[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

A clear roadmap for economy is absent

Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), has raised questions over whether the interim government was ensuring transparency in formulating economic policies and holding dialogues with stakeholders for reforms.

www.thedailystar.net

A clear roadmap for economy is absent
Debapriya says

Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), has raised questions over whether the interim government was ensuring transparency in formulating economic policies and holding dialogues with stakeholders for reforms.

At a pre-budget discussion jointly organised by NTV and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Tuesday, he cited the example of a new ordinance on tax reform that had been issued on May 12.

The ordinance sought to dissolve the National Board of Revenue (NBR) and replace it through the formation of two divisions -- one for policymaking and another for implementation.

This separation was earlier recommended in a white paper on the state of Bangladesh's economy, which was prepared by a panel led by Bhattacharya and submitted to the chief adviser on December 1 last year.

The separation of duties was recommended to avoid a conflict of interest, said Bhattacharya.

However, revenue officials embarked on a massive protest demanding to repeal of the ordinance and the development of the NBR as a separate and specialised institution.

With overseas trade and revenue activities suffering due to the protests, the government backtracked on its decision this week and promised to amend the law.

"When you do not fully follow the reform committee's suggestion and proceed to implement it (the new law) without any discussion, you inevitably face a regrettable consequence," said Bhattacharya, referring to NBR Chairman Abdur Rahman Khan.

"These will be the consequences even if you do the right thing without engaging in dialogue," he said.

He gave another example of how the stock market was now truly in a moribund state and, in a sense, had been sent to the intensive care unit.

If the Bangladesh Securities and Exchange Commission (BSEC) wants to bring about reforms in the stock market without consulting stakeholders, it will not be successful, Bhattacharya said.

"If there is no openness to dialogue, even a right approach can turn into a wrong one," he said.

"You must engage in discussion and give people the opportunity to speak. Otherwise, what has changed after the fall of a dictatorial government?" he questioned.

On the national budget for the upcoming fiscal year, he said he found no difference in the formulation of the fiscal measures.

The interim government has revised it, but there has been no structural change, said Bhattacharya, also a convenor of the Citizen's Platform for SDGs.

"Where are you giving incentives? Where are you granting exemptions? People do not know. The same lack of transparency that existed during the tenure of the previous dictatorial government is being witnessed now," he said.

He added that mega-projects which were undertaken by the last government were overvalued. "Where have you reduced it?" he questioned.

However, Bhattacharya said, the interim government deserves some thanks for a growth trend in foreign exchange reserves, stability in the foreign exchange market, and a gradual easing of inflation.

Nonetheless, a clear roadmap for the economy is absent, he said, adding, "There is no visible discussion on employment generation."

"What is the government's stance on disparity? This government must prove how it is different from the previous one and what it has done differently," he said.

"Will investors go for plans based on just your six-month plan? This government is legal, but it is not elected. What guarantee is there that the future government will continue its policies?" asked Bhattacharya.

Referring to World Bank data, he said, "Some 27 lakh people have become poorer during the interim government's period. Out of this, 18 lakh are women."

Responding to this, Anisuzzaman Chowdhury, special assistant to the chief adviser, said, "Do not go after it. This World Bank praised the previous government and legitimised that government.

"I can give you examples one after another," he said, adding that bringing about reforms during an economic crisis, which Bangladesh is currently facing, was very tough.

On the other hand, those opposing the reforms are well organised, he said, pointing at the NBR officials who staged the protest.

"These are the realities we are facing," said Chowdhury, adding, "Bangladesh's economy was in the ICU. It is no longer in the ICU."

Regarding discussions with stakeholders, he said he was engaging all stock market stakeholders to ensure sustainable reforms.

Abdul Moyeen Khan, a standing committee member of the Bangladesh Nationalist Party, pointed out that the NBR had not held discussions with the business community and political parties ahead of the national budget's formulation.

This was contradicted by NBR Chairman Khan, who said the NBR had indeed held talks with the entire business community and journalists and would try to incorporate their feedback.

