The government should draw up an action plan to counter the impact of the raging coronavirus on the local economy and trade and commerce, said businesspeople yesterday, on the day Bangladesh confirmed the presence of the novel virus in the country.
"The finance minister should immediately sit with the stakeholders, including the private sector, to outline an action plan," said Mir Nasir Hossain, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
Yesterday, Bangladesh confirmed three cases of COVID-19. Of them, two recently returned from the coronavirus-stricken Italy. A family member of one of the two is the third person struck by the virus.
The Daily Observer and TV channel DBC News organised the roundtable on the current state of the economy at the InterContinental Dhaka.
The comments from the businesspeople came a couple of days after an Asian Development Bank analysis said Bangladesh's gross domestic product may contract by as much as 1.1 per cent in the hypothetical worst-case scenario of a significant outbreak of coronavirus in the country.
That means the novel virus could wipe $3.02 billion off the $300 billion-plus economy.
The garment sector accounts for 80 per cent of the national exports. And 70 per cent of the raw materials for woven garments come from China, the epicentre of the virus.
"A crisis may be created in this sector. This is a challenge for the economy. The government should formulate a plan to weather off the impacts," Hossain added.
The coronavirus has had a toll on trade and commerce, said Md Shahidul Ahsan, chairman of Ahsan Group.
Many garment factories are on the verge of closure and the government should take steps immediately, he said.
Corruption and irregularities in the banking sector have snowballed into a major problem, said AKM Aftab ul Islam, a director of the central bank.
"The central bank is not being allowed to work independently. Decisions are being changed through pressures from various quarters. We have read such allegations in the newspapers, but I have also observed it."
Defaulters make bad loans regular through court writs. "So, a tougher law is necessary to stop them from availing this scope."
The central bank had hoped that many defaulters would pay the 2 per cent down payment to restructure defaulted loans.
But the top 20 defaulters have not availed the offer, Islam added.
In order to create jobs, investment is needed, said Mostafa Kamal, chairman of Meghna Group, one of the leading business groups in the country.
"But, we, the entrepreneurs, are suffering because of bureaucratic red tape."
One of the files of Meghna Group has been caught in bureaucratic tangle for over two years, he said.
"I wrote to the ministry. One of the senior officials of the ministry told me that the file is moving across desks."
Decisions from the government should come quickly and harassment facing the businesses should come to an end, the entrepreneur said.
He also opposed devaluation of the taka, which the garment exporters have been demanding.
"Bangladesh is an import-dependent economy," Kamal said, while suggesting incentives for exporters instead of devaluing the currency.
Plans should be framed in light of the weaknesses facing Bangladesh in order to move towards to a sustainable economy, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
Sluggish investment, low revenue growth and the weak banking sector are the three major challenges confronting the economy, he said.
In order to bring about changes, attention should be given first to the banking sector.
"If we can't strengthen the banking sector, investment will not flow in," said Mansur, also a former economist of the International Monetary Fund.
Bangladesh wants to raise its per capita income to $16,000 by 2041, meaning per capita income has to be increased by 11 per cent per annum from 8 per cent at present, said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD).
"In order to prepare for that, Bangladesh has to develop skilled workforce and for this investment in the education sector has to be augmented."
Bangladesh needs to raise its capacity to boost exports to China and India, the trade expert added.
The country has achieved many successes, including lifting the economic growth rate to a higher level, but the country also faces challenges, said Salehuddin Ahmed, a former governor of the Bangladesh Bank.
"There are policies in Bangladesh, but they are not implemented properly. This is very disappointing."
The most concern stems from institutions. "The Bangladesh Bank, the Bangladesh Securities and Exchange Commission, banks, financial institutions and even educational institutions are getting weaker day by day," he added.
There has been a lot of criticism about the 9 per cent interest rate for loans set by the central bank, said Sheikh Fazle Fahim, president of the FBCCI. Many people who once vouched for the 9 per cent interest rate are now criticising it.
"Constructive criticism is good, but it is not good to say something for the sake of saying something. 99.99 per cent of the businesses in Bangladesh are happy about the 9 per cent lending rate," he added.
Finance Minister AHM Mustafa Kamal said his maiden budget spoke of the many reforms needed to advance the economy.
"These will be implemented gradually. But you can't make haste about them."
Speaking about the fall in exports, he said exports of all other countries such as Vietnam and Sri Lanka have dropped as well.
He also touched upon the bleak state of the stock market.
"It can't be that the country's economy is strong but the stock market sounds like an empty vessel. So, you [stakeholders of the stock exchanges] will have to identify the reasons. The government will extend all sorts of support," he added.
Iqbal Sobhan Chowdhury, editor of the Daily Observer, and Fahmida Khatun, executive director of the CPD, also spoke.