The eight-point charter of demands, raised by the top apparel sector trade body as stimulus package, appears to ‘demonstration effect’ of the Western approach to addressing the financial meltdown, devoid of prudent exercise in Bangladesh context.
Saying so, the country’s economists have generally opposed any financial package bearing chance of abuse, cautioned the government about any whimsical formula to support only one sector and recommended fiscal measures under a holistic package to deal with negative effects of current global recession on various industrial sectors.
Bangladesh Garment Manufacturers and Exporters Association on Monday put forward the eight-point stimulus package for export-oriented apparel sector, containing cash incentives, special exchange rates, less than 7 per cent interest rate, extension of long-term loan repayment schedule, removing value added tax, subsidised diesel for generators, 12 captive power plants and rationing system for garment workers.
When their comments on such package were sought, the economists further suggested measures for protecting the country’s remittances earning and creation of higher domestic demand through massive development works and employment generation not only to save the losers of overseas jobs but also keep the domestic economy as a whole vibrant.
‘Their demands are presumably the demonstration effects of the bailout and stimulus packages offered in Europe and America, which are being criticised though. The BGMEA leaders are artificially magnifying the crisis effects on Bangladesh,’ Anu Muhammad, economics professor of Jahangirnagar University, told New Age. He felt that the BGMEA as a strong lobby was trying to take advantage of the situation.
In a similar vein, Anannya Raihan, executive director of research organisation D-Net, said the apparel sector had in the past manage to reduce duties on the plea of decline in the businesses and exports. ‘We have seen BGMEA since 1995 engaged in panic mongering as they are doing now. Global recession has become an opportunity for them to demand something,’ he added.
Both economists Atiur Rahman and Mustafizur Rahman suggested measures such as fund for providing the investors loans at lower interest rates and also persuading the banks to fund specialised sectors in a manner that they could easily face the global recession.
‘Before announcing any package the government should undertake immediate but in-depth study. We should focus more on institutional approach instead of distributing lump sum to deal with the situation,’ said Atiur Rahman, chairman of research organisation Shamunnoy
He mentioned that the government should immediately send a special envoy to countries like Malaysia to lobby for assured employment of Bangladeshi workers there.
Rahman, executive director of Centre for Policy Dialogue, proposed ‘focussed fund’ for the affected expatriate workers, skill development scheme for outgoing workers and implementation of development projects to keep domestic job market vibrant.
He pointed out that the government would have to fix its priorities to achieve the goals of overcoming the global situation with local solutions. ‘The government can give incentive to those garment manufacturers would be able to export to new market destinations,’ said Mustafiz suggesting that reduced interests rate might also be made applicable for expansion of industrial units and import of machinery.
‘Bangladesh’s apparel industry, in three decades of its history, has hardly faced such a severe challenge,’ the BGMEA president, Abdus Salam Murshedy, said at a press briefing on Monday, seeking the stimulus package. Also, Annisul Huq, president of Federation of Bangladesh Chambers of Commerce and Industry, demanded Tk 6,000 crore for the export sectors to help them overcome the possible impacts of the global recession.
Anannya Raihan rejected the apprehensions of drastic decline in export order of readymade garments, citing the trends of placing orders for the next fall [September-October] and onward. ‘There is no possibility of fall in export demand of Bangladeshi garments at that point in tine although price may fall,’ he said.
‘I think, the government should take multi-prong approach to encourage all domestic industries, seek new market destinations like Latin America and activate Bangladeshi missions abroad to work for both exports and remittances,’ said Anu Muhammad.
Meanwhile, senior economist and former finance adviser Wahiduddin Mahmud told newsmen after a meeting with the finance minister, AMA Muhith, that the government should take budgetary measures to keep incentives to the export sector.
What economists say
‘We should focus more on institutional approach instead of distributing lump sum to deal with a situation.’ – Atiur Rahman
‘The government can give incentive to those garment manufacturers would be able to export to new market destinations.’ – Mustafizur Rahman
‘The BGMEA leaders are artificially magnifying the crisis effects on Bangladesh’ – Anu Muhammad
‘We have seen BGMEA since 1995 engaged in panic mongering as they are doing now. Global recession has become an opportunity for them to demand something’. – Anannya Raihan
The New Age
Saying so, the country’s economists have generally opposed any financial package bearing chance of abuse, cautioned the government about any whimsical formula to support only one sector and recommended fiscal measures under a holistic package to deal with negative effects of current global recession on various industrial sectors.
