High interest rates, unstable law and order, extortion, energy uncertainty and lack of coordination in the revenue management system are “suicidal for the economy”, Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed said on Sunday.
He made these remarks at a press conference, titled “Expectations from the new Government to address the Current Economic Situation”, at the DCCI auditorium, the chamber said in a statement.
Due to the unchanged policy rate, businesses are being compelled to borrow from banks at interest rates of 16 to 17 per cent, he said.
The high volume of non-performing loans and the reduction of the loan classification period from nine months to three months have created “an undesirable situation” in the financial sector, leading to instability in the industrial sector, he added.
Ahmed further said that inadequate gas supply to industries along with the recent increase in gas prices for new industries and captive power plants by Tk40 and Tk42 per unit respectively has severely disrupted production.
As a result, local demand and export targets are not being met, negatively affecting the overall trade environment.
The absence of policy continuity in industrial regulations and an unstable law and order situation, particularly “unbearable extortion”, have eroded confidence in local and foreign investment as well as business operations.
Due to the lack of automation in the country’s overall revenue management system, both individual taxpayers and businesses are “falling victim to unnecessary harassment” while paying taxes, he said.
At the same time, many remain outside the tax net, depriving the government of due revenue and slowing the pace of revenue collection.
Delays in land acquisition and high land prices, an average 41 per cent increase in service charges imposed by Chattogram Port Authority, and ineffective utilisation of inland waterways have significantly increased the cost of doing business, he said.
Rising production and distribution costs are contributing substantially to inflationary pressure.
Regarding least developed country graduation, he said according to estimates by the United Nations Conference on Trade and Development, Bangladesh’s exports may decline by 5.5 to 7 per cent, amounting to approximately $2.7 billion.
Considering global economic instability and current domestic conditions, such a significant negative impact on the export sector would be “highly undesirable”, he said, urging the government to defer graduation by at least three years.
Referring to the recently signed agreement with the United States, he said it would not ensure duty-free access for the ready-made garment sector.
Conditions imposed on the import of liquefied natural gas and other products may increase the cost of doing business, he said, strongly urging the new government to renegotiate the terms and conditions of the agreement.
During a question-and-answer session, he called upon the newly elected government to take effective measures to eliminate extortion and improve the overall law and order situation in the country.
More than 2 million educated youths are unemployed and the lack of employment opportunities may push many towards illegal activities, he said.
He emphasised reducing youth dependency solely on jobs by enhancing skill development initiatives and simplifying the conditions for engaging in business activities.
He also urged the relevant government agencies to ensure easier access to loans for young entrepreneurs, particularly to facilitate start-up businesses under simplified terms.
Dhaka Chamber of Commerce and Industry Senior Vice President Razeev H Chowdhury and Vice President Md Salem Sulaiman, along with members of its board of directors, were present.
