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Planned road-map and industrialization- led economic development

The economy of Bangladesh has marked remarkable progress propelled by steady growth of the industrial and manufacturing sector in line with the economic graduation of Bangladesh by 2021. Industry as a whole shares 29 percent of GDP with composition of manufacturing, High-tech, labour intensive large, medium and small industry. The endemic belief goes by that incremental Industrialization and expected double digit economic growth and 8 percent growth by 2021 are fully interdependent. The Industrial base and network has extended over the past decade and many informal private sectors grew and recognized as potential sectors. Recent trend of Industrial expansion looks upbeat and visionary. To scale up the accelerated, sustained industrial growth towards next height of Industry and economy, a intensively coordinated, focused, result-oriented and priority-based initiatives need to be taken to address the current challenges ahead of industrial growth which is likely to undermine the potential of the country be recognized as regional investment and industrial hub.

And, recent preference of Bangladesh by industrially well-off economic hegemonies from Asia pacific Countries, South east Asian especially China and Korea to relocate their Manufacturing Business which immensely demand local Industry policy support and Industrialization friendly climate in no time. In this backdrop, following concerns and matters need to be addressed for Industrialization driven economic development of our economy:

♦ In the area of energy especially electricity generation, Bangladesh has achieved commendable progress supported by the focused reform program of the Government. The success of energy generation is inadequate to feed the industrial demand in line with growing industrialization. To meet the escalating energy demand, entrepreneurs rely on alternative energy sources and in many cases industry run far-below the production capacity resulting increasing cost of doing business, discouraging new investment which ultimately taking dire toll on the economic growth of the country and employment generation. Uninterrupted energy supply is the lifeline for industrialization and prime incentive to draw investment in diverse manufacturing units.

♦ To fasten the Industry growth, Rationing and Redistribution of gas on priority is essential. This redistribution will heighten the Industry Contribution to export-oriented industry led economic growth. Textile Industry has so far BDT.2100 Crore Investment dysfunctional due to primary energy shortage which downsizes additional $2Billion export earning in textile and RMG sector.

♦  $50 billion RMG export earnings target by 2021 requires special energy power and utility support package as well all relevant and exclusive incentives for unrestrained and smooth growth of this Industry as this growth has unprecedented momentum and multiplier impact on every aspects of economy including economic graduation and Industry-led inclusive socio-economic transition.

♦ The bank interest rate needs to be lower encouraging New investment in Industrial and Manufacturing sector to achieve the 33% Industry and 21.5% manufacturing sector contribution to GDP in the 7th Five-Year plan.

♦ To implement the goals of “Vision 2021″, it is essential to develop long term road map to establish and promote new industries in specialized sectors and potential sectors such as backward linkage industries of textiles, shipbuilding, pharmaceutical industry, light engineering, leather, jute, plastic products, agro-processing and ICT. Moreover, target oriented supportive policy measures need to be undertaken to safeguard the growing local industry as well as promoting import substitute industrialization attracting investment in backward linkage industry.

♦ The BDT.8000 Crore import-oriented-Automotive Industry needs long term roadmap incorporating encouraging fiscal and non-fiscal support and be recognized as specialized Import substitute Industry. We advocate replacing foreign imports with domestic production.

♦ SME entrepreneurship needs to be promoted by crafting SME friendly business environment underpinned by revised SME policy, infrastructure, and easy financing access. Cooperation can be extended to Industry Ministry in developing SME friendly environment by establishing SME Entrepreneurship Help Desk as DCCI caters one of the largest SME development projects. SME sector is the lifeline of our economy accounting for 40% to our national economy and 80 percent of nationwide employment, SME focused policy ratification and enforcement is inevitable and timely which need to be taken in account.

♦ Developing 100 EZs and SEZs under public private partnership will contribute to create growth conducive environment attracting domestic and foreign investment. Planned and compact coordinated actions need to be taken to get SEZs functional within targeted time-frame.

♦ Development of proposed Sonadia Deep Sea port commensurate Bangladesh to be emerged as ‘regional maritime connectivity hub’ connecting India, China, Myanmar and South-east Asia. It will rationalize time, transport cost in cross-border trade and connect Global Value Chain process positioning competitiveness of Bangladesh in International trade.

