In an exclusive interview with the Dhaka Tribune's Niaz Mahmud, Business Initiative Leading Development (BUILD) CEO Ferdaus Ara Begum discusses the organization’s activities and role in the country’s economy for the near future. Ferdaus Ara Begum has vast experience of working with the private sector since 1987.
What is BUILD's current role in developing the country's trade and commerce?
Since its inception in 2011, Business Initiative Leading Development (BUILD) has been working for building an enabling business environment and initiating a platform for public-private dialogue (PPD) between the government and trade/commerce-based professionals. The dialogues are based on research-backed inputs to facilitate ease of business through relevant regulatory and policy reforms in Bangladesh. BUILD is a voice of the private sector supported by the three leading, pioneer chambers—DCCI, MCCI, and CCCI—in the country.
Despite a number of business platforms currently working at the national and international level for removal of barriers to doing business, the regulatory barriers continue to hamper private sector development. In Bangladesh, more than 60 chambers and thousands of associations are working and having continuous dialogue with their constituencies and the government. In that respect, institutionalization of dialogues and structure in a more apposite manner based on local context needs is essential.
BUILD works as a structured platform to unlock regulatory constraints for investment. The organization is presently working on five specific thematic areas, each co-chaired by a public sector chair, especially secretaries of relevant ministries, and from the private sector, leaders of leading chambers or associations.
Who are your organizational partners?
The 2030 agenda is for transforming the world: they are to integrate and balance three dimensions of sustainable development: economic, social, and environmental issues. BUILD has been able to institutionalize the concept at the national level, bringing together public and private sector, and also international partners in trade and business. BUILD signed memoranda of understanding (MoUs) with a number of national and international organizations, which are: BIDA, Bangladesh Bank, Dhaka University, FBCCI, SME Foundation, UNDP, Chemonics international, Advantage Austria, Business NZ, International Trade Centre, WEConnect International etc.
Which sector does BUILD primarily focus on?
BUILD works for the private sector, broadly to expand business and investment, as well as attaining more GDP growth.
At present, BUILD provides support to the BICF (Bangladesh Investment Climate Fund) program in policy advocacy for reforms through conducting research, developing reform recommendations, organizing structured public-private dialogue, and conducting monitoring and follow up for reform implementation primarily in sectors such as: leather and leather goods, the plastics sector, and light engineering.
We have also widened our scope of work in textiles, women entrepreneurship development, and sustainable production and consumption, including climate financing.
What are the potentials and challenges faced by the tannery industry?
The Leather and Leather Goods (LLG) sector is the 2nd largest export sector of the country, but the trade difference between leather and readymade garments (RMG) is huge—more than $32 billion. RMG is exporting about $33 billion while LLG is hovering around $1 billion. The huge gap needs to be bridged by boosting the LLG sector’s export performance.
From 1951, through a gazette notification for establishing an environmental pollution free tannery industry, the Hazaribag Tannery Estate has been operating up to April 2017. Then it was shifted to Tannery Industrial Estate of Dhaka (TIED) operating in Hemayetpur. Entrepreneurs feel the shift was implemented without full preparation. BUILD presented a policy paper in its recent trade and investment working committee meeting which showed that for TIED to be fully operational, there are procedural gaps, understanding gaps, and policy gaps which need to be addressed in order to increase finished and crust leather exporst which declined to 92% and 24% respectively in 2017-18. At its present level, the common effluent treatment plant (CETP) of TIED cannot qualify the Leather Working Group (LWG) for certification, which is one of the primary requirements for exporting to global brands.
What is the green funding of plastic industry?
The plastics sector is an emerging sector with exports worth about $1 billion, contributing no less than 1% of GDP. The sector creates employment for more than 600,000, 28% of whom are women. The domestic market is also about $1 billion and is gradually expanding.
The government provides various kinds of policy support to this sector such as cash incentives, duty drawback for raw materials, EDF, bonded warehouse facility, green category environmental certificates, import duty benefits for raw materials, VAT and tax exemption at certain stages and so on.
How do you evaluate the overall economy of the country?
The fundamentals of the Bangladesh economy are by and large going strong, despite a number of challenges. The GDP growth at 7.86% in 2017–18 is encouraging, in view of the headwinds faced by a number of economies around the world.
The outlook is optimistic: Bangladesh has set a new target of 8% GDP growth and $54 billion goods and services exports for FY2020. The transition to a middle income country to be made effective from 2024, poses new expectations and roles to meet. The government envisions that Bangladesh will transform into a developed country by 2041.
As industrialization remains the growth engine of the country, the barriers to doing business should be removed on a fast track basis. Key constraints like contract enforcement, availability of land and infrastructure, and so on, should be addressed actively and meaningfully.
The establishment of economic zones with proper infrastructural support and waste management facilities, reform in adjudication and alternative dispute resolution for commercial disputes, and so on, are among some of the important steps to take in this regard.
What steps should be taken for export diversification?
For product diversification we need to identify the appropriate sectors where investment and policy support should be directed. There should be a clear understanding between policy makers and stakeholders, about which sectors are coming up as the next big export opportunities. Moreover, within the RMG sector itself, there should be more diversification in terms of shifting towards more value-added products.
What is the future plan of your organization?
BUILD will keep working to improve enabling the business environment through a platform where both the government and the private sector work together to promote trade and investment, in particular, to: promote an improved investment climate in Bangladesh; significantly reduce the cost of doing business; and increase private sector development and investment, thereby creating jobs and opportunities for growth.