A budget pushing for private sector competitiveness

The proposed national budget, focusing on fiscal consolidation, reduces incentives for the private sector and encourages them to increase competitiveness through improved efficiency, modernisation, automation and diversification of products and markets.

"The government is enhancing policy predictability by outlining a roadmap of fiscal measures, which allows investors to make more informed decisions," Prime Minister's Private Industry and Investment Adviser Salman F Rahman told TBS.

For example, he said, unlike the usual trend of granting one-year extensions, the ICT sector's tax exemption has now been extended for the next three years. This should aid entrepreneurs in making better investment plans as they capitalise on the Smart Bangladesh vision.

He emphasised the need for increased dynamism in the private sector to seize emerging export opportunities following the significant devaluation of the taka.

Salman, a leading entrepreneur in the country, pointed out that as the global apparel market increasingly favours man-made fibres, the Bangladeshi industry should enhance its productivity and shift towards these materials.

Product diversification and finding new markets should be a top priority for the future export leaders, he added.

M Masrur Reaz, an economist and the chairman of the local think tank Policy Exchange Bangladesh, said, "Smart entrepreneurs have already recognised the benefits of investing in modernisation, such as green energy, energy-efficient machinery, and automation."

The country's overall cost of doing business remains elevated due to challenges in infrastructure, bureaucratic red tape, and low productivity worsened by a notable skill gap, he said, adding that both the government and the private sector should play their parts in minimising unnecessary costs to enhance business competitiveness.

"It is evident that relying solely on state incentives won't sustain business advantages, particularly for exporters. Adapting to new-age competitiveness will be crucial for businesses to flourish," he said.

Reaz said substantial operating cost reductions can be achieved through investments in modernisation, a lesson that both the private sector and the government should heed.

"The government's responsibility lies in crafting the right policies, providing incentives to initiate and sustain positive initiatives, and developing a supportive infrastructure and ecosystem," he stated.

For instance, Reaz illustrated that an entrepreneur who has invested in 3-D printing technology for his factory requires skilled workers to operate it effectively. While the entrepreneur may provide on-the-job training, the readiness of these workers to learn largely depends on the quality of the education system.

East Coast Group Chairman Azam J Chowdhury, the man behind the companies leading the country's LPG and lubricant markets, said, "Adopting modernisation involves streamlining operations for efficient manufacturing and business processes."

Humayun Rashid, president of the International Business Forum of Bangladesh, said the country needs significant improvement in the ease of doing business index, and corruption control to attract investment for the next growth journey, especially following the recent slowdown of quarterly GDP growth.

Tech entrepreneur AKM Fahim Mashroor said automation, optimising artificial intelligence, skill enhancement, and tech research should have been especially incentivised in the proposed budget as the future is there.