Reforms in the taxation system, proper assessment of the pandemic impact on the economy and optimum utilisation of the stimulus packages remain key to making businesses competitive, stakeholders said at a virtual dialogue on Saturday.
They laid emphasis on prioritising micro, cottage and SMEs (small and medium enterprises) which, they said, were hit hard by the pandemic. The SMEs have received the least incentives, they felt.
The speakers, who included economists, high government officials and business leaders, suggested focusing on health sector and vaccination, skills development, creating employable graduates and building required infrastructure for quick and sustainable economic recovery.
They were addressing at the Episode-II of the Financial Express (FE) Budget Dialogue Series styled 'Business Profitability and Competitiveness in Bangladesh'.
The panelists were: Executive Chairman of Bangladesh Investment Development Authority (BIDA) Md. Sirazul Islam, Executive Director of the Policy Research Institute of Bangladesh (PRI) Dr. Ahsan H. Mansur, former Member (VAT) of National Board of Revenue (NBR) Md. Farid Uddin and President of the Bangladesh Association of Software and Information Services (BASIS) Syed Almas Kabir.
Dr. Selim Raihan, Executive Director of South Asian Network on Economic Modeling (SANEM) and a Professor of Economics at the University of Dhaka moderated the discussion.
Mr. Shah Husain Imam, Editor and CEO of the Financial Express, offered the vote of thanks.
Dr. Ahsan H. Mansur said the business cost has gone up everywhere across the world. The hike in freight charges compared to that during the pre-Covid time is one of the reasons, he said.
"There are serious bottlenecks at various points of the supply chain which we couldn't overcome and the result is cost escalation everywhere," he explained.
Regarding the stimulus package, the former IMF economist said that it has been successful for the export sectors in a sense that they could retain their workforce.
Identifying the distribution channel as inefficient, he said that lots of allocations especially earmarked for the small and medium entrepreneurs remained stuck.
"The government needs to be critical of itself," he said, adding that no development can take place unless the existing problems are duly addressed.
Dr Mansur, who expressed his suspicion about statistical agency data on the national income, said: "In reality, the people of Bangladesh are not richer than the people of India in terms of per capita income."
Echoing, BIDA chairman Mr Islam raised a question as to how the purchasing capacity could rise when the people were becoming poor due to the Covid-19. "How does the per capita income go up?"
He, however, said that the large corporations might have increased their earnings even in the bad time which could have boosted in the national income and the corresponding per capita income.
About improving business competitiveness, he also underscored the need for policy reforms.
In his opening remarks, Dr. Raihan said various sectors were affected at different rates by the pandemic, but there was hardly any visible move by the government agencies yet to assess the adverse impact on the economy.
Referring to the high business costs found in a survey conducted by the SANEM, he said the overall business cost is still remained high in Bangladesh even during this pandemic period.
"All the micro and small entrepreneurs, who play a crucial role in the supply chain, were struggling to survive in comparison with the large businesses," he said.
The serious disruption in the supply chain might hinder the economic recovery at the desired level although the remittance and export earnings for the time being were showing an upward trend, he said.
"To my mind, there is a need for giving emphasis on micro and small enterprises and finding a mechanism to help them recover from the present worst condition," said Dr. Raihan.
Regarding the stimulus package, he said finance, management and monitoring should be the three areas that needed to be addressed properly.
"Financing probably is still not a big issue, but management and monitoring remain a serious issue because many surveys have found that micro and small entrepreneurs are least beneficiaries of the stimulus packages," he added.
Highlighting the need for a better business environment, Md. Farid Uddin said there had been no major reforms in terms of the country's taxation system in the last decade.
However, some little reforms took place mainly on the back of initiatives taken by the development partners.
"The stronger the revenue board becomes with policy and management, the country gets closer to a sustainable economy," he added.
Mr Almas Kabir laid emphasis on the need for developing skills of the young population considering the changes in the coming days.
"A huge number of graduates are not employable and they require additional time after graduation to become employable," he noted.
He called for establishing more infrastructure conducive to information technology-based services which the country's young population could capitalise on.
Thanking all the participants, the FE Editor Shah Husain Imam said that with its huge population, Bangladesh is also a big consumer market for which reforms are needed for reaping the economic benefits.
Bangladesh is larger than a good number of European countries in terms of population that can offer more business opportunities than many other countries in the world, he added.
