Bangladesh’s knitwear exporters have welcomed the government’s efforts during its first six months to ease business operations and support the private sector, but warned that persistent energy shortages, banking-sector weaknesses and law-and-order concerns remain major obstacles to industrial recovery.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem said six months was not enough time to fully assess a government’s performance, but the administration had taken several steps to improve the business environment and revive economic activity.
He highlighted Bangladesh Bank’s initiatives to support the private sector, including refinancing incentives to help sick, partially closed and closed factories restart operations and efforts to simplify some policy requirements.
The government’s decision to allow partially export-oriented and non-bonded exporters to import raw materials duty-free against bank guarantees was also welcomed by BKMEA, Hatem said. The move would help exporters manage operations more easily by improving access to production inputs.
He also said recent tax-policy changes had created a more business- and investment-friendly environment.
However, Hatem identified gas and electricity shortages as the biggest challenge facing industries, saying the crisis cannot be resolved immediately because the government inherited the problem from the previous administration.
He said the prime minister and energy minister had consulted business leaders and industry associations to identify solutions and had committed to long-term measures.
As part of those efforts, the government has imported liquefied natural gas (LNG) from the international spot market. But Hatem said there was no quick solution to the energy crisis, as setting up a new floating storage and regasification unit (FSRU) would take about two years.
He said the government’s decision to establish another FSRU as part of a long-term plan could help address the gas shortage within the next two years.
Hatem said problems in the banking sector had also not been fully resolved despite several measures taken by Bangladesh Bank.
He also pointed to a recent deterioration in the overall law-and-order situation as another concern for businesses.
Overall, BKMEA believes the government is making efforts to address these challenges and expects long-term measures to improve energy security, financial stability and the broader business environment.
