Like many other developing countries, Light Engineering sectors(LEIs) is an important manufacturing sector of Bangladesh that occupy strong and vital position in the economy of the country. It prudently acts as feeder or support industries to all other industries to all other industries and plays a vital role in the socio-economic development of the country. These industries have potentials to make significant contribution towards technological and economic development along with wide opportunities for employment generation. Small industries are engaged in manufacturing various import-substitute products and thus saving valuable foreign currency. Manufacturing and processing activities in small and micro engineering enterprises contribute to the livelihood of huge number of poorest citizen.
There are certain socio-economic advantages that the LEIs enjoy over the large-scale industrial units. The advantages are: lower capital investment, lower job-creation cost, low risk factor, shorter start-up period, lower capital output ratio., less management problem, lower energy cost, moderate infrastructure requirement, promotion of entrepreneurial talents, more environment friendly production process, and promotion of agro-industrial linkages.
In Bangladesh, there are hundreds of roadside light engineering workshop scattered all over the country, starting from small towns to metropolitan cities like Dhaka, Chittagong, Rajshahi and Khulna. Some are equipped with only an electric small size welding machine, various types of horizontal, vertical and turret lathe machines, gas, electric and ac welding sets, various type of drilling machines and grinders, etc. These small workshops make substantial contribution to gross domestic products (GDP) and create employment opportunities. But unfortunately these industries could not prosper and develop as it should have been. Due to many reasons large numbers of small industries and enterprises in the country had to curtail or stop their activities.
Light Engineering Sectors in Bangladesh
Perspective of LEIs in Bangladesh
The SMEs sector-as a whole provides over 87 per cent of industrial value added goods (1) There are lack of information about total number and types of small firms existing presently in Bangladesh. However, according to survey on small industries done by Bangladesh Small & Cottage Industries Corporation (BSCIC), it was revealed that there were total 197 types of small industries with total 38294 industries in the country (BSCIC Survey report, 1994). (2) An estimate shows that presently there are about 60,000 small industries in the country. Among them, Light Engineering Industries are deemed to be approximately 25% i.e., LEI are about 15000. In addition, evidence suggests that there are over 347,000 cottage industrial units and a large number of handloom and power loom enterprises. But as per report of BEIOA (Bangladesh Engineering Industries Owner Association), there are total about 40,000 LEIs in the country generating 50,000 employment per year.
Definition of Light Engineering Industries(LEIs)
LEIs corresponds to those engineering industries that posses smaller capital investment and falls in the gamut from cottage industries to small industries (cottage and small industries have been defined in Industrial Policy –2005 .In Industrial Policy 2005 the Light engineering sectors has been included in the list of thrust sectors category. LEIs includes- all kinds of ferrous and non-ferrous metal mechanical products, machinery (electrical and non-electrical), spare parts, equipment, instrument, parts of mechanical system, electrical and electro-mechanical products, electronic products, machine parts or parts of manufacturing process that is made of ceramics, rubber, plastic, wood, glass etc. Repair, maintenance, erection, installation, fabrication, support service, consultancy etc. are service variety in the light engineering sector. In Export Policy 2003-2006 LEIs is considered as one of the highest priority sector.
Problems of Light Engineering Industries in Bangladesh
Raw materials:
High price of raw materials
Required raw materials are not Unavailability of the required raw materials
Scarcity of quality raw materials in the local market
Finance:
Lengthy and cumbersome procedure to receive bank loan
Difficulties to get required amount of bank loan
Non-availability of sufficient working capital
Low tariff rate of imported goods that are competing with the local ones
Difficult to get financial help for technological innovation, development and for big investment
Non-availability of venture capital
High rate of interest on bank loan
Innovation promotion and management:
Non-availability of metal testing facility. Difficult to identify the metal and its quality
Non-availability of efficient and skilled manpower in many cases
Sometimes, space is not available or sufficient for extension of the workshop
Lack of specified policies for price determination of a product
Difficulty to get Govt, contracts.
inadequate electricity supply
Non-availability of heat treatment facility
Durability of the products become low due to lack of tempering facility
Lack of skilled manpower required for product diversification
Due to limited purchasing capacity of market it is not possible to produce quality products with full production capacity
Lack of designing capability
Manual in Bangla on production and technology is not normally available in the market
Lack of standard & quality of product
Lack of knowledge how and where to patent the product
Light Engineering Sectors in Bangladesh
Marketing
The price of local goods is high in comparison with foreign goods due to high production cost of local goods. Thus local goods cannot compete with the foreign goods
Lack of facility or capability of the owner to disseminate information about the workshop and its products.
Priority sub sectors of LEIs may be promoted:
The following sub sectors of LEIs to be upgraded so that these can produce export quality products:
Automobile Sector: Automobile spare parts has got great export market potential around the world. This sub sector includes Cylinder kit, radiator, engine filters etc.
Marine engine spare parts: Marine engine spare parts includes gear, pinion, crankshaft, axle, engine head etc.
Railway spare parts. This sub sector includes railway radiator, railway rolling stock and other 600 parts are being produced by LEIs presently.
Agro-based and Agro—supportive sector: This sub-sector includes plough head, irrigation pump, trashing machine etc.
Machinery, equipment and spare parts of various sector: This sub sector includes spare parts of various industries, capital machineries, accessories etc.
Electrical Machineries: Electrical machinery such as AC, fan, electrical appliances, cooking unit, spare parts, and machine for production of electrical bulb etc.
Household machinery products: Household machinery products such as wheel chair, mechanized bed, mechanized / hydraulic chair etc.
Priority areas for capacity development:
Capacity may be developed in the following areas on priority basis:
Modern foundry development
Heat treatment facility
Sheet metal products manufacturing facility
Alloy steel production
Alloy, CI & DI (Ductile Iron) foundry establishment
Introduction to CAD, CAM, CIM, CNC etc.
Mold and Die making
Use of EDM, Pantograph, Copy milling machine, CNC machine, Wire cut, Machining center
Surface treatment such as galvanizing, nickel coating, Powder coating Chrome coating
Die casting products
Recommendations:
Following recommendations may be considered to promote the light engineering sector of the country:
A definite policy for Light Engineering Industries (LEIs) should be prepared.
Business / technical information is to be readily available to the enterprises to improve their performance. Networking among the concerned trade Associations and R & D Institutions should be established in order to collect, compile and disseminate the information for ready reference for the entrepreneurs. Data Bank for the LE sector may be created.
Necessary measures are to be introduced to upgrade the institutional structure of the LE enterprises.
Appropriate raw materials required to produce quality products should be identified and made locally available.
Government’s decision to allow duty free import of standby Generators should be continued in future until such time it is possible to ensure reliable power supply.
Product/ production technology should be upgraded from conventional to modern level as per market demand. Technical support services should be provided to the local machinery manufacturers to enhance their capability for machine designing.
