Published in The Daily Star on Sunday, 03 January 2016
Industrial policy must be executed fully: analysts
Star Business Report
Industrialists yesterday called for proper implementation of the upcoming industrial policy to drive economic growth.
If the policy is not implemented it will remain as a wish-list of the government as in the past, said Mahbubur Rahman, president of the International Chamber of Commerce-Bangladesh.
Subsequently, he called for measures such that implementing agencies are bound to execute the policy.
Zaid Bakht, a former research director of the Bangladesh Institute of Development Studies, backed him, saying there has to be a comprehensive action plan to implement the policy.
Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association, called for making the industrial policy binding by turning it into a law, in order to ensure its proper implementation.
They spoke at a discussion on the upcoming industrial policy organised by the Newspaper Owners’ Association of Bangladesh (Noab) at the office of daily Prothom Alo in the capital. The industries ministry has formulated the Industrial Policy 2015 following consultation with ministries, experts from think-tanks and representatives from the private sector in the last one year.
It will soon be sent to the cabinet for approval, said Industries Secretary Md Mosharraf Hossain Bhuiyan.
The ownership of the policy would be shared by all related ministries as the action plans were formulated with their participation, he said, adding that an action plan will be formulated outlining who will do what.
Industries Minister Amir Hossain Amu said the bottlenecks confronting the country’s industries are long-running, but some of them have already been removed.
The rest will be removed gradually as their removal is necessary to achieve the visions for 2021 and 2040.
Amu said his ministry has undertaken a raft of measures including removal of bottlenecks standing in the way of industries.
This includes steps to set up parks for manufacturing raw materials for pharmaceutical industry and speedy relocation of leather and plastic factories out of the capital.
If any problem arises, it will be sorted out through inter-ministerial meeting, and, if necessary, the prime minister will be consulted with, the minister added.
Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue, said it is everybody’s responsibility to implement the policy.
But unfortunately the industrial policy has become the policy of the industries ministry as it formulates it.
Time-bound targets have to be set for other ministries so they carry out their duties properly, he said.
Quoting one foreign investor, the economist said the industrial policy in India is complex but transparent compared to that of Bangladesh.
Moazzem said the implementation of the policy is not evaluated. “If we can do that, we will be able to spot the deficiency in implementation.”
The economist also said Bangladesh would lose some preferential market access after the country becomes a middle-income nation after 2024.
“New kinds of laws related to labour, environment and intellectual property rights will come into force for Bangladesh. We have to keep this in mind.”
The government should look into whether there is overlapping in facilities being provided by the Bangladesh Export Processing Zones Authority, the Bangladesh Economic Zones Authority, the Board of Investment and the Bangladesh Small & Cottage Industries Corporation, he said.
Muhammed Aziz Khan, chairman of Summit Group, called for digitalisation of land records so one can know about land ownership.
“Because of lack of digital records, it has become difficult to purchase a piece of land without spending 2-3 years,” he added.
In the past the government always tried to come up with a comprehensive industrial policy in order to please everybody, Bakht said.
“But in so doing, you end up with a lack of focus. Unless you take a categorical position you are not giving the right signal. You will have to have a complete action plan.”
He also pointed out the flaws of the draft policy.
The preamble of the draft policy said that the country will be self-sufficient in meeting the demand of industrial goods and products.
But no country in the world tries to do that as it will not be wise from a comparative advantage point of view, he said.
The researcher also took a swipe at BoI for its weak pre-investment counselling capacity, saying if somebody approaches the agency for information about the potential areas for investment it will not be able to give them the service.
Giving an example of the lack of coordination among the state agencies, Bakht said there is also lack of coordination between the industries ministry and the Bureau of Statistics as the latter does not follow the industrial policy for definition of small and medium enterprises.
Noab Treasurer Matiur Rahman Chowdhury called for a cut in import duties for newspapers. The country levies 25 percent as duties and value-added taxes, whereas it is 5 percent in many countries, including the neighbouring ones.
The industrial policy will not give any positive result if the industries do not survive, he added.
Mir Nasir Hossain, a former president of the Federation of Bangladesh Chambers of Commerce and Industry, said the local industries have to be protected.
