on three sectors. One is local agricultural produce, where I hope production will be good if there are no natural calamities. The other two sectors are exports and remittances from foreign workers. The export growth we are seeing this year is likely to continue in the years ahead. Companies like ours aim to grow in the export sector by 25-30% in the coming year, and we are preparing accordingly. We are venturing into new sectors beyond garments, diversifying into markets like luggage, electronics, and many other avenues. We are also optimistic that wage earners sending foreign currency, which is already easing the dollar crisis, will continue to contribute. I am hopeful this crisis won't persist, and 2025 will be a promising year for us.
Regarding political stability, much will depend on how the interim government chooses to move forward. If they remain election-focused and stable, I am confident the economy will not be disrupted. Additionally, the steady recovery of local businesses after the unrest further strengthens my optimism.
About the dollar crisis, significant progress has been made to address it. In my view, crises like this can teach us to be more efficient. One positive outcome has been the reduction in less essential import bills and the tight rein on non-essential development projects that were draining dollars. If the focus remains on necessary projects and local manufacturers like us are well-supported, the future looks bright.
On Trump's victory in the US election, I see this as a potential advantage for Bangladesh. Businesses in the US are already seeking alternatives to China. Countries like Vietnam, Cambodia, and Indonesia are poised to benefit from this shift, and I believe Bangladesh can also capitalise on these opportunities.
My foremost suggestion for 2025 is that, regardless of which government is in power, we as businessmen should not let ourselves be influenced by political affiliations. We must focus on our work and collaborate with the government to ensure they facilitate our efforts effectively. A businessman's identity should not be tied to their political preferences. Attempting to leverage political power can backfire. That said, I believe most businessmen love their businesses deeply, and any political affiliations they form are solely for the survival and growth of their enterprises. Our businesses are like our children, and we wouldn't want anything to harm them. I am certain thousands of other businessmen across the country would agree with me.
Finally, I believe genuine businesses, those that repay loans responsibly and genuinely contribute to Bangladesh's economy should be prioritised and facilitated. The interim government, being free from political motivations unlike the previous regime, should remain unbiased and support businesses through a fair and transparent decision-making process.
Frame simple policies, implement those to promote export diversification, investment
Selim H Rahman
Chairman, HATIL and President of the Bangladesh Furniture Industry Owners Association
Export diversification is crucial for the development of various industrial sectors and for building a sustainable economic foundation. Currently, our exports are largely dependent on ready-made garments and a few other items, even though it has been 53 years since Independence. Both the government and private sectors acknowledge and agree that we must diversify our exports. After long efforts, the government has finally decided on and published policies with clear instructions for providing bond facilities against bank guarantees in the Export Policy 2021-24 and 2024-27, Import Policy Order 2021-24, and the National Tariff Policy 2023. However, these policies have yet to be implemented due to the lack of consideration and cooperation from the NBR, which is unfortunate and unexpected for the greater national interest.
Such important government policies should be implemented immediately after they are approved and published. Otherwise, they will have negative and detrimental impacts, which will severely affect investments, the progress of industrialization, and Foreign Direct Investment (FDI). It will also undermine the spirit of business, hindering our ability to achieve anticipated economic growth.
The specialized bond facilities have helped the ready-made garments sector develop, and we are currently the 3rd largest exporter of garments. According to the National Tariff Policy 2023, the bond facility against a bank guarantee for export diversification is much safer and more secure compared to the current specialized bond facilities, such as the 100% (80% export and 20% local market) model. In this sense, there are no opportunities for abuse. The government must provide opportunities for partially export-oriented industries in all sectors to diversify. In the near future, these partially export-oriented industries will become fully export-oriented.
To build a sustainable economy, the government must formulate simple and effective policies to encourage export diversification and investment. Immediate steps should be taken to implement the policies that promote diversification, industrialization, and investment in multiple industrial sectors. Otherwise, it will be difficult to achieve sustainable economic growth and strong industrial development.
Vietnam, which became independent after Bangladesh, achieved exports of $354 billion in 2023, with a target set far higher than this figure, while our target is $47. This is shameful for us. Immediate action must be taken to create more effective policies and ensure prompt implementation for the sake of diversification and investment. If the government implements the National Tariff Policy 2023 and provides opportunities for diversification and investment in partially export-oriented industries across various sectors, there is great potential to achieve annual export volumes of $200 billion or more within the next 5 to 10 years.
