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Businesspeople worry about more money laundering

  • Published at 01:31 am October 10th, 2019
CPD
CPD Research Director Khondoker Golam Moazzem presents findings of Bangladesh Business Environment Study 2019 in Dhaka on Wednesday, October 9, 2019 Mahmud Hossain Opu/Dhaka Tribune

CPD survey finds people also apprehensive about adverse impact of banking sector problems in businesses

Over 80% Bangladeshi businesspeople apprehend further deterioration in money laundering through various channels, while 78% think that problems in the banking sector will have a lot of adverse impact on domestic businesses.

The bleak picture came out in a survey conducted from February to April this year by the Centre for Policy Dialogue (CPD), a local think tank, on 77 companies, mostly private-owned and based in Dhaka, Narayanganj, Chittagong and Gazipur,.  

The survey titled "Bangladesh Business Environment-2019" was conducted to gather entrepreneurs’ perception of the role of the government in various issues.

Businesspeople are apprehensive about government’s possible initiatives to undertake reform measures in different issues and that the government may find it difficult to undertake reform measures for fiscal policy, banking sector, civil service, and human development, the CPD survey finds.

“Over 80% respondents have mentioned that money laundering through various channels in Bangladesh is largely pervasive and they apprehend further deterioration in money laundering situation,” CPD Research Director Khondaker Golam Moazzem said while presenting the survey findings. 

According to a Global Financial Integrity report, $5.9 billion was siphoned off from Bangladesh in 2015 while Bangladeshi nationals' deposits with various Swiss banks rose by 28.34% to 617 million Swiss Francs year-on-year in 2018.

On the other hand, 78% respondents in the survey mentioned that problems in the banking sector would have significant adverse impact on domestic businesses, Moazzem mentioned, adding that public perception of the sector deteriorated further in 2019.  

Over 66% respondents said quality of monitoring and supervision in the banking sector by the Bangladesh Bank in 2018 was somewhat poor, while 50% opined that new government would not undertake the needed reform initiatives for the banking sector.

In addition, 43.4% think new government will not undertake the needed reform initiatives for fiscal policy and nearly 40% said it would not undertake the required reform initiatives for human development.   

As regards export incentives, 45.6% observed that fiscal incentives, currently provided to the manufacturing sector, was discriminatory in nature. 

In addition, the monitoring and supervision system of Bangladesh Securities and Exchange Commission (BSEC) to regulate the market is somewhat ineffective, think 63% of the respondents. 

They also observed that the full enforcement of the Value Added Tax (VAT) and Supplementary SD Act would be difficult.

Around 50% businesspeople said that technological changes in the manufacturing sector would lead to more unemployment in 2019. 

However, there are some key areas where the businesspeople find improvement and positive changes.

Responding to the survey, 47% sounded positive about business environment in 2019 and said moderate improvement was observed in tax system. Positive remarks on progress in Padma Bridge and Dhaka Metro Rail work came from 50% and 45% of the respondents respectively. 

However, half of the respondents were negative about the progress in the works of Rooppur Nuclear Power Plant, Payra seaport and Matarbari coal fired power plant. 

Start-up business will grow in 2019 due to government allocation of Tk100 crore in the current budget to facilitate new businesses.

Newly established institutions have yet to generate expected level of services for the private sector. Perception about BIDA’s OSS (One Stop Service of Bangladesh Investment Development Authority) has improved but it may not provide effective services in due course of time, findings show.   

Brexit may cause some negative impact on the economy, while US-China trade war will have positive impact on the economy, the survey report says.