Country must be back in business without delay

Amid worker unrest and insecurity in the industrial sector, entrepreneurs and bankers have urged the new administration to focus on rebuilding confidence in the economy.
Businesses suffered heavily because of street protests and internet blackouts with production disrupted and shipments delayed during the anti-discrimination student movement that toppled the Sheikh Hasina government on August 5.

The political turmoil in Bangladesh has significantly impacted the economy, eroding the confidence of both domestic and international investors. The police force, fearing reprisal attacks, was hesitant to return to work, further worsening the situation. Worker unrest fuelled more concerns later.
Now, Bangladesh must make sure that the country is back in business and also needs to set a communication strategy for channelling the information to the domestic and international business community, according to Syed Nasim Manzur, managing director of Apex Footwear Ltd.
Nasim Manzur and other entrepreneurs and bankers shared their ideas about short and long-term measures at a roundtable titled Current Business Challenges & Way Forward, organised by The Daily Star at its office in Dhaka yesterday.
Mahfuz Anam, editor and publisher of The Daily Star, moderated the discussion.
SECURITY AND UNREST

Speaking at the roundtable, Sk Bashir Uddin, managing director of AkijBashir Group, said the elephant in the room is the law and order situation. “Of course, I was personally almost assaulted in one of my factories,” he said.
Rupali Chowdhury, managing director of Berger Paints Bangladesh, described the “huge labour unrest” as “a dire problem” for the manufacturers.
With the police absent, the entrepreneurs are turning to the army but confusion remains over whom to talk to to resolve the issues raised by the workers, she said.
“So ultimately, they [entrepreneurs] do not know who to contact and how to run the factory. This is going to give a certain amount of uncertainty for the multinational companies who are actually investors. They are seeing that this kind of labour unrest happens and there is nobody to support them,” Rupali said.
REGAINING CONFIDENCE
Normalcy appears to be returning slowly to the industrial sector now with the workers and law enforcers getting back to their jobs, while army personnel have joined the efforts to ensure safety in the industrial belts. 
Nasim Manzur suggested ensuring safety in the five major industrial belts, including Ashulia, Narayanganj, Narsingdi, Chattogram and Cumilla so that no further untoward incidents take place in these industrial zones.
He mentioned that several factories were burnt out or vandalised, which impacted the production and business of these industries heavily as a section of people took advantage of the volatility.
For instance, production in nearly 20 pharmaceuticals factories has been severely affected due to the latest spell of labour unrest and a tyre factory, which used to meet nearly 60 percent of the domestic demand, was torched in Narayanganj, he said.
The government should hold a meeting involving at least 50 of the top foreign investors soon so they regain confidence in doing business here, said Nasim Manzur.
“I would like to recommend setting up a taskforce which would include major exporters, government, as well as some of our international partners, investors, buyers, as to what that communication strategy should look like,” he added.
Nasim Manzur, also a former president of the Metropolitan Chamber of Commerce and Industry, (MCCI) suggested removing any discrimination in the disbursement of credit from the Export Development Fund (EDF).
He also recommended overhauling the overburdened insurance sector and setting up priorities for reforms in key sectors.
Ahsan Khan Chowdhury, chairman and CEO of PRAN-RFL, said: “In terms of export, we are nervous because of unpredictability in Bangladesh.”
“We have to see how quickly we can make Bangladesh more predictable so that we can continue to fulfil our export demands. We have to involve all respective ministries and secretariats to this end,” he said.
About agriculture, he said the government needs to think deeply about fertiliser import and other needs of the farmers to reduce production costs. “We have to think how we can grow more agricultural products that have got the potential to reduce food inflation,” he said.
Bangladesh Bank Governor Ahsan H Mansur said business associations bear more responsibility for restoring confidence in the economy.
Industries are national assets and these need to be protected, he said and added, for the greater interest of the industries, the central bank is not freezing bank accounts of any business group.
The governor also emphasised putting an end to extortion and corruption. “If extortion can be stopped, the cost of doing business will fall a lot. A section of government officers accumulated a lot of wealth by using public offices like land registration and passport offices. These should stop.”
He assured that he would not deprive any business unit of its “oxygen”, namely the credit line.
Governor Mansur said optimism in the economic sector needs to be backed by credible steps as well. “Optimism will be generated with the work we deliver. ‘We’ means the government as a whole.
“There is a nervousness regarding export. There is no question about it. I have been getting calls from inside, from outside as well,” he said.
“The destruction at the Gazi Tyres factory is a sad affair. It shouldn’t have happened. It should have been protected,” he said, emphasising the need for political reforms. “Without political reforms, no other reform will be lasting,” the central bank governor said.
Mansur said there is a lot of misinformation, disinformation and also “some genuine concern which needs to be very clearly addressed”.
For example, he said he got a phone call from the US on Monday that some of the big companies were very much concerned and would shift their orders if some large factories were not allowed to operate.
“My answer to them was that not a single company has been prevented from operating. We have to fight those things collectively and also individually in our respective capacities,” he said.
Mansur also spoke about the formation of three separate taskforces for streamlining the banking sector.
AkijBashir Group’s Bashir said it is “sad” that the buyers are dictating the terms most of the time. “I think this needs to change,” he said.
Multinational banks are earning a lot of money just by confirming the credit of the local banks, Bashir said.  “This is an aggregate lack of confidence in the overall financial industry and this needs to be relooked.”
Ali Reza Iftekhar, managing director of Eastern Bank Ltd, urged the BB governor to revisit the Banking Company Act.
He said he was a part of the committee that finalised the act. But at the last minute when the act was about to be placed in parliament, many things were omitted and changed without the consent of the committee.
“So, I request the governor that we can relook at the Banking Company Act and try to re-establish those things.”
If the law is amended with recommendations from the industry, it will be richer and more effective, Ali Reza added.
Mahfuz Anam said The Daily Star will be a key platform to discuss all important business issues.
“Please don’t shy away,” he said, inviting the participants to suggest ideas that need to be covered in the newspaper.
“If the economy grows and can be more efficient, more productive, there are more jobs created, then Bangladesh moves ahead,” he said.
EASE OF DOING BUSINESS, DIGITALISATION 

