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Bangladesh Bank for cash incentives to merchant ship business

  • Published at 12:07 am December 11th, 2016
Bangladesh Bank for cash incentives to merchant ship business
In a recent letter to Bank and Financial Institutions Division, the central bank said the cash incentives against foreign currency earnings by the business at a rate fixed by the government. Bangladesh Bank also advised bringing the ocean-going ship business under the revised Industrial Policy 2016. According to official data, the number of Bangladesh ocean-going merchant ships declined sharply to less than 30 now from 72 in 2013. Image crisis and double taxation in various international ports have been blamed for the decline. The foreign currency earnings from the business have dropped to $8,000 a year from $40,000. This drop has affected the country’s remittance inflow as a large number of employees including cadets and seafarers became jobless, officials said. According to Department of Shipping sources, under this situation the investors are turning their back from Bangladesh’s ocean-going ship business. About 12,000 unemployed skilled sailors are waiting for jobs in the sector, said the sources. While Bangladesh’s 5.45% of foreign trades depend on the country’s flag carrying ships, the rest of the trades rely mainly on foreign ships. The country’s 95% of imports and exports are done through sea. According to Bangladesh Bank letter, the ocean-going ships carrying Bangladesh flag should receive financial benefits from the government like container ship owners. Container ship owners receive cash incentives from the government. Bank interest rate facilities and delay in registration and lack of flag protection are also factors responsible for dwindling number of merchant ships in Bangladesh, sources in Department of Shipping said. Sources also said India, Malaysia, Indonesia, Singapore and Kuwait enjoy 100% flag protection from their respective countries while Bangladesh ship owners enjoy only 40% such protection.