BANGLADESH: According to BGMEA president Budget 2008-09 is not export-friendly

Exporters criticised parts of the budget for what they said was a lack of clear focus on exports, a day after it was proposed by finance and planning adviser AB Mirza Azizul Islam."The budget does not seem export-friendly," said BGMEA president Anwar-ul-Alam Chowdhury Parvez on a note of criticism of the budget proposed for fiscal 2008-09.

"We have some doubt about the proposed budget. It runs a Tk 30,000 crore deficit." If the government takes loans from banks to meet the deficiency, investment in the private sector will suffer from a fund crunch," Parvez told a meeting of different exporter associations at the office of Bangladesh Garment Manufacturers and Exporters Association.

For industrialisation, he said, the biggest challenge was the gas and power crisis. The proposed budget says that 1187 megawatt power would be added to the national grid in fiscal 2008-09, followed by 450 megawatt to be added in the following year, which the BGMEA president said was frustrating.

Parvez urged the government to stop taking loans from lending agencies for infrastructure development."Instead of taking loans from the World Bank and IMF, the government should take to the BOT system to build infrastructure."

"For a boost to exports, the government should assure industrial firms of stable, correct policy," he said. "We think tax breaks should continue for export-oriented firms for five years. Also, the government should provide a 10 percent cash incentive," said the BGMEA president. On the abolition of the indemnity bond system, Parvez said: "We used to buy machines against indemnity bonds, now the system has been abolished. Now a 1 percent tax system has been put in place."

The BGMEA chief demanded the withdrawal of the tax.The government has set a June 30 deadline for industries to set up effluent treatment plants to go environment-friendly.

"But the small factories are failing because of a lack of funds. We asked the government to give loans at 2.5 percent interest to set up effluent treatment plants."

"We had asked the government not to impose duty on the import of ETP machineries, but there was no announcement about it in the budget."

Chiefs of 15 export associations participated in the discussion meeting.

At the discussion, Bangladesh Plastic Goods Manufacturers and Exporters Association president Md Jasimuddin said: "If one has to do business on a full bank guarantee, costs will multiply. "So the provision for the 100 percent bank guarantee has to be withdrawn."

Bangladesh Textile Mills Association president Abdul Hye Sarker said: "Industries outside the EPZs don't enjoy facilities given to the industries inside. But the industries outside EPZs pay more tax." Bangladesh Pharmaceutical Industries Association president SM Shafiuzzaman said: "The government is paying little attention to the country's rapid expanding pharmaceuticals industry, but we don't get financial assistance."


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Added: June 15, 2008 Source: Agencies
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