Material testing facility and R & D facility should be ensured.
Light Engineering Sectors in Bangladesh
Awareness campaign on standardization and quality of the products should be made.
LEIs require exposure to modern machines and technology. Support should be given to LEIs in this regard. A technological support cell should be established under Ministry of Industries to ensure the feed back. Workshops, Seminar, exhibitions and discussions with foreign suppliers may also be arranged.
Entrepreneurial culture should be established so that their capability can be upgraded from the average level to excellent level.
Technicians working in LEIs are quite innovative. But as most of them do not have formal technical education, they do not understand engineering drawing and are not familiar with scientific methods of measurements, limit, fit, tolerance etc. Formal technical education should be ensured for the personnel of the sector.
Technical training should be provided to the personnel of LEIs to improve the quality of their work. Training manual written in a simplified way in Bangla should be given to the trainees so that they can use these effectively.
Necessary provision should be made to make the LEIs familiar with VAT, Tax and other documentation. Knowledge on safety measures, hygiene, environment pollution etc. should also be ensured.
The management of the industries should be given enough tools and knowledge for reaching foreign markets, preparing price quotations, selecting foreign distributors/ agents, documentation, Letter of Credit, shipping and all other tasks related to export.
There is a need to consider friendly financing policy for the LE sector. Extensive financial support should be made to the sector. LE sector should get the facility of EPF.
There should be arrangements for periodic/ permanent exhibition of locally produced engineering products in the country. Permanent Display Center may be established for LE products.
Periodic professional training courses should be organized for capacity building of the LE sector.
Continuous searching for export in global markets should be made. Frequent visit to developed countries and participation in int. trade fairs may be helpful to get experience on using modern technology and get export orders.
Light Engineering Sectors in Bangladesh: Light Engineering Sectors in Bangladesh: Light Engineering Sectors in Bangladesh
Bangladesh is one of the most densely populated countries in the world. Nearly 80 percent of the people live in the rural areas and the majority of the rural people remain unemployed for and under employment some months of the year. More than half of the rural people are landless or nearly so and another 25 percent find it difficult to ensure subsistence from their cultivable land and need to seek supplementary sources of income. About three-fourths of the rural households are dependent totally or partially on the market economy, for their livelihood.
In the sixties, the percentage of the poor was around 25. During the last three decades, it has jumped to over 60%. A recent BIDS study shows the condition of the absolute poor in the country, by and large, has remain static. Poverty is the condition that is said to exist when people lack the means to satisfy their needs.
To determine the elements of the basic needs, the same can be defined narrowly as “those necessary for survival” & broadly as “those reflecting the prevailing standards of living in the communities”. The first criterion would cover those near the border line of starvation, the second would the people whose nutrition, housing & clothing, though sufficient to maintain life, do not measure up to those of the population as a whole. Poverty is associated with poor health, low level of education, inability or unwillingness to participate in society. Whatever definition one uses, authorities & laymen equally agree that the effects of poverty are harmful to individuals & to the society.
Poverty may be classified as:
Cyclical Poverty
Collective Poverty
Case Poverty
Land is the main productive asset in rural areas; it represents both economic and social status. According to the agricultural census 1983/1984, about 56.5 percent of the rural households are effectively landless with 8.7 percent owning neither homesteads or cultivable land, 19.6 percent having homesteads but no cultivable land and 28.2 percent owning homestead and upto 0.2 ha of land. Landlessness is increasing rapidly as a result of population growth, river erosion and various other social and economic factors.
In the backdrop of the prevailing rural scenario, the prime needs for rural development in Bangladesh are productive employment and income generating programs in both farm and non-farm sectors along with the development of agriculture and basic infrastructure in the rural areas. The primary vehicles for the promotion of such rural development will be local level institutions within the principle of participatory development as far as possible.
Bangladeshi Farmer
ROLE OF BUSINESS COMMUNITY IN POVERTY REDUCTION
Agriculture remains the largest sector of the economy occupying three-fifth of the employed labor force and producing nearly half of the economy’s output. The role of Business Community is vital in expansion of almost all the above-mentioned sectors in any country or society. The business community can bring out technical revolution, new and modern techniques can increase productivity by reducing cost and getting more output or performance.
Poverty is a multi-dimensional phenomenon whose dimension is by no means reducible to any single indicator. Poverty alleviation calls for multi-dimensional approach, such as nutrition, health and sanitation, housing, education, personal security etc. For poverty reduction, macro-economic policies for development and technological development strategies have to be appropriate for our socio-economic background, general level of technical skill, and our goals of developing rural Bangladesh. Businessmen, as a prime profession, who are relentlessly making contribution towards national growth and creation of new resources, seek for their legitimate role in poverty reduction efforts. This role lies in the linkage between the approach, strategy and program for poverty reduction and the scope of professionals and businessmen.
By their very position with respect to production process and relations, the businessmen contribute directly to economic growth. Nevertheless, through continuous R & D activities, we business counterparts have to play an indispensable role within the framework of formulation of strategies for technological development for poverty reduction as well as converting the principles of science, acquired knowledge and experience to develop local technology. All the above activities that contribute to poverty reduction dependent on investments of business entrepreneurs. Thus, businessmen can play a major role in poverty reduction of the country through promotion of small and medium sized industries, which can directly create employment opportunities as well as help poverty reduction by contribution to the growth of the economy.
GOVERNMENT OBJECTIVES AND STRATEGY FOR RURAL DEVELOPMENT
Poverty is the most pressing problem in the rural areas of Bangladesh. A rural development plan must continue to effectively address the poverty problem. For this, the plan has to pursue an employment-led growth policy. The focus of the policy would be to promote greater opportunities for the rural poor for productive employment in both farm and non-farm sectors of the economy.
Appropriate strategies and effective policies for rural development are needed for the realization of the objectives. For the development of rural economy, the Government formulated the strategy of Rural Development Projects on addressing the following:
Development of physical infrastructure including roads and markets.
Irrigated agriculture, drainage and minor flood control works.
Production and Employment Program (PEP)
Keeping alleviation of rural poverty as the end in view, the objectives of the Rural Development Institution (RDI) sector under FFYP are to:
Reduce rural poverty by means of increasing gainful employment and income opportunities on a sustained basis through expansion of the productive sectors;
Develop rural institutions;
Improve technology and skills for productive activities and ensure better access for the rural poor to the means of production;
Facilitate agricultural development through institutional support and expansion of irrigation;
Improve basic physical infrastructure (Roads, markets) in the rural areas;
Promote participation of women in rural development
For rapid poverty reduction, the Government’s priority is to develop the rural areas where most of the poor people live. This requires accelerated growth of agriculture and the rural non farm sector. A rapid agricultural growth will sustain high growth with better capacity to reduce poverty through enhancing rural wages, creating synergies for diversifying the rural economy, and enabling the supply of low-cost food to improve nutritional status and food security of the people.