Bangladesh Garment Manufacturers and Exporters Association on Monday put forward the eight-point stimulus package for export-oriented apparel sector, containing cash incentives, special exchange rates, less than 7 per cent interest rate, extension of long-term loan repayment schedule, removing value added tax, subsidised diesel for generators, 12 captive power plants and rationing system for garment workers.
When their comments on such package were sought, the economists further suggested measures for protecting the country’s remittances earning and creation of higher domestic demand through massive development works and employment generation not only to save the losers of overseas jobs but also keep the domestic economy as a whole vibrant.
‘Their demands are presumably the demonstration effects of the bailout and stimulus packages offered in Europe and America, which are being criticised though. The BGMEA leaders are artificially magnifying the crisis effects on Bangladesh,’ Anu Muhammad, economics professor of Jahangirnagar University, told New Age. He felt that the BGMEA as a strong lobby was trying to take advantage of the situation.
In a similar vein, Anannya Raihan, executive director of research organisation D-Net, said the apparel sector had in the past manage to reduce duties on the plea of decline in the businesses and exports. ‘We have seen BGMEA since 1995 engaged in panic mongering as they are doing now. Global recession has become an opportunity for them to demand something,’ he added.
Both economists Atiur Rahman and Mustafizur Rahman suggested measures such as fund for providing the investors loans at lower interest rates and also persuading the banks to fund specialised sectors in a manner that they could easily face the global recession.
‘Before announcing any package the government should undertake immediate but in-depth study. We should focus more on institutional approach instead of distributing lump sum to deal with the situation,’ said Atiur Rahman, chairman of research organisation Shamunnoy
He mentioned that the government should immediately send a special envoy to countries like Malaysia to lobby for assured employment of Bangladeshi workers there.
Rahman, executive director of Centre for Policy Dialogue, proposed ‘focussed fund’ for the affected expatriate workers, skill development scheme for outgoing workers and implementation of development projects to keep domestic job market vibrant.
He pointed out that the government would have to fix its priorities to achieve the goals of overcoming the global situation with local solutions. ‘The government can give incentive to those garment manufacturers would be able to export to new market destinations,’ said Mustafiz suggesting that reduced interests rate might also be made applicable for expansion of industrial units and import of machinery.
‘Bangladesh’s apparel industry, in three decades of its history, has hardly faced such a severe challenge,’ the BGMEA president, Abdus Salam Murshedy, said at a press briefing on Monday, seeking the stimulus package. Also, Annisul Huq, president of Federation of Bangladesh Chambers of Commerce and Industry, demanded Tk 6,000 crore for the export sectors to help them overcome the possible impacts of the global recession.
Anannya Raihan rejected the apprehensions of drastic decline in export order of readymade garments, citing the trends of placing orders for the next fall [September-October] and onward. ‘There is no possibility of fall in export demand of Bangladeshi garments at that point in tine although price may fall,’ he said.
‘I think, the government should take multi-prong approach to encourage all domestic industries, seek new market destinations like Latin America and activate Bangladeshi missions abroad to work for both exports and remittances,’ said Anu Muhammad.
Meanwhile, senior economist and former finance adviser Wahiduddin Mahmud told newsmen after a meeting with the finance minister, AMA Muhith, that the government should take budgetary measures to keep incentives to the export sector.
What economists say
‘We should focus more on institutional approach instead of distributing lump sum to deal with a situation.’ – Atiur Rahman
‘The government can give incentive to those garment manufacturers would be able to export to new market destinations.’ – Mustafizur Rahman
‘The BGMEA leaders are artificially magnifying the crisis effects on Bangladesh’ – Anu Muhammad
‘We have seen BGMEA since 1995 engaged in panic mongering as they are doing now. Global recession has become an opportunity for them to demand something’. – Anannya Raihan
The New Age
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