Sheikh Fazle Fahim, the Panel Leader from 'Shommilito Bebshai Porishod', in the upcoming elections of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has vowed to make the country's apex trade body a stronger institutional entity that would facilitate trade and investment and raise the efficiency to ease doing business as well.
In an interview with the FE, Sheikh Fazle Fahim, the incumbent Senior Vice President of the FBCCI with an academic background in Masters of Liberal Arts in Political Economy from St. Edwards University in Austin, Texas (USA) said branding Bangladesh as a destination for investment will be one of his prime jobs, if elected in the polls scheduled for April 27.
"Facilitation of increased trade and investment; ease of operations; knowledge sharing and prioritizing stakeholders' input in policy planning are imperative to a workable eco-system. It is unlikely to yield expected outcome, without creating a backhaul to support the best practices," he said.
As part of his graduation programme, he had attended Harvard University in Cambridge, Massachusetts.
The excerpts of the interview are as follows:
FE- Which issues will be the primary area of focus for you, if you are elected? Where do you want to see FBCCI, in your tenure as president?
SFF-I would like to see FBCCI as a thriving institutional entity that would facilitate trade and investment and continue on our mandate of policy advocacy. While our work on automation of policy for efficiency ease of doing business and ensure port efficiency are underway, with our transitional economy and changing trends in businesses we have initiated five projects with Vision-2041 in mind. FBCCI economic research institute is an evolution of our research wing, to be trained by Jacobs and Cordova Associates Inc., the global authority on policy planning and design; this project is underway with the support of IFC. Furthermore, we are in discussions with multiple global knowledge partners. FBCCI Institute was formed for Technical Vocational Education Training (TVET), taking into consideration our growing economy and diversified export basket. Our focus is on demand driven TVET. The curriculums would be for both formal and informal sectors, with domestic and international institutions' support, providing FBCCI and FBCCI & International joint accreditations. As we only have one company bench, at our judiciary, FBCCI Alternative Dispute Resolution (ADR) was implemented, aimed to minimize lead time and cost. FBCCI TVET and FBCCI ADR will gradually have campuses and centers at regional chambers and sectorial associations. It will be a revenue stream for our trade organizations while decentralizing the services. FBCCI's present board is working to form FBCCI International University (FIU). Our objective is to structure curriculums from top global universities in behavioral science, economics, technology, engineering and mathematics (STEM) based Research University. The target is for our MSMEs' business process re-engineering to be part of global value chain and fourth industrial revolution. In addition to conventional business curriculums, block chain for private sector, AI, nano-technology, stem cell research etc., are in plans to be embedded in the university's curriculums and research programs. On a land parcel, sanctioned by Honorable Prime Minister Sheikh Hasina at Purbachal feasibility of FBCCI Icon is underway. FBCCI Icon will symbolise Bangladesh's resilient and dynamic private sector and proven economic trajectory which is the outcome of political economic vision of 2021 and 2041. With our board, general body members and working groups, these five projects of Vision 2041 of Collective Entrepreneurs Platform initiatives will progress through institutional integrity and continue over multiple tenures.
FE- What steps will you take to highlight Bangladesh's business in the international market?
SFF- Bangladesh is a brand name in the developing world. The world must understand why Bangladesh is a success story, how this very potential country is connected to both east and west. Our garments, our medicine, our leather goods, ceramics-all very potential sectors, and most importantly we have more than 10 million people working abroad. We have a strong presence of Bangladeshi diaspora in the west. So my work under the FBCCI umbrella would be to market Bangladesh as a brand in international market. I would be very aggressive in branding Bangladesh as a destination for investment.
We will also revisit our memorandum of understandings with global apex trade organizations and move towards priority-based targets and focused time bound initiatives.
FE- For a long time, there has been a demand by businessmen to yield a single digit interest rate on loans. What role, do you think, your leadership in the Federation, will play in this field?
