MCCI for right policy support, tariff regime | The Daily Star
12:00 AM, March 19, 2009 / LAST MODIFIED: 12:00 AM, March 19, 2009

Recession Package

MCCI for right policy support, tariff regime

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The MCCI yesterday recommended a supportive monetary policy and conducive tariff regime rather than direct cash incentive to exporters as stimulus package as part of the government's effort to tackle the recession.
If necessary, the cash incentive, as demanded by different chambers and trade bodies, can be given after a thorough analysis by the government, only to the affected businesses, not as a wholesale rate, said Abdul Hafiz Choudhury, president the of Metropolitan Chamber of Commerce and Industry (MCCI).
"First of all, the government should identify the real affected businesses from the recession and then should take action to address the problems. If the analysis suggests that supportive monetary policy and conducive tariff regime would work, then direct cash incentive is not needed," he said.
The government has not so much capacity right at this moment to give cash incentive as demanded by the apex trade body FBCCI Tk 6,000 crore and 10 percent cash incentive against the export by the BGMEA and BKMEA as bailout packages.
According to Choudhury, the supportive monetary policy and conducive tariff regime include reviewing and keeping the exchange rate stable and competitive, keeping interest rate supportive to export and production, ensuring priority distribution of bank credit to agriculture, manufacturing and service sectors and limiting government's borrowing from the banking sector.
Choudhury told these to The Daily Star after a meeting with Prime Minister Sheikh Hasina at her office. The MCCI submitted a set of recommendations to the premier on addressing the recession problems.
Former presidents of MCCI Latifur Rahman, Samson H Chowdhury, Syed Manzur Elahi, Laila Rahman Kabir, Mahbub Jamil, also former adviser to the caretaker government, and Adviser to MCCI Committee CK Hyder, among others, were present during the meeting.
The MCCI chief said the government should not bring under the cash incentive package to the businesses those who are making profit, but to the really affected businesses.
Suggesting that the government form a contingency plan and fund, Choudhury urged the government to reschedule the bank term loans and reduce the bank interest rate.
He told The Daily Star the MCCI also suggested that the government give opportunity to whiten black money paying relevant taxes and 5 percent extra penalty tax only for the cause of recession.
"We always oppose the process of whitening the black money, but this time we did not oppose it only because of recession. We need a lot of investment for creation of jobs," Choudhury said.
During a long meeting with the prime minister the MCCI chief recommended that the government gear up the regional trade, especially with India to narrow huge trade gap with it.
He also suggested reducing the corporate tax and widening the tax-holiday as a tool to encourage more investments.
Since the country has been suffering from a chronicle problem of power and energy, the government should immediately take measures for extracting coal from Barapukuria and Fulbari coalmines, Choudhury quoted the proceedings of the meeting.
"We have also suggested setting up nuclear power plants to address the problem of power," he said.
The prime minister gave a patient hearing to the problems presented by the business leaders and assured them for extending all cooperation in removing every problem, said the MCCI boss.
Choudhury quoted the PM as saying when Awami League came to power in 1996, total power generation was only 1,600 megawatts, which was increased by the AL government up to 4,300 MW.

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