Encouraging agricultural growth requires various policies ranging from new technology to credit for small farmers. The past growth in agriculture was helped by new high yielding variety (HYV) technology, particularly in rice, in which both the state and the market played important roles. The Government would continue its pro-active role in key public goods in agriculture particularly in improving the ability of the farmers to adopt new technology and providing appropriate mix of incentives to pursue profitable operations.
The recent growth of agriculture was greatly influenced by macroeconomic and sector specific policy changes. Reforms in trade and exchange reate policies created favourable incentive structures and dismantling of state interventions, market-oriented reforms and reduced regulations favoured growth in agricultural production and productivity. The reforms led to faster growth in minor irrigation, increased the supply of fertilizer and seeds, helped in wider adoption of high yielding varieties (HYVs), and encluraged the farmers to go for more rational input use and production decisions. The Government’s priority would be to intensify efforts such that positive achievements are expanded and the constraints limiting their potential are resolved.
Rural Bangladesh
PROPOSED STRATEGY FOR IMPLEMENTATION OF RURAL INFRAST-TRUCTURE DEVELOPMENT ACTIVITIES AND ROLE OF BUSINESS COMMUNITY
In the process of construction and maintenance activities of rural infrastructures, the following strategies may be followed by the engineers and business community:
Directly involve the landless groups / people in construction and maintenance of rural infrastructure in the form of Labour Contracting Society (LCS) which has already been experimented in various RD projects.
Ensure that landless groups of poor men and women get maximum employment opportunity under the contractors and they are paid fair wage.
Ensure wider participation of rural infrastructure and keep certain activities reserved for the destitute women.
Impart skill development training to the rural poor involved with construction and maintenance of rural infrastructure for further development of their competence.
PARTICIPATORY MODEL: EMPOWERING THE POOR
Participatory development model calls for empowering the poor, to recognize their inalienable right to decide their own destiny and their access to education, health, sanitation, housing, employment and credit facilities. To ensure these rights there should be structured or institutionalized arrangement at the grass root level. These necessitate building and strengthening of local bodies like counties, municipalities, union etc. with elected representatives in all tiers. Development cannot be thrust from above. Development must originate from those for which it is essentially meant. This means that there should be first of all firm political commitment for poverty alleviation. Politics and development are inter-related. Politics of development and production is the main pillar for building effective bridges with the masses. Proper political and social atmosphere is the sine qua non for development. This will generate mass awareness for development at the lowest level and will thereby ensure social justice.
The participatory development model presupposes the working people as the main component of all development activities. Under this model, human being is not the problem, rather they are the keys to problem solution. Sustainable and meaning full development only takes place through the optimum utilization of human creativity and productivity. The Peoples Republic of China achieved tremendous progress by following this model. Mexico, under President Salinas, was also deriving rich dividends in the same way. In an interview with Readers Digest (August 1992 issue) President Salinas explained the inherent philosophy of his solidarity program which aims at alleviating poverty. He said- “Trust the people. In the past we relied on the central government to determine what the poorest people needed. Now we have reversed this process. No longer will official in Mexico City decide the needs of the people in the rural areas. Local, democratically elected committee, how to use some of the proceeds of the privatization and savings from debt re-negotiation to have running water and electricity, to builds schools and clinics and to pave roads. All of these decisions that people, not bureaucrats are taking today.
In Bangladesh, where we will be able to empower and trust the people and not depend on the bureaucrats in the capital city, a breakthrough can definitely be achieved in the prevailing poverty situation i.e., our development initiative should be target-oriented. The Bangladesh Economics Association in its 10th Biennial Conference has, therefor, called for national consensus by effectively involving the government, the opposition, industrialists, businessmen, volunteers (NGOs), the peasants and the workers. The Association was of the opinion that national participation in the country’s development process was minimal. It was some sort of a dictate from the bureaucracy-oriented government as per the prescription of donor countries and agencies. Poverty alleviation will continue to remain elusive if this process persists. Union councils, Thana councils and Zila councils should be so constituted with people’s representatives that they are able to function as independent decision-making agencies without bothering for dilatory approval. When this can be done, projects will no longer remain unimplemented.
POLICY FOR POVERTY REDUCTION
To remove poverty the following policy outlines needed to be implemented on top priority basis and without any further delay: –
Re introduction of farm subsidies to the extent of at least 50% of the value of the products.
Strong price support as in Thailand.
Refixation of the prices of agricultural inputs and ensuring their easy and cheap availability to the farmers.
Mechanization and modernization of agriculture through intensive research and extension programs for increasing yields.
Setting up of agro-industries like food and fruit processing plants, Agro- machinery factories, extension of irrigation facilities, rural electrification etc.
Change of cropping pattern, switching over to more profitable produce like vegetables, fruits, livestock, poultry, fisheries etc.
Development of basic infrastructure likes road highways and transport.
Skill development among farmers through education, healthcare, family planning, training and easy access to information through radio, TV, cinema, telephone etc. as in South East Asian countries Japan and South Korea.
Setting up of raw materials related industries in the rural areas, which will galvanize rural economy.
Formation of rural co-operatives, restructuring and reorganizing credit facilities and arranging better marketing of agricultural produce.
Forming agri-food consortia with the SAARC countries to gain comparative advantage and better bargaining clout in the international market.
The measure noted above fall within the category of targeted development. Since most of the poor live in the rural area. Unless agriculture is developed their condition will not improve.
Tea Garden in Bangladesh
APPROACHES TO POVERTY REDUCTION: The poverty reduction program includes:
Poverty reduction through enforcing higher investment in social sector.
Poverty reduction through fostering an accelerated sustainable growth process.
Poverty reduction through promoting targeted income and employment generating programs designed for the vulnerable segment of rural poor.
The Engineers are the key element for the timely execution of all development programs of physical infra- structure, setting up of new industries of small & medium scale, ensuring protection against natural diseases etc. But for the context of poverty alleviation, 40% of the rural & urban families should be the target of all national & local poverty alleviation efforts. Poverty alleviation programs must be based on the smallest social units in rural areas i.e., Communities, Upo- Zilas, Unions & Paras.
Small-scale rural food industries such as Bakeries can employ 10-15 woman of the village; lozenge/toffee-making unit may employ 20 workers. Private fish-tank can be developed, and a few poor persons can be benefited from fishing. The government “beel-area” borrow-pit may be developed into large/small fish tank. The landless population may be given the opportunity to get good and regular income from fishing, Duck rearing,
Growing banana trees, pineapple and vegetable on the banks of the tank. A large number of poor families may use the unused land near the house from ½ decimal to 1 decimal size can grow vegetables 3-4 times a year. This may be a good source of earning. Intensive scheme for rearing cattle, cows, goats are to be undertaken for a protein source.
