Entrepreneurs yesterday urged the government to cut fuel prices, saying the unprecedented spike in petroleum product prices is hurting businesses and will continue to hamper job creation and hit the broader economy.
The call, which was made at an event organized by the Dhaka Chamber of Commerce and Industry (DCCI) in the capital, came less than two weeks after the government raised fuel prices to to 51.7% in order to pass their highest price in the world. price to the public, the second increase in nine months.
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“In many ways, diesel is a staple commodity, so its rise is proving costly to the economy,” said Mohammad Hatem, executive chairman of the Bangladesh Knitwear Manufacturers and Exporters Association.
“At a time when the price of fuel is falling in the international market, such a rise in prices has stunned us,” he said, calling on the government to adjust the price of fuel every three months according to international prices. .
“At a time when the price of fuel is falling in the international market, such a price hike has stunned us,” said Mohammad Hatem, Executive Chairman of BKMEA.
Hatem pointed out that industries in many regions, including Narayanganj, are receiving insufficient gas supply, which is hampering production.
Industries are facing declining gas pressure exacerbated by insufficient supply amid the government’s decision not to purchase liquefied natural gas on the international market and insufficient local production.
“Additional costs in the supply chain must be reduced to control food inflation,” DCCI Chairman Rizwan Rahman said, adding that international market and price dynamics must be monitored to avoid a food shock. irrelevant price.
“The supply of essential commodities through the Trading Corporation of Bangladesh needs to be expanded outside of Dhaka.”
Rahman suggested ensuring a flexible interest rate regime to reduce inflationary pressure and stabilize foreign currency reserves.
The central bank has maintained a 9% lending rate since April 2020, while foreign exchange reserves have been stretched following a sharp increase in import payments amid falling remittances and export moderation.
The DCCI chief said government borrowing through savings certificates must be reduced and cheap sources of funds from external sources must be accessible.
To boost export earnings, he recommended expanding the service sector and ensuring increased capacity in the ports and logistics sectors.
Currency exchange can be considered to facilitate low-cost imports and improve foreign currency reserves, he said.
To meet the challenges of leaving the group of least developed countries, Rahman’s advice has been to accelerate the signing of bilateral and multilateral comprehensive economic partnership agreements with trading partners and to revise the tariff structure at the import.
Md Shafiul Islam, a ruling party MP and former president of the Federation of Bangladesh Chambers of Commerce and Industry, described the current crisis as temporary, saying the government is handling the situation effectively.
Calling the business world an engine of growth, the businessman urged the tax authorities to be proactive and help businesses grow without hassle.
Not only Bangladesh’s economy, but the entire global economy is going through a difficult time in terms of economic stress, inflation, rising fuel prices and supply chain disruptions, said the Minister of State for Planning, Mr. Shamsul Alam.
Some indicators are uncomfortable, but the overall economy is doing well, he said.
The manufacturing sector grew by 23% in the last fiscal year, and other facts and figures show that the economy is on the right track.
“So there is no need to panic that the economy could collapse like Sri Lanka.”
The Minister of State, however, warned that with the national elections approaching, some people might want to take advantage by spreading rumors that the economy will collapse.
“The government is well prepared to deal with the economic situation and no danger is imminent.”
Professor Alam said the government should borrow from foreign sources to ease pressure on the US dollar.
Full automation of the tax system will reduce hassles and boost tax collection, he added.
Habibur Rahman, chief economist at Bangladesh Bank, said the central bank was considering the option of a currency swap with a number of countries to ease the pressure on the US dollar.
“But this will only be possible with countries with which we have a lower trade deficit. When the trade deficit is higher, we need to diversify our foreign exchange reserve portfolio because a currency exchange involves risks.”
According to BKMEA’s Hatem, the government should borrow from multilateral lenders to combat the current situation instead of raising fuel prices as this has had a massive impact on industries and the economy.
The business leader cited the activities of the National Revenue Board (NBR) as the main impediment to increased exports and imports.
“I have to speak to senior NBR officials almost every day as our members face harassment while doing business legally.”
“If a businessman does something wrong, punish him. But don’t harass honest businessmen for your unethical desire.”