"We will try to increase tax revenue, expand the tax net, and reduce non-tariff barriers," he added.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, Muhammad Abdul Mazid, a former NBR chairman, and Md Hafizur Rahman, administrator of the FBCCI, also spoke at the event.​

 

[Saif]

Startups boom but go bust for caregivers' neglect

Startups are coming up in encouraging numbers in the SME sector but many entrepreneurs are failing to sustain and closing their businesses within a year or two, for lacking in tricks of the trade, sources said. According to sector-insiders and experts, the expected growth of Bangladesh's o

thefinancialexpress.com.bd

Missed value addition to BD economy

Startups boom but go bust for caregivers' neglect

Lax marketing knowledge, strategies, entrepreneurs' training throttle SME sector's potential growth

REZAUL KARIM
Published :
May 30, 2025 00:35
Updated :
May 30, 2025 00:35

Startups are coming up in encouraging numbers in the SME sector but many entrepreneurs are failing to sustain and closing their businesses within a year or two, for lacking in tricks of the trade, sources said.

According to sector-insiders and experts, the expected growth of Bangladesh's once-thriving cottage, small and medium enterprises is getting stymied for a lack of effective marketing knowledge, necessary strategies and training of the entrepreneurs.

In the context of Bangladesh, says South Asian Network on Economic Modeling (SANEM) executive director (ED) Dr Selim Raihan in the light of an anatomy of the sector, the challenges facing new SME entrepreneurs, particularly in the area of marketing, are indeed critical.

"Many small business owners begin their ventures with enthusiasm but without sufficient knowledge or strategic planning in marketing. As a result, they struggle to identify target customers, position their products effectively, and compete with established brands," he says about the Achilles' heel that kills startups in the otherwise-potential sector.

The economist, with expertise in economic structuring, says the lack of marketing knowledge for feeding products produced by the sector's owners is a widespread and major problem facing small businesses, which could lead to business failure in the sector.

Although the SMEs are drivers of economic growth and job creation in the country, most SME owners lack formal knowledge and strategic skills in products marketing. They often do not understand the difference between conventional and unconventional marketing methods.

Moreover, due to limited knowledge about the domestic and international markets of the product, they lag behind in product promotion and market linkages, he says, adding that for a lack of adequate knowledge about modern technology, entrepreneurs concerned cannot improve the quality of products and create versatile products tailored to the needs of the buyers.

Effective branding and attractive packaging, determining profitable prices are essential to survive on the competitive market. But SMEs usually pay less attention to this aspect or cannot create quality packaging for lack of financial budget, as per a document produced by the SME Foundation.

There as been a widespread expansion of online marketing and e-commerce platforms these days with faster advances in communications technology. But many SMEs are found still lagging behind in implementing digital marketing strategies.

Because of inadequate budget for conducting marketing activities, inability to bear advertising and promotion costs are major challenges for SMEs. It is often difficult to compete with big brands and foreign products on the market.

Sometimes, even though they are able to produce products according to market demand, SME entrepreneurs face challenges in procuring raw materials and marketing their produced goods for a lack of policy support from various institutions.

The experts suggest taking requisite steps to increase and improve marketing skills and required strategies, organising training and workshop, providing marketing-consulting services, supportive policies and institutional support, special incentives and facilities for SME products marketing by the government.

They also recommend expansion of digital marketing, effective use of social -media platforms, including Facebook and Instagram, product listing on e-commerce websites/B2B websites, improvement in product diversity and quality, product design according to customer needs through market research.

Mr. Raihan thinks that, often, SME entrepreneurs lack understanding of digital marketing, customer behaviour, branding, and distribution channels. This knowledge gap leads to poor sales performance, cash-flow issues, and ultimately business failure within the first one or two years.

For weathering the adversities, the SANEM ED opines that a multi-faceted approach is needed. Firstly, aspiring entrepreneurs must be encouraged and supported to undergo training on basic business skills, particularly in marketing, sales strategy, and customer- relationship management. Secondly, there needs to be greater collaboration between government agencies, educational institutions, and the private sector to develop localized and practical training materials tailored for SMEs.

The SME Foundation document suggests increasing product quality and complying with international standards, creative and eco-friendly packaging innovation, organization of fairs/product exhibitions in local and international markets, dissemination of improved courier and logistics services especially in rural areas.

The experts advise overcoming product -marketing challenges through the combined efforts by government, non-governmental organizations, financial institutions and SME entrepreneurs.