Ali Reza also suggested measures for ease of doing business and to increase the cash flow in the banking system, as in some cases even Tk 5 lakh cheques are bounced back.
Selim RF Hussain, managing director and CEO of BRAC Bank, said the area that the country needs to focus on very strongly is real digitalisation.
“We need to learn from India: the cost of doing business, ease of doing business. The cost will come down significantly if everything will move into the official channels,” he said.
He said about 50 to 60 percent of cash is now outside the banking system. If everything becomes digitalised, similar to China, undisclosed income and funding in the unofficial sector will go away.
At the same time, the government’s revenue will increase when everything will be recorded.
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said the foreign exchange rate was not fixed timely. He suggested further strengthening the central bank for ease of doing business.
He also said the Bangladesh Investment Development Authority needs to act as the chief marketing officer for the country.
Land registration needs to be digitalised to curb corruption, he added.
Aameir Alihussain, managing director of BSRM, urged the government to ensure the accuracy of GDP growth, export, import and other data. “Inaccurate data gives a wrong message,” he said.
Mohsin Ahmed, CEO of New Zealand Dairy, said the government should set the urgency and priorities. The civil bureaucracy and police are shattered and they need to be revived for confidence restoration, he added.
Md Miarul Haque, a director of the Foreign Investors’ Chamber of Commerce and Industry (FICCI) and managing director of DHL Express, called for simplification of the customs procedures and for bringing more transparency in the business processes. He also suggested eliminating face-to-face interaction in business processes to curb corruption.
He suggested proper implementation of the Trade Facilitation Agreement to reduce time in business processes.
BANKS
Mashrur Arefin, managing director of City Bank, mentioned liquidity shortage as one of the major challenges in the banking sector.
He said that money outside banks has increased to Tk 2.9 lakh crore from Tk 1.84 lakh crore in 2021, which means “people have lost confidence in the banking system”.
“This isn’t helping us,” he said and added that the banking system was run by S Alam Group – a fact that led the people to take away their money from the banks out of fear and anxiety.
Sohail RK Hussain, managing director of Bank Asia PLC, said the banks must have the right people on their board of directors for a better banking sector. The country needs to ensure that the central bank is independent in a true sense, he added.
Rizwan Dawood Shams, managing director of IPDC Finance, said his company is working with a reasonable level of non-performing loans and credit rating ratio but is not allowed to take government deposits.
“But many of the banks having high NPLs are still allowed to take government deposits. That’s very discriminatory while we are operating in the same industry.”
TELCOS AND TECH
Yasir Azman, CEO of Grameenphone, said that although telecom companies act and innovate locally, and solve the problems for Bangladesh, they need foreign investors to bring global best practices in technology.
He recommended restoring investor confidence in the country and presenting the nation as an opportunity for them.
According to him, the industry’s main challenge is the heavy tax burden, with a corporate tax rate of 40 percent. “We actually at times get confused about who our regulator is. Our regulator is also a collector.”
He said as a CEO for the last four to five years, he had to spend more time on resolving financial disputes with the regulators than on focusing on innovations.
Rajeev Sethi, CEO of Robi Axiata, said the government needs to think about what is the role of the telecom industry and how to treat it.
“Is it a cash cow like what we have been treated in the past? Or are we a force multiplier? We believe the latter. Is it just to maximise the revenue or is it a maximum dividend for the people? I think it’s always better in case we do the latter,” he said.
“If a customer has to consume services worth Tk 100, they have to pay Tk 140. The same number on average is around 15 percent across the region.
“Why should that happen in a country where the real (mobile) penetration is less than 60 percent? If you look at internet penetration, the real penetration on mobile is less than 40 percent. On top of that, this year SIM tax increased from Tk 200 to Tk 300,” he said.
Erik Aas, CEO of Banglalink, said telecom operators can support digital financial inclusion by offering mobile financial services.
Allowing mobile network operators to provide digital services can increase competition, benefit consumers, and help more unbanked people join the financial system, he said.
According to him, free access to information is essential for building a tech-driven nation.
Restrictions on news, education, and entertainment through OTT platforms hinder digital growth. Encouraging access to news and education on digital platforms is crucial for creating a knowledgeable, tech-savvy society, Aas said.
Syed Mohammad Kamal, country manager for Mastercard, said payments were heavily hit in the July-August period.
He said all sorts of payments, from travel to grocery to restaurant, eating out, and e-commerce, are dropping.
“If the confidence level of the general mass will not build up again, bringing the digital economy back on track might become really, really difficult,” he said.
Raihan Shamsi, chairman and CEO of Devo Tech, said the IT and IT service industry had failed to meet the $5 billion target despite the industry’s huge potential. “This student-led pro-youth government should focus on this IT industry which not just can create employment, but it can also help our government in export diversification.”
He said India exports close to $200 billion in this industry alone, employing 6 million people. “Here we have made some progress. There were a lot of taglines in the past as we couldn’t progress much.”
He said Chief Adviser Professor Muhammad Yunus’s global reputation can help rebrand the industry.