♦  The accreditation and standardization certificates issued by BSTI has yet to be created confidence of authorities in importing countries as well as buyers showing lack credit-ability BSTI reorganization.  In order to boost our export, we have no alternative to overcome the ‘BSTI international reorganization crises. A global standard acceptable practice in collaboration with internationally recognized accreditation bodies needs to be infused in BSTI in order to improve the technical efficiency and gain the reorganization of importing countries.

♦ To proliferate modern innovation in the country, protection of intellectual property and creative innovation is a must. A focused development program needs to be undertaken to strengthen DPDT in line with the framework of WIPO.

♦ Deemed exporters in leather and textile are very instrumental to facilitate the incremental RMG and Footwear Industrial and export growth. These industries and other potential deemed industries have to be taken care of with fiscal and non-fiscal benefits to support strengthening backward linkage Industrial growth.

♦ To promote diversified export-oriented industrialization, comprehensive, coordinated and target-oriented programs need to be undertaken on product diversification, and product innovation.

♦ The jute industry in Bangladesh has re-emerged with the potential of accelerated growth drawing global attention as environmentally compatible product. In order to attract local and foreign investment in diversified value segment of jute industry a reformed policy road map along with fiscal and non-fiscal support need to be undertaken.

♦ Department of Environment has modified the Air Quality Standard for industry to 200 micrograms per cubic meter in every eight hours with previous limit of 500 micrograms per cubic meter. Due to reduction of the limit of air quality standard, new industrial units struggle for Environmental Clearance Certificate. Re-instatement of previous standard will help pending projects to kick-off. Central ETP in the proposed EZs under the financial support of Government and low cost financing tool which guarantees both private investment and environment.

♦  Considering the environmental and public health impact, the relocation of tannery factories from Hazaribagh area to the Savar Tannery Park is a praiseworthy initiative of Government. The process of re-location has got a momentum though many factory owners are lagging behind in relocation. Rational time-frame further would help easy and convenient relocation process.

♦  Research and development is inevitable for development of the specialized industry and priority sector. Adequate investment needs to be made in R&D for promoting innovation, diffusing the knowledge-flow to the entrepreneurs at a large scale to accelerate industrialization growth.

♦ Sustainable Industrial growth will be in the forefront role in achieving SDG 2030. National Industry policy and sector specific policies, frameworks need to be amended incorporating sustainability and environment-friendly dynamics in line with SDG 2030.

♦ Priority should be given on balanced development of the country through widespread diffusion of local industrial development including least developed regions. In this connection, relatively bleak and vulnerable districts mentioned in the Industry policy need to be improved with required infrastructure facilities to spur industrialization across the country. Alongside implementing ‘balanced development slogan ‘one district, one product’ will progress industrial regionalization and regional economic sufficiency.

♦ In the proposed National Industry Policy 2015, Crude Oil Refinery, Power Distribution and Transmission, Exploration of Natural Resources are in restricted Industry which should be freed and involved in priority sector encouraging private sector participation.

♦  For development of the priority sector as identified in the proposed National Industry Policy 2015, inter-ministerial comprehensive short, mid, long-term investment and development plan with course of actions.

♦ A development strategy in collaboration with private sector needs to be enforced to transform unskilled workforce into demand driven semi-skilled and skilled workforce subject to high priority and priority Industry requirement equipped with functional knowledge to meet soaring and consistent local industry needs. Tuition- free Industrial vocational and technical education for diverse skill development needs to be set up across the country considering potential job creation target in seventh five year- plan, RMG Industry expansion by 2021, and 100 Economic zones within decade.

Economy is in the juncture of high aspiration transition as SDG 2030 has been endorsed globally which has got overwhelming critical Business and Industrial challenges for our emerging economy. As a result, the Industry policy, long term Industrial development plan and other industry allied policies need to be aligned and fine-tuned and sustainable in the common direction and SDG compatible. This SDG Journey is expected to bring out robust maneuvering and reform in many forms within our Industrial structure and ambience resulting and ushering new era of reformed and rejuvenated exclusive and multilateral Industrial regime in Bangladesh in the days to come.

 

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