FBCCI against hiking lending interest rate

President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Jashim Uddin on Saturday said that domestic industries would fall into difficulties if the current lending rate is increased.

He said this while speaking at 'ERF's Dialogue' as the chief guest, organized by the Economic Reporters' Forum (ERF), at its auditorium in capital Dhaka on Saturday.

Jashim said that the interest rate of bank loans cannot be increased for the sake of expanding investment and keeping all the industries running in the country. "If the interest rate is raised, many of those will lose the capacity to operate and to produce goods."

He said the capacity of the bank is needed to be increased by reducing the additional expenses. Expenditures should be reduced in other areas of the bank, including through reducing expensive branches.

In this context, the FBCCI president also said the US has increased interest rates to strengthen the dollar. "Their formula will not be implemented in Bangladesh. Policies should be adopted keeping in mind the industry of the country."

He also urged the government to solve the energy crisis by encouraging the use of coal in power generation.

"We have to use our own coal. In addition to increasing investment in industry, environment-friendly energy cooperation will be needed for the development of the country," the FBCCI chief said.

Mentioning that Bangladesh is the ninth largest consumer markets in the world, he said that foreign investment will come to the country and cooperation should be increased to sustain existing investments and attracting new investments.

The FBCCI President also said if the businesses do not get gas and electricity now, they would fail to deliver products according to the orders of foreign buyers.

As a result, he said customers would no longer be available once they return. In this case, the illegal gas connections should be stopped and other steps should be taken to keep continuing the gas supply in the industry.

He suggested a proposal regarding the supply of fuel and said that the price of fuel has increased in the world market. "So, gas has to be imported at a higher price. In that case, traders are willing to pay higher prices to ensure uninterrupted gas in industrial plants."

Jashim said that the government is taking more tax than what it is giving subsidy on gas. "About 47 percent tax is on LNG and Taka 24 per liter on diesel. By reducing this tax rate, the new reasonable price can be fixed by adjusting the excess price."

He opined that the businessmen should also take responsibility to keep the industry running. "Once again the tax should be reduced and the price of energy should be kept at a tolerable level."

Jashim also said that there is no need to borrow from the International Monetary Fund (IMF) by sacrificing the country's dignity.

"The condition of Bangladesh is not so bad that the loan has to be taken on any condition from the IMF. Any initiative to increase the lending rate will impact production cost as well as raise a burden on the customers," he added.

In response to a question about possible money laundering attempts during the election year, Jashim said since Bangladesh Bank has said that they have found proof of up to 200 percent excess price under the guise of imports, they should bring those involved under the law. "If not, you need to stop talking funny to become popular."

He said those who launder money through under invoicing and over invoicing should be caught as the FBCCI wants the government to take disciplinary action in this regard.

Replying to another question about the Prime Minister's statement regarding the possibility of famine in the country ahead of the possible global recession, Jashim said if there is a famine, it will not only be in Bangladesh, but also in the whole world.

"Bangladesh is not out of it. That is why we need to pursue austerity. Apart from this, we have to work on the agricultural sector. In this case, the Netherlands, Brazil, and Thailand can follow those who are successful with food production," he added.

ERF General Secretary SM Rashidul Islam moderated the program with its Vice President M Shafiqul Alam in the chair. ERF members were present on the occasion.

Source: BSS