Productivity of the small land holding of the poor can be doubled or tripled through manual irrigation by “treadle pump” or hard pump ensuring multiple cropping, better inputs and technology; the technology for holding the high yielding variety of grain for long term storage is still unknown to our farmer. Small-scale storage bins & new technology for storage will help the poor to store their product till market prices are advantageous.
Business communities will work hand in hand with the Engineers in developing the following improvements, which will promote the rural areas & strengthen the local economy.
Mechanized crop drying and releasing/reclaiming the drying yard especially at the mill premises for production.
Improved and appropriate technology for seed production, storage, holding the fishing upto 24 hours of marketing, simple irrigation and harvesting tools (produced by BARRI) and so forth.
Use of solar energy and other non-conventional energy sources.
Country boat mechanization & improvement of the mechanized country boat.
Setting up of light engineering industry and strengthening the existing.
Rapid expansion of the cottage industry.
Development of small industries at the rural level.
Out of the above tasks the effective of improvement of country boat mechanization, light engineering industries and treadle pump is given below:
After mid 1980’s the situation in country boat sector changed dramatically. Mechanization has taken place on large scale with the help of imported low-cost diesel engine for irrigation almost in an indigenous fashion by the boatmen themselves without any assistance from outside. This change gives the boatmen increased financial benefit.
The gross income has almost doubled after mechanization. On the other hand, contrary to believe, there had not been any major unemployment as a result of mechanization. In fact, there has generated additional activities due to mechanization.
The engineering section of Bangladesh Small and Cottage industries Corporation with its engineering decision took some equal credit projects in Dhaka area in 1985 for the strengthening of the efficiency, productivity of these industries. There were some training components in the program also. Out of total credit amount of Tk. 50 million, Tk. 37.30 million given to 173 industrial units of Dholaikhali (Dhaka) area & Tk. 6.6 million to 55 industrial units of Zinjira (Suburb) area. The loan was given purchase of new machinery & as an operational capital.
The decision about which economic activities, can be undertaken will depend on the physical resources available in a local area, the ability of those implementing the poverty alleviation projects to mobilize local society for these activities, market for small industry products and the like. Always the local context must determine what activities are viable and are most economical to promote. Program taken they do not suit the local context.
Rural Bangladesh
Finally, we can state that, the Businessmen can play tremendous role in poverty reduction in situation that is characterized by the following factors:
-strong political will,
-adequate appreciation of engineers’ & business community’s role
-ensuring Engineers & business community of unfettered opportunity to contribute
-favorable policy framework
-necessary resources allocation
-strict accountability
We are striving earnestly to make FBCCI into a more dynamic, internationally counted, truly representative & powerful organization of the private sector. But the challenges are enormous. The country is currently undergoing an unstable situation. The social conditions are in a deplorable condition. Level of erosion of social capital & corruption in society are beyond belief. Infrastructure is inadequate. Over-centralization of power as well as absence of rule of law & of human rights have taken toll on transparency, accountability & obligation of responsibility. On the other hand, interdependence, interaction & interfacing of new technologies, globalization of culture & economics is posing unprecedented threat to our daily lives, our trade & commerce as well as our means of production.
To face the challenges & play its proper role, the private sector needs a conducive environment & a level playing field. But the reality is opposite. Taking advantage of political unrest, gross social in-discipline, anti-social activities & anarchic tendencies have assumed immense proportions. Dishonest people are questioning honest people, corrupt people are putting the righteous & the dedicated people on the dock. Plunderers of national wealth are undermining those who are involved in creating wealth for the nation. Ignorant & uneducated people are throwing the gauntlet at knowledgeable & qualified society.
If this situation continues, then the philosophical fundamentals constituting the Republic will become defunct & the country may become unfit to govern.
Nevertheless, FBCCI as the vanguard of the private sector & the apex body of business organizations will continue to do its utmost, along with other civil society organizations to remove all obstacles standing in the way of economic growth & productivity. In doing so, it will be guided by a moral philosophy in promoting trade & commerce in line with sustainable socioeconomic development.
We firmly believe that by our combined efforts, brisk vigor & dynamism will enable us to return to the nation’s economy. Investment will increase. Wealth will rise. Employment opportunity will be created. Climate will change so that individual members of the society may be able to utilize their knowledge & skills in production & nation building mission. In effect, social disturbance will die down. Poverty reduction will only be possible then.
Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh
In Bangladesh, as a developing country, there is now a growing realization that a vibrant and dynamic private sector is the key to economic progress and sustained growth. The East Asian miracle exemplifies as to how the government can accelerate progress as a partner and as a facilitator. Developing countries, including Bangladesh, have come to increasingly rely on market forces to guide their development strategy. Efforts are being focused on the promotion and supporting of the private sector and creation of an enabling environment for it to flourish and maximize its contribution to economic progress within a business friendly and equitable framework. Bangladesh has been increasingly relying on this philosophy as a strategy for growth. As a consequence of this, the share of the private sector in total investment has risen. Public sector reforms will continue to be undertaken as a complement to the private sector so that it can function more effectively and up to its potential.
Private Sector in Five Year Plans
The growing emphasis on the private sector is reflected in the fact that the share of the private sector investment increased from 11 per cent in the First Five-year Plan to 44 per cent in the Fourth five years Plan. The performance of the private sector was better than what was planned for in the Fourth Plan. In fact, the share of the private sector in the total realized investment was 54 per cent of the total investment in FY95.
In view of the intensification of private sector-oriented reforms, it was anticipated that the private investment would increase substantially during the Fifth Plan period. An amount of Tk.1100.58 billion (56 per cent of the Plan outlay) was projected as private investment in the Fifth Plan.
During the Fifth Plan, it was said that the private sector is the main engine of growth. The public sector will act both as a promoter and as a partner rather than just as a regulator and will facilitate the growth of the private sector by providing improved physical and socio-economic infrastructure through regulatory and effective policy support measures.
The Fifth Plan provided a broad canvas and a framework in which the private sector can play an effective role in the development process for which an indicative guideline is given. The government will take steps to ensure the creation of an enabling environment through legal and administrative measures and infrastructure support so that the private sector can function and contribute according to its potential. The impressive growth registered by many high performing economies including that of East Asian ones has brought into focus some essential ingredients for development, namely the need to have a liberal market-oriented export led strategy along with the involvement of the government to provide necessary catalytic and effective support. The government may, where it is considered necessary, also participate in investment projects along with the private sector. Such ventures will normally be limited to areas where private sector is not forthcoming or where the government’s presence is desirable as a support to the private sector.
