DCCI
Set up spare parts, tools manufacturing units in EZs: Industries Minister
Industries Minister Nurul Majid Mahmud Humayun on Sunday called upon the private sector and foreign investors to set up spare parts and tools manufacturing unit in Bangladesh’s Economic Zones (EZs).
“The government is relentlessly working for the industrialisation of the country. Research and innovation in the sectors are more important,” he told a webinar organised by Dhaka Chamber of Commerce & Industry (DCCI) titled “Automobile Industry Development: Present Situation & Future Prospects”.
Japanese Ambassador to Bangladesh Ito Naoki said Bangladesh has a strong possibility to establish its own local automobile industry. “When we talk about export diversification, the automobile, light engineering and agriculture-based sector can play a vital role,” he said.
Japanese Mitsubishi Motors showed interest to invest in Bangladesh in the CKD (Completely Knocked Down Units) assembling plant, he said. “Mitsubishi and Ministry of Industries came to an agreement last month to sign an MOU to conduct a joint feasibility study on the viability of investment. It’ll create technology transfer and employment opportunities for Bangladesh.”
He also urged for policy support, tax benefits and incentives to grow the industry.
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Humayun said a comprehensive policy will be pursued especially for this industry, if needed.
DCCI President Rizwan Rahman said at least 5-10 years sustaining tariff policy should be taken to support the local vehicle assembling and manufacturing industry.
He said that Bangladesh’s automobile sector is mainly dominated by imported reconditioned and new vehicles mostly from Japan, China, India, Europe and the USA. Considering the growing market demand, local and foreign investors are now showing interests to invest in the automobile industry.
“Prior to the COVID-19, the automobile market was growing by 15 percent to 20 percent with 12 percent growth in auto parts yearly. Despite having potentials, the absence of long-term policy and consistent tax structure, lack of domestic source of raw materials and relevant skilled human resources, as well as- inadequate backward linkage limit the automobile manufacturing industry development,” he added.
He also urged for a long-term policy and a minimum 5-10 years sustaining tariff policy to support the assembling and manufacturing of vehicles. Rizwan also suggested setting up a separate Automobile Zone and allowing joint ventures for parts manufacturing to create local experts.
Presenting the keynote paper, Taskeen Ahmed, Deputy Managing Director of IFAD Group highlighted that Bangladesh has made a tremendous progress in the infrastructure sector in the recent past.
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He said the completion of Padma Bridge will create high local demand for commercial vehicles. Moreover, the BBIN Motor Vehicle Agreement would boost commercial vehicle growth on regional trade dynamics shift.
“After the draft Automobile Policy 2018, the market size of motorcycle industry went to a new height. Total investment in this sector is Tk 8,000 crore contributing 0.5 percent to the GDP now. Whereas, reconditioned car constitutes 50 percent of the total car market, on the other hand, 45 percent are used and only 5 percent are brand new. As per the draft, automobile policy government plans to impose a ban on used car imports give incentives to facilitate local industry,” he said.
Taskeen said the commercial vehicle market is around $1 billion and the growth will be sustained in the future. In the light engineering sector, the market size of auto parts industry is about Tk 1,400 crore with an annual growth rate of 12 percent, he said.
John D Dunham, Economic and Indo-Pacific Affairs Unit Chief of the US Embassy said Bangladesh was able to show tremendous growth especially during the last decade. “Bangladesh is graduating into a developing country; therefore, the government needs to tailor ideal policies like tax and investment policies. Bangladesh’s prosperity is important to the USA,” he said.
Md Touhiduzzaman, Managing Director of Pragati Industries Ltd, said, “We want vehicles to be manufactured locally. The more assembler will come the more the sector will boost. Also, focus needs to be given to spare parts manufacturing locally. Every assembler should have a research and development cell for improvement.”
Matiur Rahman, Chairman & Managing Director of Uttara Group of Companies said, “We’re far behind in this sector. A long-term policy and incentives will foster this sector. This is a promising sector and has the opportunity to attract private sector investment. “
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Engineer Syed Imtiaz Ahmed, President of Signal Stream Inc, Canada, said that if Bangladesh can focus on manufacturing electronic control units (ECU) in Bangladesh that are massively used by car and other vehicles manufacturers, then the country will be able to grab a portion of the world automobile industry very soon.
Abdul Haque, President of BARVIDA, said that the taxation policy should be industry-friendly and the industry needs more consistent policy support. The market of three-wheelers is being enlarged in Bangladesh. He also urged for policy consistency and creating affordability of middle-class people.
Hayakawa Yuho, Chief Representative of JICA Bangladesh, said an appropriate industrial policy is needed to protect and nurture the sector.
“The government may think of providing investment incentives to the private sector investors from home and abroad. The automobile policy should be carefully formulated and implemented since the situation in this sector changes day by day,” he said.
Budget 2021-22: 'Striking balance between revenue targets, facilitating businesses crucial'
Finding a balance between achieving revenue targets and ensuring a business-friendly environment is crucial to overcome the economic challenges unfolded by the pandemic.
