Former FBCCI President Mir Nasir Hossain emphasises double-digit growth for attaining middle income status
By Khawaza Main Uddin and Wafiur Rahman
Energy crisis,poor road infrastructure and inefficient port are a few of the major challenges facing the Bangladeshi businessmen, who though have shown resilience in becoming successful, says Mir Nasir Hossain, Managing Director of Mir Group.He also feels that political instability has created a sense of uncertainty in the minds of the potential investors.
One who led the country’s apex trade body, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), he acknowledges that trade bodies are not run professionally so that the businessmen are deprived of due services. In an interview with ICE Business Times, Mir Nasir underlined the need for long-term policies instead of ad hoc-ism, as common in the country, to attain sustainable growth of businesses. He also advocated regulatory reforms in this connection.
What are, according to your views, major challenges facing the Bangladeshi businesses at the moment?
One of the major challenges that we are facing now are the political instability. On top of that, two sorts of deficiencies are hitting us the most. First, the infrastructural deficiency, gas and electricity in particular. The second is the deficiency of physical infrastructures, such as our roads, railroads and our port activities in Chittagong. It is astounding that Chittagong port accounts for 85% of our export import activities but the level of efficiency of the port is still not up to the mark, not to mention it is one of the costliest ports in the world. As far as our roads are concerned, the Dhaka-Chittagong highway is not good enough to carry container and finished goods. Not only are these deemed to be non-executable, but they are also very time-consuming. Businesses face a huge loss also in terms of maintaining their lead time.
If we look at our shortage in gas supply, it hampers the electricity generation process. Similarly, supplies to the industrial units are also affected as a result. Therefore businesses face a hard time in their efforts to expand units, operations the market. Electricity, on the other hand, hits the small and medium enterprises (SMEs) the most, as they are hugely dependent on electricity.Unlike big industries, which have alternative options for electricity in captive plants, SMEs cannot afford it and have to depend on low quality electricity supply, thanks to constant fluctuations.
The government’s policies regarding these matters have been inconsistent so far, and this affects long term investments. And as I had mentioned before, the political impasse has affected the business community to a great extent, creating a sense of uncertainty over a longer period of time. The high interest rates in banks are also not helping the businesses at all.
How do you evaluate the role of the trade bodies – are they serving the businessmen and entrepreneurs over the past decade or so?
Apart from a few trade bodies, most of them are not professional enough. The motive of politics always plays a role and such practice hampers their activities and missions. I think they have serious shortage of capacity and there is no capacity building initiative. There is no proper knowledge bank for advocacy, something that trade bodies are supposed to do to help the businesses to grow. No concrete or substantial research activities are there nowadays in the trade bodies. So, constrained by knowledge and information gap, they cannot cater to the needs of their members, the individual businessmen and business houses. I think the genuine and dedicated businessmen, not anyone who is politically-motivated, should be given the opportunity to run the trade bodies completely independently and serve the business community.
What are the constraints for foreign investments in Bangladesh? Do you feel there is a serious lack of confidence and how to overcome that?
Local investments are not being made at the expected level, let alone foreign investments. There is a lot of scope for our local entrepreneurs to invest, but they simply cannot, as the environment for investment or doing business is not conducive enough. There are no industrial plots to start a business. The land which is generally meant for agriculture is being converted into industrial plots but we do not have the areas earmarked for industries. As a result, we are losing farmland and cannot find land for setting up new industries. For attracting foreign investment, we have to create atmosphere for local investors and foreign investors will follow them.
Bangladeshi businessmen and workers are famous for resilience. But don’t you think we are exhausting ourselves by living in an atmosphere of ad hoc-ism over the years?
True, we are fighting that atmosphere. There seems to be a notion that doing business in Bangladesh is a crime. But we have seen that Bangladeshi entrepreneurs can overcome any challenges put in front of them, proof of which is our consistent GDP )gross domestic product) growth. This not only makes the Bangladeshi businessmen unique, but also tells of their courage and risk management capacities. But our authorities lack foresight, as seen with the short term policies and their implementations. Whenever this happens, an industry or two suffers, sectors become damaged. We need to seek sustainability for a consistent growth in business. Yes, we are living in and living with short-term policy regime. But for long-term sustainable growth and business, we have to focus on long-term policies.
What kind of regulatory reforms would you suggest for a better growth of business? And fiscal reforms and supports that are relevant in today’s context?
The regulatory bodies need to be independent and knowledgeable. By that I mean that they need to possess the knowledge relevant to the particular sector that they are working on. They also need to have a farsighted attitude. Their support to all the industries must be pragmatic in helping entrepreneurs and stakeholders. So these bodies must be independent and professional in their activities. These bodies are not being professionally run at the moment.
Fiscal reforms need to be a continuous process, where, for example, incentives can be given to exporters and the sectors that deserve. As the cost of doing business here is high, there should be certain arrangement and support to the help the industries and business entities to remain competitive and contribute to growth. Local industries also need to be protected, otherwise foreign companies can outsmart them easily.
How can we attain the status of middle income country alongside retaining our competitive advantage in the global market? How to overcome a potential trap of becoming rich and remaining industrious?
We can attain it through the growth of GDP. A 6% growth, as we have achieved so far, is reasonably good in worldstandard, and of course it is better than 20-30 countries of the globe. But, I think, we have to achieve a double-digit growth to become middle income country, given the challenge of bringing many people out of poverty and accelerate prosperity. For attaining what we need is huge investment. Sustainable investments need to be ensured in the private sector but the investment is not satisfactory now. If we are to get to even the projected 7.2%, our rate of investment needs to exceed 30%, much higher than the current rate of about 26%. Otherwise the momentum in the GDP growth will be lost.
Which are the next emerging sectors/businesses that can help Bangladesh grow and ensure welfare of its citizens?
Our country can prosper by utilising potentials of multiple sectors such as Information Technology (IT), textiles, shipbuilding and pharmaceutical industry. I see a rise in the pharmaceutical sector because until 2020 we will be enjoying advantage in this sector in line with the World Trade Organisation’s rule. We have to be ready for a smooth transition. Our light engineering sector, electronics sector are also becoming promising day by day. If the government can make proper policies, then these industries can flourish and thrive as successful businesses. They can generate huge employment.