Bangladesh desperately needs rapid and sustainable economic growth to make a significant breakthrough in poverty alleviation. In the current development strategy, the private sector has to play a pivotal role in achieving the desired growth. We need to lift the economy from the current state of 5% plus growth rate to one of 7% in the short term and 9-10% within 2008. To attain such a growth rate the investment has to go up from the current level of 23.15% to 28% of GDP. There has also to be major structural change in the economy giving a leading role to industrial development, because for a country like Bangladesh with a low per capita income, heavy population pressure and limited agrarian base, development of manufacturing holds the major long-term hope of guaranteeing high level self-sustaining growth. The Fifth Five Year Plan rightly aimed at increasing share of industries in GDP from 9.28% in 1996-97 to 12.70% in 2001/02 raising the growth rate of the sector to about 14% from the benchmark level of 3.5%. That called for huge investment in the private sector. The Fifth Plan envisaged an investment of Tk. 298.78 billion during the plan period for the manufacturing sector accounting for 27.15% of total allocation for the private sector. It means that average annual private investment in manufacturing was to increase to Tk. 59.78 billion against benchmark level Tk. 33.40 billion. In an aid depleting global environment the big chunk of the investment has to come in the form of private capital inflows, that is, direct foreign investment (DFI).
The achievement of these objectives will depend on the following investment related factors:
– Congenial Policy Framework
– Growth of a dynamic and vibrant private sector
– Arrangement of adequate finance
– Enabling environment and efficient infra-structure
– Development of human capital
– Stable political environment
– Investment opportunities.
Changed Policy Framework in Bangladesh Economy
During the last 30 years the economy of Bangladesh has witnessed fundamental changes in economic, industrial and trade policies. At the time of liberation, Bangladesh inherited a mixed economic system. But as a natural consequence of wide-spread destruction and abandonment of industries due to Liberation War as well as on account of change of government policy, the public sector acquired a commanding position. The government nationalized various industries, business enterprises and financial institutions exceeding Tk. 15 million in fixed assets. A total of 725 industrial units were nationalized and placed under the management of 10 public sector corporations. But faced with pressures on financial and management resources, the government soon initiated the process of gradual expansion of the private sector. Private investment ceiling was raised from Tk. 2.5 million in 1973 to Tk. 30 million in 1974. It was further raised to Tk. 100 million in 1975 and totally withdrawn in 1978. By now, the policy has completely been reversed assigning private sector the dominant role, although a heavy burden of losses on account of the state owned enterprises (SOEs) is causing serious haemorrhage on the nation’s economic vitality. The government has also been implementing structural adjustments and liberalization policies enhancing the role of the private sector and opening the economy to free competition.
The Mirror of Bangladesh Economy
Potentials and Performance of Private Sector
Though relatively new and inexperienced, the private sector has already demonstrated its capability and buoyancy in the economy. A new generation of private sector entrepreneurs has emerged in Bangladesh who are well educated, hardworking, capable and eager to face the challenges of the globalized competitive market. They have proven their mettle in all sectors where they had opportunities to work with freedom and where the Government played the role more off a facilitator than a controller. The booming industries in ready-made garments, knitwear, shrimps, leather, ceramics etc. are clear indicators of the latent capabilities of the private sector and they also act as pointers to what the Government should do in capturing these potentials. It may be in order to show a few illustrations of promising performance of the private sector.
Firstly, private sector’s share in investment shows a rising trend increasing from 10.27 percent in 1990-91 to 15.61 percent of GDP in 1999-2000 and 16.78 percent in 2001-02 while that of public sector stagnates between 6-7 percent.
Secondly, private enterprises are more efficient than state owned enterprises in respect of utilization of assets for generation of employment and value addition. Owning 37.62% of fixed assets private enterprises accounts for 74.57% employment and 66.2% value addition while owning 62.38% of fixed assets the state owned enterprises (SOEs) account for only 25.43% of employment and 33.79% of value addition as in 1989-90.
Thirdly, the private sector performance is more spectacular in foreign exchange earnings from export. Out of the total foreign exchange earnings of US 5.59 billion in 2001-02, private enterprises represented more than 90% of the total export earning which has risen from 74.27% in 1990-91.
Private Sector in the Poverty Reduction Strategy
Under the Poverty Reduction Strategy of the Government, the private sector is the engine of economic growth. The Government will create an investment-friendly environment and act as a facilitator through pursuing policies to create a stable macro economy, improve law and order, promote good governance, maintain competitiveness, remove infrastructure bottlenecks, ensure cost effective fiscal and financial services, and provide market information and support services. With increasing role of the private sector, competition and transparent rules would be framed for protecting consumer’s rights and trust in the market, minimizing the cost of information and enhancing sustainable growth of the private sector. Women’s participation in private sector activities will be effectively supported both as participants in the labour market and as entrepreneurs.
Under the 1999 Industrial Policy, restrictions on private sector participation in all sectors except defense, nuclear energy, printing of currency notes, and forest plantation and mechanized extraction in reserved forests, have been removed. The Government is aware of the constraints hindering the growth of the private sector and would implement effective measures to remove the hurdles through effective and coordinated policies and actions. The key areas would be: infrastructure development (e.g. power, telecommunications, roads and ports), strengthened financial and capital markets, quality of the labour force, reduced costs of doing business by reforming institutional and regulatory framework, improved law and order condition, and better environment for foreign investment. Specific measures would be worked out in consultation with the private sector. For proper functioning of the private sector, physical improvements and management reforms in the basic infrastructure including power, water supply, port and telecommunications will be given priority along with private sector participation. The government would take effective measures to encourage the private sector to become gender sensitive, facilitate women’s participation in private sector activities and create institutions like childcare centres to facilitate women’s enhanced participation.
Private Sector in the Delivery of Social Services
There are several reasons why increased role of the private sector is perceived in the provisioning of social services. Neo-liberal perception that state organizations are predatory and inefficient, with rent seeking as the primary motive for the behaviour of the public officials, is dominant in current thinking. One offshoot of such a perception recommends privatization. While vigorous pursuit for privatization in the industrial sector is more frequently observed, outright transfer of responsibility in delivering social services to the private sector is not made due to presence of “public goods” agreement. However, inclusion of private and other non-government sectors are perceived to induce competition and make the state more accountable. With the latter perception, the World Bank document on Country Assistance Strategy for Bangladesh notes that, NGO partnership and stakeholder participation make up for weak, centralized public institutions and increase public accountability. As a part of long-term strategy, the WB therefore intends to support civil society and the private sector to help build constituencies that call for accountable and well-performing public institutions.
Participation of private sector in the delivery of social services, either on humanitarian grounds or for commercial motive, is a historical phenomenon and no single agency may be credited to have initiated it. However, awareness about it paved the way for a wide range of experiments; and these experiments have unfolded new sets of relations among various agents involved in the process. Thus, there is a need to have fresh looks into the classification of social services, roles to be played by the state, for-profit and non-profit private sectors, and by the civic society. Such ventures will help in designing a new set of rules of business to be put in place with a view to ensure greater social welfare.
Response of Private Sector in Globalization
Globalization is almost entirely market driven. The process has gained momentum and is based upon liberalization of trade, capital and currency markets. Private sector responded in full measure to opportunity thus opened up. The role and function of the private sector in globalization is obvious. Integration of national economies into a global market has been the work of multination stock market operators, currency traders and speculators motivated by profit. Business and industry has been the vital force behind innovations in production, distribution and marketing.
