In an exclusive interview with the Dhaka Tribune’s Ibrahim Hossain Ovi, Exporters Association of Bangladesh President Abdus Salam Murshedy says that Bangladesh needs comprehensive foresight and long term investment policies to attract investment from home and abroad and retain economic growth for graduating to developing country status. Salam, also managing director of Envoy Textiles, talks about the upcoming budget as well
What should the budgetary measures be to attract investment from home and abroad?
Bangladesh is moving towards its goal of graduating to developing country status. In order to retain the development momentum and economic growth and make it sustainable, there is no alternative to new investments from home and abroad.
Right now, Bangladesh needs a long term investment policy in the upcoming budget to attract Foreign Direct Investment (FDI) as well as local investments. Investment is the key to employment, so paving ways for investment will lead the GDP moving forward.
To attract foreign investment, the government needs to build confidence of foreign investors by promoting local investment.
What should the tax structure in the next budget be?
Tax rate and structure should encourage investment with long term planning. To attract investment the government should offer an attractive package for the business community.
I think, the tax rate should be fixed for at least five years and in some cases it could be longer as it helps to make a business plan with a vision.
What should the key policy to attract investment be?
The government should identify emerging sectors and then allocate land to them in the Special Economic Zones (SEZs) on a priority basis. It should implement the SEZs as soon as possible to build confidence as lengthy implementation may deter confidence.
What should be taken into account for the export oriented industry?
Currently Bangladeshi apparel makers are being certified by the buyers’ platform over workplace safety and workers rights. But, the manufacturers are facing price competitiveness in the global market. So, the government should continue the existing incentives and offer more policy support to reduce costs of production.
What should the fiscal incentives be?
Restoring discipline in the banking sector is imperative to ensure free flow of funds for investment. Keeping interest rates unchanged is a must as increases will raise the cost of doing business. The state-owned banks should also provide more investment along with the private sector.