Say they are losing ground to regional peers
Of the money that has been laundered, bureaucrats have siphoned off the most. We businessmen do not want to take this responsibility. Those businessmen who steal money or gas should be caught and brought to justice. Their responsibility should not fall on us.
— Syed Nasim Manzur, President of Leathergoods And Footwear Manufacturer & Exporter's Association of Bangladesh (LFMEAB)
Bangladesh is losing ground to regional competitors as high interest rates push up business costs, according to top businessmen, as they call for a cut in the policy rate and reforms to the revenue system.
While the International Monetary Fund (IMF) has recommended a tighter policy to curb inflation, business leaders at a programme yesterday said the government should not follow every suggestion from development partners.
They also urged the resumption of the Export Development Fund (EDF), improvements to law and order, and measures to ease traffic congestion in Dhaka.
At the dialogue at the Bangladesh Investment Development Authority (Bida) headquarters in Dhaka, Energy Adviser Muhammad Fouzul Kabir Khan, Special Assistant to the Chief Adviser Lutfey Siddiqi, Bangladesh Bank (BB) Governor Ahsan H Mansur, Bida Executive Chairman Ashik Chowdhury, and National Board of Revenue (NBR) Chairman Abdur Rahman Khan replied to questions from around 100 business leaders and entrepreneurs from various sectors.
Addressing lending rates, Syed Nasim Manzur, president of Leathergoods And Footwear Manufacturer & Exporter's Association of Bangladesh (LFMEAB), told the central bank governor, "I have a humble request to you, businessmen cannot bear this interest rate anymore. It is becoming impossible for us to bear it."
"The cost of doing business is increasing a lot. We cannot compete with the market peers, especially with Vietnam and India," he added.
Manzur, also managing director of Apex Footwear Ltd, said that export orders could remain sluggish until February or March next year, as Western buyers turn to alternative sourcing countries.
He praised the NBR for recent reforms, including automated bonds and relief from the "terrorism of the HS Code". "Now we want relief from advance tax and tax at source," he said.
The Apex MD said it is not often questioned whether only businessmen have become rich or whether bureaucrats have become rich too.
"Of the money that has been laundered, bureaucrats have siphoned off the most. We businessmen do not want to take this responsibility."
"Those businessmen who steal money or gas should be caught and brought to justice. Their responsibility should not fall on us," he added.
Tapan Chowdhury, managing director of Square Pharmaceuticals, urged the government to take firm action against wilful loan defaulters. He said they had misappropriated depositors' money without consequence.
"The real offenders remain untouched, while genuine businesses are unfairly labelled as corrupt," he said.
At the dialogue, BB Governor Mansur said, "We must protect the economy without punishing industries. The law will apply, but productive assets and jobs must be protected."
He said the central bank aims to reduce inflation to 5 percent by the end of the fiscal year, down from a peak of more than 12 percent last year.
"Food inflation has dropped to 7.3 percent, and overall, to 8.2 percent. Once inflation stays below 7 percent, we will cut policy rates to 8 percent to 9 percent," he said.
Mansur commented that the exchange rate remains market-based, with occasional interventions to support reserves and imports. On the Export Development Fund, he said the BB supports its revival once reserves can cover six months of imports, even if it exceeds IMF preferences.
Acknowledging concerns over non-performing loans (NPLs), the governor said actual NPLs could be as high as 35 percent.
He also recognised private sector frustration with advance income tax and tax deducted at source, but said reforms to automate refunds and carry forward excess payments are underway.
Ashik Chowdhury, executive chairman of Bida, said investment reforms are beginning to show results through better inter-agency coordination and monthly private sector consultations.
He highlighted progress on the long-delayed National Single Window, the operationalisation of the Authorised Economic Operator system, and a digital portal, BanglaBiz, to streamline business services.
To boost foreign investment, he said Bida is piloting cashback incentives for non-resident Bangladeshis and offering a platform to connect foreign investors with local partners. The number of planned economic zones has been cut from 100 to 10, with a Free Trade Zone (FTZ) in Chattogram awaiting final approval.
"We have completed 24 out of 32 reform goals. Our aim is transparency, not perfection," Chowdhury said.
NBR Chairman Abdur Rahman Khan defended current tax policies but stressed the need for fiscal discipline and reforms.
He emphasised protecting local manufacturers through duty structures.
"Foreign banks earning profits in Bangladesh must be taxed," he said, criticising excessive tax waivers and calling for rationalisation of revenue and spending.
Energy Adviser Muhammad Fouzul Kabir Khan acknowledged a gas supply shortfall of more than 1,000 Million Cubic Feet per Day. Reforms are planned to streamline gas distribution and reduce interference.
Khan advocated shifting from road dependency to river and rail transport, noting that over 90 percent of goods are currently moved by road.
He highlighted progress on a locally developed integrated energy and power sector master plan and proposed refinery partnerships with global firms such as ExxonMobil.
"Wealth must come from production and innovation, not evasion or default," he said.
Lutfey Siddiqi, special assistant to the chief adviser, called for a move away from a "rotting system" towards performance-based governance.
"We may have improved from 1 to 5 percent, but we are still sitting on a 95 percent broken system," he said, urging a redesign of outdated rules of business and ministry structures.
Business leaders who attended the event included former FBCCI president Mir Nasir Hossain, Meghna Group MD Mostafa Kamal, East Coast Group Chairman Azam J Chowdhury, Transcom Group CEO Simeen Rahman, City Bank MD Mashrur Arefin, and Uttara Motors Chairman Matiur Rahman.