It has become very difficult to reach break-even for a company as the costs of doing business and land are high, he added.
Zahid Hussain, lead economist of the World Bank’s Dhaka office, said the success of a policy relies upon a number of issues such as an efficient entrepreneurial class, functional bureaucracy, skilled workforce, cultural and linguistics similarities, equality and influential business community.
“In Bangladesh, we have an emerging entrepreneurial class. But there is a deficiency when it comes to skilled workforce and bureaucracy.”
At the discussion, a number of speakers also called for freeing up industrial plots now being held by loss-making state-owned enterprises and allocate them among industries.
“We are not getting any value for money from these tracts of land,” said Hussain of the WB.
These unused industrial parks should be utilised by way of allowing both local and foreign investors to invest, he added.
Tapan Chowdhury, managing director of Square Textiles Ltd, pointed out that the current policy has not recognised backward linkage and textile sectors as thrust sectors although they are an important part of the garment sector.
The government should arrange all utility facilities at the economic zones and other industrial parks as it is very difficult for an investor to manage gas, water, power services on their own.
He also said the government should allow companies to produce electricity through captive power system as it is more efficient.
Shamim Ahmed, a former president of the Bangladesh Plastic Goods Manufacturers and Exporters Association, proposed keeping exit provision in the industrial policy when a business fails, a proposal that was supported by a number of participants.
“We set up factories, we take risk, we create jobs and we pay taxes. Sometimes, we may fail. But we cannot exit if we fail. It cannot be an industry-friendly policy if we cannot exit,” he added.
Matiur Rahman, president of Noab, moderated the discussion, while Md Salim Ullah, senior assistant secretary of the industries ministry, also spoke.
Published in The Financial Express on Sunday, 03 January 2016
City meet urges industrial policy execution
FE Report
Leading industrialists, business leaders and economists at a discussion on Saturday stressed proper implementation of the new industrial policy to spur industrialisation in the country.
They also stressed elimination of barriers to industrialisation.
The discussion on ‘Our expectations from National Industrial Policy-2015′ was organised by the Newspaper Owners’ Association of Bangladesh (NOAB) in the city. Industries Minister Amir Hossain Amu attended it as the chief guest.
“Without proper implementation of the new policy, it will remain a wish-list of the government,” said Mahbubur Rahman, President of the International Chamber of Commerce, Bangladesh (ICCB) at the discussion.
He also said previously there was a mindset that it would not be possible to implement the industrial policy and so, it is important to make its proper implementation.
Dr Zaid Bakht, former research director at the Bangladesh Institute of Development Studies (BIDS), opined that there had to be a comprehensive action plan for implementing the policy.
Dr Zahid Hussain, lead economist at the World Bank’s Dhaka Office, was of the view that the success of an industrial policy depends on conditions like skilled entrepreneurs, efficient bureaucracy and human resources.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Siddiqur Rahman stressed a legally-binding industrial policy to ensure its proper implementation.
Mir Nasir Hossain, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said local industries had to be protected.
The industries ministry framed the Industrial Policy 2015 after a series of consultations with policy makers, experts, industrialists, businessmen and other representatives from the private sector in the last one year.
“It will soon be sent to the cabinet for approval,” said Industries Secretary Md Mosharraf Hossain Bhuiyan.
He also said that an action plan would be formulated outlining who would do what.
Industries Minister Amir Hossain Amu said that necessary initiatives would be taken for coordination among the ministries through inter-ministerial meetings for removing all barriers.
“We have already provided necessary support in various sectors including pharmaceuticals, leather and plastic sectors. Other issues will be discussed in the inter-ministerial meetings, if necessary, in the PM Committee meeting”, he added.
Among others, Muhammed Aziz Khan, chairman of Summit Group, Tapan Chowdhury, managing director of Square Pharmaceuticals Ltd, AK Azad, former president of FBCCI, Dr Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue (CPD), Shamim Ahmed, former president of Bangladesh Plastic Goods Manufacturers and Exporters Association, Matiur Rahman Chowdhury, treasurer of NOAB, and Md Salim Ullah, senior assistant secretary of the industries ministry, also spoke. Mr Matiur Rahman, president of NOAB and editor of the daily Prothom Alo, moderated the dialogue.
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