Reform measures undertaken by organizations like GATT, WTO, IMF, World Bank and individual governments provided the enabling environment in which individual companies and firms looked for better market for goods as well as for investment of capital. Among 200 biggest economic entities 160 are not states reflecting the command of private sector in to-day’s global economic activities.
In view of the above, private sector needs some assistance and facilities for playing its role in the development of the country. Those issues are;
A) Arrangement of Adequate Finance for Private Sector
The private sector of Bangladesh has a notable contribution to the industrial sector. But the industrial sector is currently starved of term lending. Institutional arrangement for meeting the credit requirements for industrial investment is grossly inadequate. The commercial banks are basically ill suited to meet the requirements of term lending for industrial projects. By the very nature of their functions the commercial banks are used to borrow short-term and as such lending for long-term would create serious mismatch between the assets and liabilities of the banks. So, commercial banks can’t be relied upon for heavy involvement in industrial project financing. Unfortunately the traditional development financing institutions (DFI) namely, the Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangtha (BSRS) are now virtually defunct. The government should devise new institutions and instruments for financing industrial projects. The experience with the investment companies is not also encouraging, as most of them are currently operating like retail bankers. The stock market can be an important source of mobilizing equity, but the present state of the stock market does not hold any promising outlook for mobilizing equity for new ventures. So, debt financing of new projects will remain an indispensable requirement. The government will have to mobilize on a priority basis funds for financing industries and develop an efficient mechanism for their disbursement.
B) Enabling Environment and Efficient Infra-Structure
Liberalization and market economy have exposed the domestic industries to global competition. But the private sector enterprises, although they have enough potentials, are grossly hamstrung by the absence of a requisite enabling environment to survive and thrive. Undoubtedly liberalization has brought in both opportunities and challenges. True, the enterprises can have easier access to inputs and can have share in the vast and growing global market under a liberalized trade regime. But the challenges are much more serious. Local enterprises are to face global competition from those who are more experienced and enjoy better infrastructure and other supportive environment. They have to be efficient in cost, quality and marketing. They need a level-playing-field which is improving but remains grossly inadequate in Bangladesh. The problems and inadequacies in infrastructure facilities in electricity, port, telecommunication, roads and highways need to be attended and improved on a priority basis.
C) Business-friendly Administration
The change of development strategy towards private sector-led growth and market economy does in no way mean marginalization of the role of the government. The experience of East and South Asian miracle economies shows that the government institutions played a significant role in enabling the private sector to spearhead the growth process. The growth and performance of a vibrant and dynamic private sector need a lot of support and facilities from the government institutions. There must be an efficient and business friendly administration. The facilities and services that an investor need are; among others, acquire land, have connection of electricity, gas, telephone, water and sewerage, clearance from local authorities and environment authority, port facilities, customs clearance, etc. These should be available promptly and without hassle. But what is the real situation? Are these easily available? The need for these are well recognized in government policy. There is no dearth of interest and intentions in the top leadership in government. It is an accepted and declared policy that government shall act as a facilitator. But there are problems at mid and operating level of the administration that in fact provides the service. The perception and mindset of them need change. Administrative reform is a must. Administrative efficiency is crucial in facilitating investments in the prospective sectors like power, gas, telecommunication and port development which have been opened for private investment and have already attracted a large number of foreign companies. But delays, indecision and lack of transparency in the bureaucracy in processing and finalizing deals are working as deterrents. We should show more professionalism in negotiation capability. Time and opportunity will not wait for us forever.
Bangladesh’s Journey to Economic Development
D) Development of Human Capital
The much talked about comparative advantage of low wages and cheap labour no longer holds well. The gap between developed and developing countries is now not so much of a resource gap, as it is a knowledge gap. It should be a matter of concern to all of us that this gap is widening rapidly. Our companies can’t survive simply by increasing output with the use of capital and so-called cheap labour. Productivity must be increased. To raise labour productivity investments have to be made in human capital. The source of competitiveness should continue to shift from labour intensive to more skill-and-capital intensive investment. But enhancing technological capabilities must propel that shift. We lack adequate trained accountants, technicians, engineers and managers. So the investment in human capital development should draw adequate attention of the government. It is heartening to note that the government has assigned highest priority to the education sector in terms of budgetary allocation. But the quality of education is deteriorating. Discipline and proper environment in the educational institutions must be ensured. Allowing student politics in educational institutions is a major cause disturbing the educational environment.
E) Stable Political Environment
Social and political stability is an indispensable pre-condition to development. Although there is a broad political consensus among the political parties of Bangladesh as regards economic policy of market economy and private sector-led growth, confrontational political programmes and activities like hartals, work stoppages and blockades are vitiating the peaceful environment for pursuing productive and new investment initiatives. These are discouraging domestic investment as well as keeping foreign investment at bay. There is urgent need for having a consensus among the political parties to abandon the programs of confrontations that impede development.
Economics and Politics
You are aware that we are going to face formidable challenges in every field of our trade and industry after 2004 under the WTO regime.
We also know that ‘the strongest link between economics and the real world has always been politics’. In any organised society there is a structure that simultaneously encompasses both markets and governments. Societies both poor and rich necessarily have their own economics and politics. The economics move the politics and the politics govern the economics; No ideology of markets can leave out governments or politics. If an economy is exogenous, it cannot but be unstable and unbalanced.
The economists in the past have long been evading the matter of dependence of economics on politics, and preparing models on the assumption of steady socio-economic conditions. Realizing the folly of that assumption, the economists now a days are taking into account interrelated aspects of social anthropology, industry, commerce, culture, and politics etc while making new economic models or policies. We have thus come to recognize that socio-economic development is most likely to be on positive dynamics when there is a balance of economic and political pioneering par excellence.
Currently in Bangladesh, the standard public response, indeed the only option available to the citizens in reaction to amoral practices, abuses of power, extra-constitutional behaviour and poor economic policies of successive governments is to elect one of the two major parties, in alternate tenures. They both are widely perceived as autocratic in their conduct of state affairs, without caring much for a democratic process or the rule of law. The democratic ritual of transfer of power from one party to another, now badly needs to be replenished by a moral philosophy which would seek real “solutions to social problems,” in the least by advocating a greater balance of power among existing social groupings. Only if rights and obligations are redefined to reflect such a balance then private sector can do the job entrusted to them in efficient manner.
Economic theory teaches us that a classic liberal society leads to a maximum economy: Contemporary economic indicators clearly show that the distribution of both wealth and income is more skewed in less developed and less democratic societies than in more developed ones, and that distribution of income tends to become more egalitarian with economic growth. Less developed countries have certain characteristics in common, like excessive power in the hands of rulers and ruling parties. Holders of excessive political power accumulate economic and financial resources excessively and prevent productivity of the people and the economy from functioning optimally, thereby preventing the maximum possible production of goods and services. They prevent balanced growth of rules and regulations for the market forces to function properly, or prevent the market from functioning by excess of rules and regulations. They prevent the diffusion of power among the social groupings, and allow corruption unabatedly.
