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2015: brighter days beckoning

Md Fazlur Rahman
Businesses remained buoyant throughout 2014, thanks to political stability that prompted calls for the continuation of a business-friendly environment into 2015 and beyond for the sake of the economy.
"Undoubtedly, we had a good year as the economy has strengthened after a year of turbulence,' said Helal Uddin, vice president of the Federation of Bangladesh Chambers of Commerce and Industry, the apex trade body.
'Tn 2014, we did not see so much political chaos. You will not find such a year of political stability in recent times. All parties should work to maintain and improve the business climate, "he said.
Asif Ibrahim, a leading garment exporter, echoed the same. Businesses needed some breathing space in the year after the volatility of 2013 which had led to massive losses, he said.
"After the elections in January, the business climate remained steadfast as there was some sort of political stability,' said Ibrahim, vice chairman ofNewage Croup.
In the outgoing year, he said some policy reforms and automation helped Bangladesh climb two notches on the ease of doing business index of the World Bank.
However, he said the cost of capital continues to be a problem for the
business community.
'Although banks have excess liquidity, domestic investment remained stagnant as interest rates for lending have not come down,'1 said Ibrahim, also the chairman of Business Initiative Leading Development, a public-private dialogue platform to expedite policy reforms.
In 2015, the expectations of the business community are manifold, Ibrahim said.
'There should be a consensus on
the proposed VAT law,' he said.
"While there is a need for collecting revenue to meet the growing demand for development projects, the business community has to be taken on board as a partner in progress.'
Ibrahim said the garment sector is going through a massive reform process in terms of investments being made in safe work environment.
The government must continue to ensure that low-cost funds, both in local and foreign currencies, are available, particularly for the industries that require retrofitting, relocation and upgrade, he said.
He said the government has taken some positive steps to go for publicprivate dialogue mechanisms for the sake of policy reforms. 'These efforts must continue in 2015." The introduction of low-cost foreign funds for importing capital machinery will certainly attract more investment in 2015, Ibrahim said.
'If political stability can be ensured, 2015 can see increased investment in the manufacturing sector, which is essential for creating new employment opportunities.'
Khaled Hossain, president of Dhaka Chamber of Commerce and Industry, termed the economic growth of the country stagnant and blamed it on a lack of investment.
"I know many businessmen who have plans to open new projects or expand the existing ones. But they can't do so due to power and energy crises."
He said businesspeople and industrialists have enough confidence. "We always look for opportunities to invest, and we still have the appetite, regardless of the political situation and other problems," said Hossain, also a director of Anwar Group of Industries that has business in textiles, jute, ICT, automobile, finance, real estate and furniture.
He Said there was scope to grow in 2014. "Unfortunately, we are losing the opportunities due to some bottlenecks."
Bangladesh offers plenty of benefits to attract foreign investors but a lack of power and energy is failing the country, he added.
"We are not being able to assure foreign investors of uninterrupted supply of power and energy. As a result, they are going to other countries."
He said the absence of new gas connections for a long time has dented investment prospects in the productive sector. “As a result, the private sector has failed to create new jobs.”
Hossain does not worry much about political uncertainty. "We saw political turmoil many times in the past. We fought back every time and showed resilience. But we can't survive if we are not given electricity and gas.”
Hossain said the failure to run factories at
full capacity is also hitting the financial sector hard, as industrial borrowers are failing to repay loans. "As a result, bad loans are piling up. As we are becoming bad borrowers, we are not getting new loans to make investment.'
“This will have a long-term negative impact on the economy if we don’t address the issue now."
He said 2015 could be the year of a turnaround. "Opportunities are there. It will all depend on the government's attitude towards businesses."
Hossain said the country will have to find answers to nagging traffic jam and red tape, as they are eating away 4 percent of gross domestic product every year.
"Procedures have to be simplified, the cost of doing business needs to be brought down and processes in doing business should be reduced," he said.
Abdul Quader, chief executive officer of Bay Emporium, a fast growing footwear brand, said sales throughout 2014 were reasonable although they could not meet the company's expectation.
"However, we introduced new products and opened new stores in the year," he said.
Quader said his company is upbeat about 2015. Bay Emporium, which started its journey in 2006, has now 50 stores and will open another 20 in 2015 as part of its plan to open 100 outlets in next three years.
Exports, however, lost momentum because of a limping global economy and the transition in the garment sector.
Ibrahim of Newage Group said it is encouraging to note that the leather and footwear sector has crossed the $1-billion mark in exports in 2014. "We expect that the pharmaceuticals sector will follow suit.*
Hossain of the Dhaka chamber said peace in the society has to prevail for the economy to flourish.
“If a local investor does not have the courage to invest, then how can we expect the foreign investors to come in? We have to shun the path of violence."