The government's expenditure comes from revenue, but it always tries to facilitate the businesses, National Board of Revenue member of tax policy Md Alamgir Hossain said Saturday.
Alamgir was addressing the "Pre-Budget Discussion for FY2021-22" organised by Dhaka Chamber of Commerce and Industry (DCCI) in association with Samakal and Channel 24.
Economic Affairs Adviser to the Prime Minister Dr Mashiur Rahma said "Achieving the revenue target without hurting economic activities is a priority for the government."
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"However, our tax-GDP ratio is comparatively low due to rebates at different levels. To make it more acceptable to everyone, a global standard tax, value added tax (VAT), supplementary duty (SD) and customs duty rate need to be in place."
Dr Mashiur said frequent changes in tax rate may slow down business growth and he suggested a gradual increase in it with a minimum time frame.
Brac Chairperson Dr Hossain Zilllur Rahman said, "As the second wave of Covid-19 is going on, it may wallop the economy. The next budget should also have a plan of recovery like the last one. Social protection should get major attention in it."
Disbursement of loans under stimulus for the cottage, micro, small and medium enterprises (CMSMEs) should be faster, and for that, mobile financial services can be engaged as a delivery vehicle, he added.
Also read: Budget 2021-22: Finance Ministry's coordination council meets to set priorities, parameters
Zilllur Rahman added that to keep the growth trajectory upward, the domestic market needs to be incentivised along with the export sector. "We need a transition from cheap labour economy to skilled labour economy and a game-changing policy review needs to be framed."
DCCI President Rizwan Rahman hoped that the next budget would have special attention to taxation and VAT policy, infrastructure, industry and trade as well as the financial sector.
Mediation, arbitration for commercial disputes not being used widely: Salman F Rahman
Commercial disputes can be resolved through mediation if encouraged by the regulators, but settling such disputes can take four years in Bangladesh.
Also, many countries have introduced reforms like automatic assignment of cases to judges, specialised commercial court, electronic payment, and expansion of the alternative dispute resolution (ADR) framework to improve the litigation system.
They made changes to applicable civil procedure or enforcement rules and expanded court automation, too.
Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman said this while addressing the webinar "Country Competitiveness of Bangladesh: Key Reforms in Doing Business" organised by DCCI Saturday.
Also read: It's time to change the mindset on taxpaying: Salman F Rahman
The Global Competitiveness Index 2019 ranked Bangladesh 105 and the report also highlighted a profound competitiveness deficit in LDCs, he said.
To overcome the transition of economic graduation and to be among the top 100 in the World Bank's Ease of Doing Business Index, improving competitiveness is a prerequisite for Bangladesh, Rizwan continued.
"However, Bangladeshi policymakers are yet to take necessary initiatives in association with the private sector for improving country competitiveness."
Salman F Rahman, the prime minister's private industry and investment adviser, said at the webinar: "The entire judicial system needs revamping. We need to resolve the disputes quickly."
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"But the mediation and arbitration system are not being used widely in the country due to not having a standard civil litigation management timeframe," he continued.
Law and Justice Division Secretary Md Golam Sarwar said, "We are going to implement an e-judiciary project to foster effective and speedy disposal of cases including commercial disputes. Steps have been taken to amend the existing Insolvency Act 1997."
"For effective settlement of commercial disputes, the government is planning to set up commercial courts in Dhaka and Chattogram."
Firm promises of the govt led the paradigm shift in our economy: DCCI
To overcome the challenges and smooth transition of Bangladesh until 2026, Dhaka Chamber of Commerce & Industry (DCCI) on Monday suggested the government to sign FTA, PTA with potential countries or RTA with economic blocs, take preparation to implement the terms and conditions of TRIPS agreements, establish high-value product design and innovation centres.
Bring informal businesses into mainstream: DCCI
The Dhaka Chamber of Commerce & Industry (DCCI) on Tuesday urged the government to create a flexible regulation to bring informal businesses into the mainstream for their record and traceability so that access to fiscal benefits can be ensured.
UK keen to invest in Bangladesh’s higher education sector
British High Commissioner in Bangladesh Robert Chatterton Dickson paid a courtesy visit to Dhaka Chamber of Commerce & Industry (DCCI) to discuss various bilateral issues relating to trade and commerce.
New industrial sectors need more focus for post-LDC era: BCI leaders
Industrial sector leaders on Saturday urged the authorities concerned to pay more attention to the development of new industrial sectors to face challenges in the post-LDC era.
DCCI for SME act, new definition of CMSMEs
Dhaka Chamber of Commerce and Industry (DCCI) on Monday called on the government to formulate an SME act and redefine cottage, micro, small and medium enterprises (CMSMEs) in the upcoming Industrial Policy.
SMEs are lifeline to country's economy: Tipu Munshi
Commerce Minister Tipu Munshi on Wednesday said SMEs are the lifeline to the economy as its contribution to the country's GDP is about 26 percent.
Export diversification: DCCI for comprehensive trade policy
The Dhaka Chamber of Commerce and Industry (DCCI) has called on the government to formulate a comprehensive trade policy to promote export diversification and attract more foreign investments.