Therefore, it is imperative that in order to achieve full economic potential, to reduce income inequality, reduce the gap between the rich and the poor, and to reduce poverty, the civil society which includes economists as much as businessmen and trade unionists, must work hand in hand to remove obstacles and impediments to our production process and economic growth.
The success or failure of any country over the next few decades hinges on economic growth, which requires profound change in our society. We must identify the areas in which change would help economic performance. The most important of these are:
– Diffusion of power by way of distribution of constituted authority to various social groupings;
– Constitutional reforms to dilute the concentration of excessive power in few hands or few focal points through proper checks and balances, so that a small elite does not possess the power to direct all aspects of citizens’ lives;
– Decentralisation of power by establishment of autonomous local government with adequate political and financial devolution;
– Reform of electoral process for comprehensive representation;
– Breaking the nexus between politicians, criminals and the police;
– Eradication of Mastaani Chandabazi (extortion) culture from politics.
– Observance of vertical to horizontal accountability necessary to liberalise polity; (Rulers must become more accountable to their constituents. Investors, traders and financiers must become more accountable to one another for the proper quantity, quality and prices of their merchandise, for payment obligations, and for their promises).
– Complementary formulation of fiscal and monetary policies;
– Enforcement of contracts freely negotiated by independent parties with the full force of law by the state;
– Introduction of international standards in accounting; (Government monopolies, and private businesses often do not adhere to standards of accounting and auditing necessary for their transparency to creditors and stockholders. Strict rules must be made and enforced by the state).
– Redirection of political confrontation and political violence, if not altogether eliminated by a process of conflict resolution;
– Elimination of ambivalent laws and practices of arbitrary enforcement; (Many laws are unclear and antiquated. Frequently a law, on the books but defunct and widely ignored, is suddenly enforced against a political opponent or as a rent-seeking tool).
– Improvement of law and order situation; (Crime rate must be reduced. The moral case against crime is beyond dispute. Our civil society, however, hardly takes into account the effect of crime on economic performance. Bangladesh in all probability will continue to have a high rate of crimes for another generation, but if the crime level is not reduced to a tolerable limit it will impose a grave burden on the competitiveness and economic performance of the productive organs of the polity and render the country unfit to govern).
– Enforcement of a strong Human Rights regime; (A large degree of personal cruelty is found in Bangladesh like torture of suspect felons and repression of political opponents. Constitutional responsibility must be placed on those in power so that human rights are protected, and not violated without being punished. There should be no immunity for violation of human rights).
Strict observance of meritocracy; (Ministers and public officials must be appointed on the basis of capability, knowledge and experience, not basis of political favour).
Regulatory Framework
Reduction of government monopolies in the market place: (Though some people argue that some of the state monopoly products or services of “national importance” such as oil, gas, railroads, ports, airlines, fertilizers and banks are better retained in the public sector because they belong to “the people”, in practice they are “operated by the few for the benefit of the few.” Prices are fixed, often capriciously, by those who hold excessive power, and are far from cost-related. It is “the people” who pay out of their noses for what belongs to them. There is need for immediate change in the attitude of the Government in this role).
Giving up state monopolies does not mean that there will be little role for the Government in economic management over the coming decades. The government will continue to set policy over a large range of issues, and will continue to provide the basic legal and financial infrastructure under which the market will operate. The Government will retain, or may even increase, its responsibility for ensuring social order and underwriting the basic needs of the underprivileged in the society. But the Government must increasingly look for ways to streamline the economy by regulations rather than intervention. But the current regulatory practices of the government also need to be streamlined, such as:
– Fickle Regulations – Many regulations are often imposed in a capricious manner. They are enforced in one year and repealed or ignored next year. Changes of taxes, duties, subsidies & incentives year to year make business budget difficult: one must understand that every ill-conceived regulation carries economic costs, so does lack of adequate regulation.
– Excessive Restrictions – Excessive pre-requisites of rules and regulations must be eliminated so that people can take initiative at will, as and when they wish. The Government also incurs certain costs of interventions, regulations and restrictions, and needs to balance the gains against these costs. The negative economic effects of over regulation of commercial activities are widely recognized since 1980’s.
Development Journey
Momentum of Change
The momentum of change in any society has to be generated from within the society itself. In addition to suggested changes in the administrative agenda, our society as a whole, at the civil society level as well as at the community level must address many issues, such as:
– Removal of socio-cultural inhibitions and restrictions on freedom of speech;
– Containment of corruption, which has now infested the society from the highest to the lowest level;
– Total respect for the Rule of Law;
– Public demand for transparency in the style of governance;
– Modernization the civil service, customs, and police services;
– Surveillance against abuse of public funding; (For instance, teachers, engineers, doctors in government pay roll are often engaged in full time consultancy, private tuition and private practise, which apart from dereliction of duty results in inequity of professional opportunities).
– Patronisation of invention and scientific discovery;
– Reduction of high unemployment by increasing investment in infrastructure and industrial sector;
– Improvement of educational standard to support industrial economy;
– Further reduction of population growth rate;
– Improvement of medical services.
Most people would see these tasks as political, and indeed they are political tasks in the sense that the country looks forward to politicians to guide it. The system of government in Bangladesh, however, has structural deficiencies which make it difficult to respond to change. The civil society must therefore come forward and take the initiative for fulfilment of these tasks. That would indeed be the first step towards addressing the issue of income disparity.
Impediments to Private Sector Growth
The impediments to entrepreneurship and growth of the private sector are numerable and multifarious. These not only impede initiatives but also make many enterprises fail and go into default. I would enumerate for your information the major ones:
The lack of long-term capital availability through banking channels;
The lack of long-term capital in the capital market / bond market;
Dumping of products, largely by smuggling;
Inefficient support infrastructure:
(a) in the utilities sector, specifically in power,
(b) of port services, including land ports,
(c) high transportation costs,
(d) a largely inefficient telecommunications system which is also very costly.
Widespread tariff anomalies.
High customs’ duties.
Complicated and cumbersome customs procedures aggravated by extensive arbitrary powers exercised by customs officers.
Low productivity and a highly politicised labour sector;
Inconsistency among different government policy statements;
An inefficient and corrupt judicial system;
Widespread corruption;
Political instability leading to frequent hartals or strikes;
High-interest rates in the banking sector;
A lack of credible statistics;
The lack of transparency and unaccountability in government decision-making;
The lack of an appropriate education system to support an industrial economy;
Too many holidays;
A slow process of deregulation and privatisation;
Lack of industry friendly social and political environment;
Lack of good governance;
Lack regulatory bodies;
An “uneven playing field” between the private sector and the public sector;
Lack of local technology;
Lack of research and development;
Government control on public utilities.
