The Dhaka Chamber of Commerce and Industry (DCCI) yesterday suggested creating a specialised bank or fund to help cottage, micro, small and medium enterprises (SMEs) recover from the pandemic-induced losses alongside formulating an act enabling their development.
"Local industrialisation must be emphasised to achieve an increased export target of $40 billion by 2030. The (small-sized enterprises) can add value to the local industry," said DCCI President Rizwan Rahman.
The small-scale firms generate 80 per cent of industrial employment and 45 per cent of the manufacturing sector's value addition, he told a press conference at the DCCI auditorium in the capital's Motijheel.
Regarding two fresh government stimulus packages involving Tk 2,700 crore for small-sized businesses, Rahman said only 54.13 per cent of the first Tk 20,000-crore stimulus package announced in March last year was disbursed as of December.
Entrepreneurs of such small undertakings are unable to properly complete documentation processes, he noted, hoping that Bangladesh Bank will make the conditions more flexible for disbursement of such stimulus loans.
Suggesting that the SME Foundation and Palli Karma-Sahayak Foundation jointly prepare a database, he said the DCCI was interested in providing skill-development training to these entities.
The chamber also suggested formulating a comprehensive policy framework redefining businesses, bringing ease in access to finance through an SME bond and introducing an online trade licencing system for their financial inclusion.
Rahman said Bangladesh will have to explore new Asian markets as 81 per cent of the country's exports were destined for Western countries which were severely affected by the Covid-19 pandemic.
He thinks the crisis would continue this year and there was even a possibility of the economy suffering until next year.
He also recommended providing all investment-related public services through the online One-Stop Service platform of the Bangladesh Investment Development Authority, pointing out that the DCCI was already providing two services through it.
He suggested enabling low-cost investment and financing for the private sector to turn Bangladesh into a lucrative destination for relocation of labour intensive industries from China, Japan and South Korea.
Once Bangladesh makes the United Nations status graduation from least developed to developing country after 2027, it will lose special and differential treatments provided by the World Trade Organization, said Rahman.
The country will also face an additional 6.7 per cent tariff in exports and 27 compliance conventions stipulated in the European Union's scheme of Generalized System of Preferences Plus meant for developing countries, he added.
Bangladesh needs to immediately start developing skills to face the global competition as little time was available, he said.
He claimed that Bangladesh's corporate tax rate of 32.5 per cent was the highest in the world as the global average was only 23.79 per cent.
He demanded a gradual reduction to this rate by 5 percentage points in fiscal 2021-22, 7 in 2022-23 and 10 in 2023-24.
There could be conditions stipulating that tax cuts here have to be invested in skills development, infrastructure funds, research development and the bond market, he noted.
He also demanded imposing a VAT based on value addition or profit margins instead of annual turnovers.
Now 38.6 per cent of graduates are unemployed, claimed the DCCI president, apprehending that around 55 people would lose their jobs by 2041 due to the emergence of the fourth industrial revolution (4IR).
Rahman stressed on the need for facilitating cluster development of backward and forward industries in specialised economic zones with emphasis on uninterrupted and competitively-priced utility, telecommunication and transport services.
He sees a good future of e-commerce in Bangladesh, saying that around 10 crore people were using the internet and annual market sales amounted to $2 billion.
According to him, around 9.78 crore people transact around Tk 50,000 crore per month through mobile banking services, which was proving beneficial in terms of digital engagement.
He also recommended to offer fiscal and non-fiscal incentives for the adoption of 4IR technologies in businesses as well as tax rebates on spending for need-based training and skills development programmes.
This will build the digital infrastructure for increasing digital competitiveness, he said.
NKA Mobin, senior DCCI vice president, Monowar Hossain, vice president, and directors Md Shahid Hossain, Golam Zilani, Hossain A Sikder and Nasiruddin A Ferdous were present.