Tea needs to get proper price to see a turnaround
Kamran Tanvirur Rahman
Chairman, Bangladesh Tea Association
Bangladesh's tea industry market is approximately Tk2000 crore. Nearly 1 lakh 5 thousand people are employed in the tea industry, with 1 lakh 2 thousand workers currently working in 158 tea gardens and 3 thousand employed as clerks. Annual tea production exceeds 10 crore kgs.
However, since 2019, the industry has been consistently incurring losses. The covid-19 pandemic, the global business crisis, the decline in people's purchasing power and the increasing price of consumer goods have all been barriers to the tea industry's revival. While product prices in other sectors are increasing, this is not the case in the tea industry. Pricing remains the main and most important issue for tea. Tea is being sold at a lower rate than the production cost per kg. All the tea garden owners are facing losses, and there are significant concerns about whether the tea industry will be able to revive itself in 2025. The government needs to intervene with proper policies to minimize the losses of garden owners.
Tea production is highly reliant on weather. Production increases if there is sufficient rainfall. In 2023, tea production was 10 crore 29 lakh kgs. In the current year, up to October, 7 crore 66 lakh 73 thousand kgs of tea have been produced. The production in 2025 will depend entirely on the weather.
Take steps to cut fuel prices to help the aviation industry recover
Mofizur Rahmann
Managing Director, Novoair and Secretary General at AOAB
The Covid pandemic impacted every business, but the aviation sector was hit hardest. While the aviation sectors of most countries were strongly supported by their respective governments, there was a lack of support for this sector in any form in our country. Even then, the aviation sector here started to recover, but a fresh blow came from the Ukraine war. It had a far-reaching impact, causing a huge spike in fuel prices and the devaluation of the taka against the dollar. Although fuel prices have returned to pre-war levels, they are still very high in Bangladesh.
The 5 August regime change through a mass uprising has given us new hope in all sectors, including aviation. We hope the interim government will be able to rein in past corruption in the energy sector, effectively bringing down fuel prices, which are a key driver of growth in the aviation sector. A form of economic and social stability is expected to return, with expanding business activities, which in turn will drive growth in both domestic and international air travel.
Bank financing crisis and emerging compliance issues remain concerns for 2025
Fazlee Shamim Ehsan
Chief Executive Officer, Fatullah Apparels
The biggest problem we foresee for 2025 is that corruption in our bureaucratic system is still not eradicated. In fact, due to these existing corrupt practices, new problems are arising that previously didn't exist. For example, labour unrest with no specific cause. Moreover, due to the interim government being new and inexperienced, they are dealing with certain international pressures with more emphasis than required, which we typically handle as regular problems. If, in the name of reforms, certain rules and regulations based on international standards are applied to our country, it wouldn't be helpful given the current economic situation. Another concern is the banking crisis. While gas and electricity problems are easing, banks are largely deficient in funds, which is causing many issues for businesses. These are my main concerns for 2025.
No much worries if supply chain disruptions can be minimised
Shams Mahmud
Managing Director, Shasha Denims Ltd
We are hopeful for the upcoming year, even though we were initially concerned that buyer confidence in Bangladesh would erode. There are still some technical issues. Brands are likely to observe the situation throughout the year before deciding on the future of their relationship with Bangladesh. We feared that the three months of uncertainty would trigger a negative reaction, which did come true initially, but it was mostly due to supply chain disruptions. Once investors saw that it was specific to a certain area, they began placing their orders elsewhere (away from Ashulia) as a precaution. As a result, we no longer need to worry about not receiving orders.
As I mentioned earlier, we are hopeful for next year, but Bangladesh Bank has a major role to play in this. The IMF is forecasting inflation to be in single digits by next year. Ahsan H. Mansur, the governor of Bangladesh Bank, has assured us that when the inflation rate settles, interest rates will be adjusted accordingly. He is urging us to be patient, as he is confident things will sort out in 6 months.
One thing we requested was to postpone the loan classification rules as per IMF conditions. The current business landscape still depends on if we can keep everything stable for the first four months. If we are able to do that, the RMG and textiles industries, which help maintain macroeconomic stability, should also stabilize and become positive. With two Eids approaching, we are already in a financial crisis, with many of us barely getting by. If the festival salaries can be disbursed on time, and if no further problems arise in financial working capital or long-term social or political disruptions (such as violence or blockades) force us to close our industry zones, I don't see any more problems affecting us. However, if these disruptions persist, our biggest challenge will be to comply with the loan classification rule by Bangladesh Bank as per IMF conditions. So, the next 6 months will be crucial for Bangladesh, as the future of the country's business landscape will rely heavily on how we tackle these challenges. But, even amid all this, the positive news is that buyers have not lost confidence in us till now.
