President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Jashim Uddin on Saturday said domestic industries will be in difficulties if the current interest rate of lending is raised.
He was addressing as the chief guest the 'ERF's Dialogue', organised by the Economic Reporters Forum (ERF) at its auditorium in the capital.
He said the interest rate of bank loans cannot be increased for the sake of expanding investment in the country. If the interest rate is raised, a good number of industrial plants will lose the capacity to operate and produce, he said.
The FBCCI chief said that the capacity of the banks needs to be increased by reducing the additional expenses and expenditure in other areas, including expensive branches.
In this context, he cited an example of the US Fed saying the US has increased interest rates to strengthen the dollar. Their (USA's) formula will not be implemented in Bangladesh, he said, adding policies should be adopted keeping in mind the industry of the country.
Calling to solve the energy crisis by encouraging the use of coal in power generation in Bangladesh, he emphasised on using the country's own coal. "We have to use our own coal. In addition to increasing investment in industry, environment-friendly energy cooperation will be needed for the development of the country."
Noting that being the ninth consumer market in the world, he said foreign investment in Bangladesh will come around this market and cooperation should be increased to sustain the existing investments and (attract) new ones.
Mr Jashim Uddin also said that if the (export-oriented) industrial units don't get gas and electricity now, they will fail to deliver products according to the orders of foreign buyers. "As a result, customers will no longer be available once they return and in that case, the illegal gas connection should be stopped and other steps should be taken to keep the gas running in the industry."
Mentioning that the price of fuel has increased in the global market, he made a proposal regarding the supply of the energy. "Now gas has to be imported at a higher rate, and in that case, traders are willing to pay higher prices to ensure uninterrupted gas (supply) to the industrial plants."
The apex trade body chief said that the government is taking more tax than what it is giving in subsidy on gas… 47 per cent tax on LNG and Tk 24 per litre on diesel. By reducing this tax rate, the new reasonable price can be fixed by adjusting the excess price.
He also thinks that the businessmen should also take responsibility to keep the industry running. "Again the tax should be reduced and the price of energy should be kept at a tolerable level," he said.
Mr Jashim opined that there's no need to borrow from the International Monetary Fund (IMF) by sacrificing the country's dignity, saying that, at present, the condition of Bangladesh is not so bad that the loan has to be taken on any condition from the IMF. "Initiatives to hike lending rate will increase production costs as well as raise burden on the customers," he also said.
In response to a question about money laundering during the election year, he said, since the Bangladesh Bank says that they have found proof of up to 200 per cent excess price under the guise of imports, the central bank should bring those involved under the law. "If not, you need to stop talking funny to get a popular big hand," he said.
In response to a question about the Prime Minister's statement regarding possibility of a famine in the ongoing 'great depression', Mr Jashim Uddin said if there is a famine, it will not only be in Bangladesh but in the whole world.
ERF general secretary SM Rashidul Islam moderated the event. ERF vice president M Shafiqul Alam presided over the dialogue. Over 100 members of the forum were present.
