Private sector must gear up to meet the challenges that lie ahead

How does the FBCCI plan to celebrate its 50th anniversary this year?

The FBCCI will organise a three-day event in March to celebrate its golden jubilee. A two-day international business summit will be held to brand Bangladesh as a trade and investment-friendly country, and on the third day, awards will be conferred to businessmen, freedom fighters, and prominent entrepreneurs who have contributed to the national economy. 

A fair titled "Best of Bangladesh" will be organised to showcase Bangladeshi products and services to the world. A plenary session will also be held at the summit on Bangladesh's trade prospects where heads of the world's big companies, businessmen, commerce ministers of various countries, industry ministers, government officials, heads of development agencies, diplomats, and experts will be present. 

A deal has already been signed with CNN to brand Bangladesh internationally. They will campaign in the international media about the trade and economic potential of Bangladesh. Prime Minister Sheikh Hasina has agreed to inaugurate the summit. President Abdul Hamid is expected to be the chief guest at the closing ceremony.

What kind of challenges do you see for businesses in 2023 and how can the government and the private sector come forward in overcoming those challenges?

The coronavirus pandemic and the Russia-Ukraine war have created major turmoil in the global economy, and Bangladesh is not immune to it. The private sector was already under pressure last year due to the volatility of commodity prices in the international market, the increase in fuel and transportation costs, the dollar crisis, the decrease in export purchase orders, and the overall high cost of doing business.

These issues will remain in 2023, not to mention some more challenges. Because we will not get the trade benefits that we are currently getting as a least developed country (LDC) after graduation from the LDC status in 2026. Then we have to survive by competing in the export market.

The private sector must prepare now to increase competitiveness. Entrepreneurs should put more emphasis on skilled manpower, skilled management, and technical excellence. Investment in research and development of value-added products should be increased. Besides, backward linkage industries should be extensively developed.

Infographic: TBS

Industry raw materials must be produced or processed at the local level. For this, a public-private coordinated step is essential. Special attention should be given to logistics, infrastructure and policy support. I believe that if we proceed in a well-planned manner keeping these issues in mind, the trend of exports and economic growth will be more rapid in the post-LDC period.

SME entrepreneurs face several complications in starting businesses and getting loans. What initiatives has the FBCCI taken to help them?

Small and medium enterprise (SME) entrepreneurs contribute the most to the economy of developing countries. Around 60% of income in India and 70% in China come from the SME sector. However, the contribution of SMEs in Bangladesh is much lower than that in other countries. The contribution of the SME sector to our country's economy is about 25-27%.

SMEs became the most vulnerable sector in the country facing the challenges created in the global economy due to the pandemic and the war. The Bangladesh Bank has set up a fund of Tk25,000 crore for the SME sector but entrepreneurs still face many complexities to get loans.

Small and medium entrepreneurs are not able to take loans on time due to a lack of business document management and collateral. Banks are also very reluctant to give loans to them. FBCCI is trying to facilitate the process of obtaining loans for SME entrepreneurs.

Recently, we entered into an agreement with the Bengal Commercial Bank, under which, the bank will provide loan assistance to the cottage, micro, small and medium enterprises (CMSMEs) across the country on easy terms. Such agreements of the FBCCI with other banks will continue in the future.

How can the country utilise the business potential of the country's remote areas? What can FBCCI do in this regard?

SMEs are expanding in the country as people's purchasing power and demand are increasing day by day. Aside from looking for jobs, educated youths are becoming entrepreneurs themselves. New entrepreneurs should be encouraged and the process of starting a business should be made easy and affordable for new entrepreneurs. Funding should be ensured on easy terms for them and training should be provided to increase the capacity of marginal entrepreneurs to increase productivity. It is also important to improve infrastructure for easy marketing of their produce.

Besides, SMEs should be developed into associated industries of large industries. Government policy support will definitely be needed for this. The FBCCI, as an apex association of traders, is already working on these issues. 

Bangladesh lags far behind its competitors in terms of logistics capacity. How is it hurting businesses? Do you think it is necessary to take initiatives in this regard?

The private sector is working towards achieving an export target of $300 billion by 2041, but the high cost of logistics is hampering that effort. The lack of logistics capacity, including port management, increases the lead time of our export products. Hence, our entrepreneurs are falling behind in global competition.

Bangladesh is going to graduate from the LDC status by 2026. Then Bangladesh will have to face more competition in the free market economy. But competitiveness cannot be increased without increasing logistics capacity, improving the supply chain, and reducing costs.

We sincerely thank the government for including logistics as a priority sector in the National Industrial Policy 2022 and listing 21 sub-sectors of logistics in the policy. I believe that port development, multimodal transport strategy and infrastructure development projects to meet the growing needs of more than 100 special economic zones in the country will contribute significantly to achieving export targets.

How successful was the attempt to diversify export products? What needs to be done at the public-private level?

From the upswing in our export growth in the last decade, we can say that some progress in product diversification has been made. However, when compared with the export growth of other competing countries in Asia, it can be seen that these countries tend to produce multifaceted, value-added and high-end products rather than relying on one or two products. At the same time, they are far ahead in diversifying the market. We need to focus more on product and market diversification to stay competitive.

All the economic activities of the developed world are being conducted around the Fourth Industrial Revolution (4IR). Except for some activities in the service sector, our manufacturing industries are still operating around the Third Industrial Revolution. Therefore, to sustain our export sector in the near future, we need to increase the competitiveness of agricultural products processing, light engineering, ICT, blue economy, circular economy and other service sectors. There is no alternative to moving forward in alignment with the 4IR.

Bangladesh is still in the early stages of technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and Blockchain. Knowledge-based manpower should be developed by taking advantage of the demographic dividend and sector-wise special education/training programmes should be introduced as per industry demand while moving away from traditional education curriculum. Coordination between government, industry and educational institutions should be ensured in this regard.

To what extent has customs been helpful in import and export? What more can be done in this regard?

Import and export are very significant for the country's economy. Goods worth about $60-70 billion are imported into the country every year while goods worth more than $50 billion are exported to various destinations. Bangladesh Customs has an immense role to play in this huge trade, especially in terms of trade facilitation.

If goods can be unloaded quickly at the port, business costs come down significantly and also keeps the prices of products low. That is why traders (importers and exporters) always have an eye on how to clear the goods quickly from Customs. 

Customs houses have made some progress in trade facilitation but there are still some challenges to address. Traders still have to go through various complexities while redeeming goods from Customs which involve product value, product testing, HS code, and product description. 

Customs should be more helpful in these cases. The Bangladesh Standards and Testing Institution (BSTI) and other government testing agencies need to speed up their activities so that import-export goods can be redeemed as soon as possible.

Do you see any political uncertainty ahead of the national election? What do business people expect from political parties?

The election is a regular activity in a democratic country, which has nothing to do with business. We do not see the possibility of any kind of instability if elections are held in a democratic process through the consensus of political parties.

There will be a call from the private sector to the political parties not to hold any election-oriented programme that has a negative impact on trade, industrial production and exports. 

Political parties have a responsibility to maintain an environment which is business, trade and investment-friendly for the sake of the national interest.