SFF-Facilitating easy access to fund and reducing cost of business have been FBCCI's top policy advocacy agenda especially for new entrepreneurs, women entrepreneurs and MSMEs. We are engaged with stakeholders on the agenda. Targeted single digit interest rate has been available for last couple of years. After our last meeting with the central bank we plan on engaging with the bankers associations. Our members routinely notify us on many challenges contradicting government availed financial products and some policies, including limitation of access to finance to MSMEs, women entrepreneurs and youth entrepreneurs. We will look into stakeholders' quarterly engagements through working groups to mitigate the challenges. Interest rate should not be compounded, rather should be simple. Term loans should vary on project scope and debt equity ratio in practice should encourage and ease ventures of new entrepreneurs. Financial institutions' access to finance should be Simplified, Transparent, Consistent and Predictable (STPC), without fine prints and hidden costs. If ease of doing business is supported with ease of financing, entrepreneurs and financial institutions will be benefitted. Furthermore, as consumer spending is a growth variable of economies, today Bangladesh stands as encouragingly high purchasing power parity in the world, yet interest rates on equal monthly instalments (EMI) to avail fundamental conveniences are not consumer friendly; home loans, car loans, consumer loan rates should have longer terms and lower costs. All these products have backward linkage that generate jobs, generates revenue and have significant effects in our economy. Decades back things that were considered luxury, have become necessities today. Furthermore despite democratization of financial institutions there is a smaller degree of financial inclusion than normal, and that is our reality. Trade financing facilities with ease at union levels would institutionalizemoney supply into our economy enabling formalized and transparent economy while increasing financial inclusion. At the same time inflation, punitive measures against handful of wilful defaulters should be addressed without prejudice. However, using that to deprive responsible entrepreneurs or discredit financial sectors is not acceptable, as there are numerous responsible and judicious entrepreneurs and bankers in Bangladesh. Our voice is for responsible members of industries. Moreover, businesses need a transparent bankruptcy policy to exit respectfully if a venture fails due to reasons beyond the promoter's control. While developing such policy we must be cautious that such policy is not exploited by individuals with malicious intent.
FE- What are the expectations and suggestions of FBCCI on behalf of all businessmen on the upcoming budget?
SFF- Businesses create jobs, contribute to our economy and create wealth those are reinvested for expansions or new prospects. Our RMG sector is a resource that should be replicated in all export and domestic sectors. Bonded warehouse, lower debt equity ratio of project financing, back-to-back LC facilities on trade financing and incentives were deliverable mechanisms for growth in the sector. It is high time to look towards deliverable mechanisms of RMG sector to apply across our country. To solidify our economy further, for our MSMEs to be part of global value chain and we have to increase tax-GDP ratio and widen vat-tax net. However, exploitation of bonded warehouse facilities are unacceptable in today's Bangladesh with zero tolerance on corruption, it promotes unfair competition for our domestic companies in the industry producing same products.
Bangladesh's fiscal policy focus today should be on 2027 and beyond. Facilitation of increased trade and investment; ease of operations; knowledge sharing and prioritizing stakeholders' input in policy planning are imperative to a workable eco-system. It is unlikely to yield expected outcome, without creating backhaul to support best practices. 30 per cent year-on-growth projection on businesses is an impractical notion.
At middle income country status ATV, SD etc. regimes would not comply. Formalizing 30-40 % of our informal economy through an eco-system that supports the transformation is one of our fiscal policy planning mandates. FBCCI STPC advocates for an incentive regime in place of SD, RD etc. Vat rebate system, exemption of MSMEs to a practical level till they scale up and need to be compliant with their efficiency rather than proposed law dictating all business to obtain software from enlisted handful of companies. Moreover, what are the multiple vat rates, at what level they would be applicable needs clarity in our 2019-2020 national budget and our fiscal policy planning should be on our goal towards 2027, to create ease of doing business and strengthening fiscal institutional governance. FBCCI STPC also applies to 2012 SD Vat law that was deferred two years back for review. If the proposed amendments do not initiate to address above agendas of transformation it might not yield expected results. If I may elaborate, say a trade logistic solution company structures a project through global financing or grant, consultants of that given project would more likely propose solutions to the project initiating company. Bangladesh's policy planning should not be influenced by funding trail. Any organization or individual having direct or indirect link to the funding trail would have conflict of interest.
FE- What kind of work will FBCCI do, to support new and women entrepreneurs?
SFF- A new programme called 'FBCCI Tips' will work through knowledge sessions, to create awareness amongst new entrepreneurs. The biggest challenge, a new entrepreneur faces, has to do with seed money. Bangladesh Bank has numerous schemes accessible to new entrepreneurs and women entrepreneurs. And to address issues regarding the financial aspects, FBCCI, is keen on highlighting the products of Bangladesh Bank to newcomers. Besides, there are a lot of women representatives within FBCCI and we welcome and encourage women entrepreneurs.
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