StanChart to play bigger role in Bangladesh
Standard Chartered wants to play a larger role in fostering the economic, financial and social development of Bangladesh by promoting trade and investment and helping local companies go global, said the group chairman of the British lender.
"Bangladesh has tremendous potential," José Viñals, group chairman of Standard Chartered, told The Daily Star in an interview last week.
Viñals, who was appointed the group chairman of Standard Chartered in December 2016, was in Bangladesh last week on a four-day visit.
"We are very hopeful about the future of the country. And my visit is a signal to how important the market is for us."
During his visit, Viñals met with a number of the bank's clients in Dhaka and Chattogram and exchanged views with economists, diplomats, regulators and policymakers on how Bangladesh can continue on its high growth trajectory and reiterated the bank's commitment to driving commerce and prosperity in the country.
To realise the country's potential, appropriate government actions and collaboration with the private sector are needed, said Viñals, who began his career as an economist before spending 25 years at the Central Bank of Spain, where he rose to be the deputy governor.
"Of course, Bangladesh's achievement is encouraging. The country has been growing at more than 7 percent and has the capacity to grow at 8 to 9 percent in the future."
One should not expect the current growth rate would be sustained forever if the country does not improve on areas such as infrastructure, education and business-friendly environment.
"Any country -- and Bangladesh is no exception -- should think on how to improve the perception of foreign investors related to return and risks."
The economist said the bank already plays and will play the important role of being a bridge between Bangladesh and the rest of the world by bringing in foreign direct investment to the country, which is badly needed for many reasons.
"Bangladesh's 177th position out of 190 countries in the World Bank's Ease of Doing Business ranking is a testimony of how much more needs to be done."
The rule of law, stability and predictability, and business-friendly atmosphere are critical for attracting foreign investors as well as incentivising domestic investors.
With the fourth industrial revolution in terms of communications and technology, the skills for the new economy are not the skills for the old economy, said Viñals, who was director of the International Monetary Fund's monetary and capital markets department prior to joining Standard Chartered.
So, there is a need to retool people to make them fit for the new production world.
"In the end, the most important asset of any country is its people. And Bangladesh has lots of people and they need to be equipped with the tools to deliver on the fantastic demographic dividend that the country has."
He also touched upon the ongoing trade conflict between the US and China. "If China trades less to the US, there may be an opportunity for Bangladesh to export more."
However, one needs to be mindful of other effects: if the trade conflict dents global confidence, it will reduce demand everywhere.
He also talked about some political and geo-political concerns such as the political uncertainties looming over Europe because of Brexit, the public debt crisis in Italy, as well as the recent event in Istanbul following the killing of a Saudi journalist.
Oil prices may go higher or lower once the embargo on Iran starts to take effect in March or so, which will affect oil importing economies, he said.
The final challenge facing the global economy is the monetary policy of the US, where the Federal Reserve System has been increasing the interest rates for quite some time now.
"No country in the world is immune to this. This is a time you strengthen your fundamentals and for any country this is a time to put in place policies that allow growth to be sustained and enhanced. That's the best protection against this potential external headwind."
Speaking about the non-performing loans, Viñals said it is very important that the efforts aimed at cleaning up and strengthening the financial system and the banking sector continue.
"Strong financial system, prudent monetary policies, fiscal rectitude and structural reforms on the various domains contribute to potential growth and to actual growth over time."
He said one should isolate where the problems are and deal with the issue in terms of cleaning up and making sure the banks get sufficient capital.
"Most importantly, you should not just solve the problem of the past; you should make sure these problems don't reappear in the future," said Viñals, who also worked for the European Central Bank and the European Union.
About Viñals' visit, Naser Ezaz Bijoy, chief executive officer of Standard Chartered Bangladesh, said high-level visits underline the bank's continued focus on Bangladesh and its confidence in the nation's economic prospects.
The London-listed bank, which is focused on Asia, the Middle East and Africa, came to Bangladesh in 1948 and acquired Grindlays Bank in 2000, which started operations here in 1905, giving it a footprint for more than a century.
"We will continue to work tirelessly to aid our clients and communities in Bangladesh to achieve their full potential with world-class financial products and services."