We’ll give the government a logistics road map

The main task of the FBCCI (Federation of Bangladesh Chambers of Commerce and Industry) is to work with the government at the policy level. It is very important to establish this role of the apex business body. But in most cases government's stakeholders do not include us in policy dialogues.

They often do it on their own. When the NBR (National Board of Revenue) framed the VAT law in 2010, they incorporated FBCCI in their consultation process starting from the drafting stage. Now they are drafting income tax law, but this time they have not taken FBCCI into consideration. They have done it on their own and is now asking us for opinion, giving 10 days or 15 days time. But we need time to get views of all stakeholders. There were task forces at the NBR, but those are not functioning now.

Since we are to implement most of revenue-related policies, government policymakers and regulatory bodies should include us in the process beforehand. The private sector is a crucial part of the implementation process and they should be taken into account when such policies and rules are prepared. This is the thing that should be given importance.

You know LDC graduation is nearing. We are to thank the prime minister for steering the country towards a middle income economy from a low income one. It may turn out to be both opportunities and challenges for us. To face the challenges we have to work together. We from the FBCCI are gearing up for the goals set for 2030 and 2041. If we are to achieve those targets we have to expand our businesses, increase our activities. We have to raise our exports to $300 billion in 2041 from $47billion now, our per capita income has to reach $12,500 from close to $2,000 now. To make these targets achievable, we have to have more investments both local and foreign, we have to create more jobs for people, we have to diversify our industrialisation.

The economy is growing bigger in size. But our transportation system cannot keep pace. On the Dhaka-Chattogram highway, the average speed is 40 kph, if we can take it up to 80 kph, then our competitiveness will go up by 5%. Another 3% to 5% competitiveness will rise if we can expedite Chattogram Port services. Improvements in these two areas alone can help us enhance our export competitiveness by 8% to 10%.   

Just think what may happen (in situation of highways and ports) when economic activities will enhance after economic zones come into operation. This is why logistics issue comes to the fore. Different countries have even set up logistics ministries. In Bangladesh there is separate division for bridges, but nothing such for logistics, although it is mainstay for the supply chain.

Infographic: TBS

You see container freight charges have gone up by 4/5 times due to disruptions in global supply chains during the Covid-19 pandemic. Ocean freight charges surged from a range of $1000 and $2000 (per TEU) to $8000-$10,000 now.  50% tomatoes grown by our farmers are rotten due to poor transportation, storage and packaging. All these are part of logistics. We do not have an integrated logistics and supply chain, where we need to work more. The FBCCI is now working to prepare a logistics road map for the country, identifying what need to be done. We want to give the government a 12-year master plan for logistics development.

We are doing another work on circular economy to turn waste into resources. The whole world is gaining from efficient waste management. To do this, our city corporations, pourasavas, union parishads have to take the responsibility to improve garbage collection.

We have now enough advisers at the FBCCI for subject-based works. We have planned to set up an innovation centre in our building at Hatkhola in the city to develop human resources and to advise government offices to enhance their capacity and improve services. We do not have specialisation in government offices, which is necessary for effective trade negotiations to protect our trade sector after the LDC graduation when tariff walls will go.

Issues like anti-dumping, non-tariff barriers will come up and both public offices and private sector will have to improve skills and develop mechanisms to deal with the (post-LDC) issues.

We will submit our plans to the government for skill development, identifying which sector needs what sorts of skills.

We hope to start work on it in 2/3 months.

These are among our plans at the FBCCI to help the private sector to prepare for the next big targets.  

The private sector also needs to have its own plan to cope with the post-LDC graduation challenges. Exports may face challenges, so we need to enhance our capacity in raw material sourcing. Foreign investment is needed in synthetic fabrics to help the ready-made garment industry meet global demand. Infrastructural development has been on the right track now, but faster implementation of economic zones and other projects is needed. We need to work more to create local skills to reduce outflow of remittance by foreigners. We also need to develop skills for overseas job markets so that expatriate Bangladeshis can earn more remittance. Agro-based and food processing industries hold huge potentials for both exports and employment. Educated youths are now farming fish and vegetable in villages. They need support. Ceramics, leather, plastic, light engineering are among the sectors which hold tremendous potentials. Universities need to produce required skills for industries.

Bangladesh Bank should make banks lend certain portion of their loans to small and medium enterprises. We set up a help desk for SMEs at the FBCCI. District chambers need to be more active to support local SMEs. 

The article is based on an interview of the FBCCI President taken over phone by The Business Standard's Senior Staff Correspondent Reyad Hossain