"Bangladesh has one of the most protective tariff regimes. If you are not competitive, things are very difficult," Christine I Wallich, country director of the World Bank, here told a discussion yesterday.

There is no reason for such a high tariff as it encourages smuggling and corruption in customs clearance, she observed.

Business leaders contradicted Christine, saying they don't think that tariff in Bangladesh is higher than India's.

Responding to the WB country director, Manzur Ahmed, advisor to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said: "The WB should not ask for tax cut here as 148 members in the WTO have agreed that the LDCs need not to reduce tariff.

First victim of the tariff cut will be SMEs that contribute 95 percent of the country's total export earnings and generate 87 percent of the total industrial employment, he added.

Terming WB's reform prescription half hearted, Manzur said WB was behind the creation of Desa and Desco in power sector, which did not bring any good results .

Bangladesh Chamber of Industries (BCI) organised the discussion on 'World Bank's Role in the Private Sector Development of Bangladesh' in Dhaka.

Tarun Chakrabarty, MD of the Grameen-Gonoshashtha Textile, said: "We need some sorts of protection and that is why tariff on imports is essential."

Responding to these points, Wallich said protection makes sense for the infant industries.

Hailing donors' stance on governance, corruption and other issues, Manzur Ahmed said the government is accountable to donors, not to people and recent meeting on 'PRS Implementation' justifies the claim.

Responding to this point, Wallich said the government should not be accountable to the WB or any other lending agencies.

Explaining, she added Bangladesh is not an aid-dependent country. Its export income is more than US$ 8 billion and it gets around $4 billion from the non-resident Bangladeshis but aid amounted to around $ 1 billion.