Legal Reforms for Private Sector Growth
In addition to above major impediments to social, political, cultural and economic progress are antiquated laws and rules based on those laws. All these antiquated laws must be immediately identified and abolished or amended. Many new laws may also need to be enacted that reflect the democratic practices of the 21st century and to establish rule of law. The impact of new technology, synergies of globalisation, the dynamics of a free economy and the demands of liberal democracy have made many old laws ineffective, unnecessary and even detrimental to social and economic growth. Antiquated rules, regulations and laws have become a real block to citizens’ ideas and aspirations of social, political and economic development.
The interdependence of various economic agents and the complexity of their relationships increasingly demand a better legal framework. The main purpose of a better legal framework is to reduce the cost and risk of transactions, as well as to harmonise regulations across different jurisdictions. Hence, business leaders look forward to the judicial reform commission who can expeditiously perform these reforms by suggesting priority action on the following:
The company law should be so amended to allow entrepreneurs and enterprises to operate in a modern environment.
Laws to regulate “hundi” and to prohibit money laundering should be introduced.
The Foreign Exchange Regulations Act should be amended.
The Banking Companies Act should be amended.
The Insurance Companies Act should be amended.
The Financial Instrument Act should be amended.
Environmental laws should be amended.
The Power Act should be amended.
The Petroleum Act should be amended.
The Industrial Policy should be enacted as an enforceable instrument.
The Port Authority Act should be amended.
The Dock Labour Management Board should be restructured by law.
The T&T Board should be restructured by law.
The Arbitration Act should be amended to conform to international standards.
Foreign investment laws should be amended to ensure a minimum 15% to 20% local partnership except in the EPZ. This is very important for Bangladeshi citizens to acquire foreign technology and expertise.
Labour laws should be amended.
Factory laws should be amended.
The Shops and Establishment Act (1961) should be amended.
New transparent laws protecting civil rights should be enacted.
Anti-terrorist laws should be reinstated.
The Special Powers Act should be abolished.
Bankruptcy laws should be amended to allow debt restructuring and shielding of the company’s finances against disturbing pressures of creditors while restructuring takes place. Directors should have legal protection.
The IMF President said recently in Thailand that;
(a) the private sector must feel confident of the legal system and of legal protection so that entrepreneurs can again undertake the risk of business venture,
(b) if the market economy is to work, then laws must be effective, and the legal system must work efficiently,
(c) nations must allow entrepreneurs to take risks under the protection of the law and all bankruptcy laws must be revised to help entrepreneurs or bankers to take prudent risks to contribute to the healthy growth of the economy.
New foreclosure laws should be enacted to allow financial institutions to take over mortgaged assets without going to court.
The Artha Rin Adalat Act should be amended.
A new bankruptcy court separate from the “Artha Rin Adalat” is to be established.
Admiralty laws should be amended to protect foreign flag vessels in conformity with international law.
Secrecy laws should be amended and a “Rights of Information Act” shall be enacted.
Patent laws should be amended and IPRL should be immediately enacted.
New laws should be enacted making it mandatory to pay interest on delayed payments.
No laws should have retrospective effect unless so approved by a three-fourths vote in the Parliament.
A new law should be enacted to create a land port authority.
The public must have a chance to interact with lawmakers before any new laws are created or old laws amended.
New laws should be enacted so that affected citizens can file cases against ministers, government officers, elected officials, police officers, customs officers, etc. for injustice, delayed decisions, wrong decisions, malafide decisions, etc.
A new law shall be enacted to protect witnesses.
A new “law of libel” shall be enacted so people can safeguard their rights and liberties.
Most Prospective Sectors to Invest in Bangladesh
Dynamic and vibrant Private Sector: FBCCI and other Trade Bodies
It is now widely recognized that a dynamic and vibrant private sector is crucial to rapid and sustained economic growth. The government policy has put the private sector to the driving seat of the engine for the growth of the economy.
The contribution of the business leaders, trade bodies and the FBCCI were enormous. The transition and the formation of the private sector were directly linked to the opportunities or facilities that the prevailing policies allowed. This is borne out from the outlook each five-year plan allowed as well as the perception the World Bank and IMF had. The private sector started off without a right to be. Individual efforts were channelized gradually to formation of trade bodies and then the FBCCI.
When some 80 percent of trade and 95 percent of the industry were in the public sector, we in the private sector were either suppliers, contractors, overseas suppliers agents at one end or agents and distributors at the other end. Private sector permission to enter the raw jute export trade was secured by the FBCCI and member bodies in late 1975. The industrial ceiling waiver was an uphill task with first relaxation made in 1974 and final withdrawal in 1978. The FBCCI and the member bodies raised issues of return of Bangladesh jute and textile mills; denationalization and return of mills to owners; divesting of government-held shares to activate the stock market; introduction of two sectors – reserved and free; allowing banks and insurance companies in the private sector; abolition of octroi, restricting export trade to the private sector and a host of other demands which were raised.
The private sector has demonstrated its ability to undertake most sophisticated industries and meet the demand of the nation. The pharmaceutical industry is a case in point. Not only has the production capacity doubled but also the prices for the consumer have come down substantially.
While conducive policy environment has made rapid progress, the procedural problems appear to be a major stumbling bloc. It is foremost on the present agenda of the FBCCI and trade bodies to highlight and seek simplification and transparency of procedures. There is a visible extortion at each stratum, which dissipates initiative and threatens industry and commerce.
The private sector is in its early stage and the entrepreneurs of this generation are at work and contribute from their experience and wisdom to innumerable issues that it confronts. FBCCI is the focus and contact point for business viewpoint and manifestation of the thought process of the private sector.
In the two dominant areas of export-led growth and privatization, FBCCI recognizes and endeavours to play its role. The private sector growth imperative makes a strong demand and imposes great responsibility on the FBCCI. The strength has to be augmented to effectively facilitate the change it had so long targeted. FBCCI interacts closely with member bodies; contributes to policy through various avenues including consultative committees; it renders a wide range of services in connection with international trade opportunities. FBCCI has the avenue of constructive access to the overseas markets through counterpart apex organizations with whom joint chamber agreements exist and the International Chamber of Commerce (ICC), Islamic Chamber of Commerce and Industry (ICCI), SAARC Chamber of Commerce and Industry (SCCI) and Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI). These are useful mediums but inadequately exploited due to resource constraints. The FBCCI hopes with the support of the members and the government it will continue in the path of progress and national well being with pride and dignity.
Now, to perform the desirable responsibilities as an apex representative of the private sector, FBCCI needs to remove the existing impediments against it.
The Role of Private Sector in Bangladesh: The Role of Private Sector in Bangladesh: The Role of Private Sector in Bangladesh: The Role of Private Sector in Bangladesh