Exporting from India requires a 10% duty which is why many Chinese companies are already preparing in advance to relocate to Bangladesh since Trump being back as US president could impose high tariffs on Chinese goods. It is a huge opportunity for Bangladesh but energy security might come as a concern there.
To sum up, financial stability, law and order, and energy security will be essential factors to maintain in order to ensure our industry runs properly. At present, with the current energy prices and interest rates, it will be difficult to sustain the industry. If these three factors are kept in order, supply chain disruptions should be minimized, eventually bringing down inflation as well.
Maintain law & order and ensure gas supply to help industries seize opportunities in the global trade shift
Azizur Chowdhury
Managing Director, J.M. Fabrics Ltd.
I think the number one challenge for the country will be maintaining law and order. Since the change of regime, we now hold a unique position to improve our country's image by restructuring laws and regulations. I believe many investors are eager to invest in Bangladesh, especially with the return of Donald Trump, as businesses fear their long-term trade opportunities in China. Consequently, these investors are seeking alternatives to China. Countries like Vietnam and Indonesia are thriving with diverse product offerings, while Pakistan's business sector is declining due to irregularities. Bangladesh has the best opportunity to attract diverted business from China if it follows Vietnam's model rather than Pakistan's.
Secondly, Bangladesh's opportunity is huge since it is consistently competing with Opening Price Point (OPP) products such as basic t-shirts and underwear. Instead of merely increasing production lines in existing mills, we can focus on enhancing capabilities within these mills and adding value to our products. For example, we could manufacture printed t-shirts instead of plain ones, expand the capacity for embroidery, and invest in innovations such as moisture-wicking fabrics for sportswear. Such small investments can add value to our products and increase our FOB from $2 to $4–$5. Rather than increasing the volume, increasing the complexity of our products opens up a huge prospect for growth.
Energy is another huge challenge. We had a good last month with gas pressure, but as of today (4 Dec), we are again facing low gas pressure. As a result, it is hard to maintain a work plan. For example, if my fabric capacity is 40 tons, due to low gas pressure, only 25 tons are produced. So, if I have 100 lines, I can fully operate only 50 lines as we lack fabrics. This causes us to miss our buyers' schedules. I would suggest the government take a look at what the returns are per dollar. Instead of giving the gas elsewhere at a subsidised rate, the gas should be given to industries like textiles or garments where captive generation with combined heat and power is utilised at 90% efficiency. If this is done, these industries can bring in more foreign currency into the economy and generate more employment.
Democratically-elected govt can foster good business environment
Mohammad Zaved Akhtar
CEO and managing director of Unilever Bangladesh Limited and President of the FICCI
A democratically-elected government can foster a good business and investment environment in Bangladesh by implementing some of the reforms suggested by the interim government. The FICCI is hoping for noticeable improvements in the policies, processes and systems of the Bangladesh Investment Development Authority, National Board of Revenue and Bangladesh Bank. These changes, we believe, can yield long-term benefits and have a significant impact on creating a positive investment climate in Bangladesh. It will also help businesses gain confidence in long-term investment and trade policies.
Will bring much-needed clarity
Abdullah Hil Rakib
Vice-President, Bangladesh Garments Manufacturers and Exporters Association (BGMEA)
This is particularly important for those operating in international markets, as buyers often inquire about political stability. This announcement demonstrates our commitment to a democratic process, which will help build confidence among international partners. Businesses faced numerous questions regarding human rights and governance during past regimes.
However, this new development signals a shift toward stability, encouraging global buyers to strengthen their partnerships with Bangladesh.
Will undoubtedly boost business confidence
Mohammed Amirul Haque
Managing director of Seacom Group and Premier Cement
The CA made a prudent announcement which will energise people who are waiting for both reforms and a transition to the rule of elected government. So many business decisions have been halted amid a lack of clear political direction. The clarity will now help accelerate business decisions. The Interim government took charge in an emergent situation, but a political government with people's mandate can do a lot more in boosting business confidence.