To address the various challenges of SME product marketing, the SME Foundation has been providing training in the production of quality products with the help of modern technology since its inception. For the marketing of products of SME entrepreneurs from all over the country, according to SME Foundation officials, the Foundation organises the National SME Product Fair, Divisional SME Product Fair, Heritage Handloom Festival and Buyer-Seller Match-Making Programme in Dhaka, according the document.

In addition, to facilitate the entry of SME entrepreneurs' products into the international market, the SME Foundation supports the participation of SME entrepreneurs in the Dhaka International Trade Fair and international fairs in various countries.

The SME Foundation has so far organized 11 national SME product fairs, 91 regional and divisional SME product fairs, and 4 heritage handloom festivals to expand the market for entrepreneurs.

Managing director Anwar Hossain Chowdhury said there have many problems in the SME business sector. The entrepreneurs have no necessary knowledge and information about products marketing that is a big problem.

He added that after producing products, such entrepreneurs cannot sell the items among the clients due to lack required strategies.

He recommended setting up a SME products exhibition centre as there is no centre in the country currently. Where they will arrange their products and buyers will come and see them and place orders from display hub.

Mr. Chowdhury due to lack of information on related policies, law and rules are also hindered the export growth of the SME items despite huge demand in the global market

In the fiscal budget for 2025-26, now days away, the SME Foundation has sought an allocation of Tk 5.0 billion to help enhance the contribution of SME sector to the country's economy.

According to the preliminary report of the Economic Census 2024 of the Bangladesh Bureau of Statistics, there are some 11.8 million Cottage, micro, small, and medium enterprises (CMSMEs) which contribute to around 30 per cent of the country's gross domestic product (GDP).

A previous survey, carried out in 2013, shows that the SME sector employs over 20 million people, which accounts for nearly 85 per cent of total industrial- sector employment.

President of Small and Medium Enterprises Owners Association of Bangladesh Md Ali Zaman said they who are professional in the SME sector, they are continuing business anyhow. But, the main problem is competition with large industrial group. SMEs cannot survive by marketing with large companies. As a result, ultimately, the business has to be wound up.

He suggested making the Competition Commission effective and implementing the competition law-2012 properly.

According to the Economic Survey 2024, about 6.47 per cent (or 0.77 million) of the country's 11.88 million SME entrepreneurs are women.

Selim Raihan observes failure to conduct proper market research before launching their products, which further limits their ability to sustain operations in a competitive environment.

The SANEM ED believes that the government can play a significant role by institutionalizing SME development centers across the country that offer continuous learning, business counselling, and marketing support services.

Additionally, the government should invest in building digital platforms where SMEs can showcase and sell their products, thereby reducing their dependence on traditional, costly marketing channels, says the professor of Dhaka University.

The SANEM chief director has emphasized that simplified access to market data, consumer insights, and e-commerce tools can empower entrepreneurs to make informed decisions. Also, financial support through grants or soft loans earmarked for marketing and product development can ease initial burdens.

"If such systemic support is provided, many SMEs in Bangladesh will not only survive but thrive on a competitive market."

Taslima Miji, founder-managing director of Leatherina, thinks there are many problems in the SME sector. She opines that new SME entrepreneurs with potential can be given tax holidays for a certain period.

"The government may offer exemptions to the sector that can add value to the economy so that they can run business after starting a new one," she notes.

Currently, there are more than 10 million SMEs across the country.​

 

[Saif]

Economic indicators are far from bright

Some of the vital economic indicators that have come to light of late are far from encouraging. The country's gross domestic product (GDP) has been projected to grow at 3.97 per cent by the end of this fiscal year. This is the slowest growth in the past 34 years excluding the year 2020 when Covid-1

thefinancialexpress.com.bd

Economic indicators are far from bright

Nilratan Halder
Published :
May 30, 2025 00:10
Updated :
May 30, 2025 00:10

Some of the vital economic indicators that have come to light of late are far from encouraging. The country's gross domestic product (GDP) has been projected to grow at 3.97 per cent by the end of this fiscal year. This is the slowest growth in the past 34 years excluding the year 2020 when Covid-19 had its heavy toll on the economy and its growth rate slumped to 3.45 per cent. Similarly, during the first 10 months of the fiscal year 25, the execution rate of the Annual Development Programme (ADP) was 41.31 per cent, marking the lowest implementation rate in the past 15 years during the period under scrutiny. That may, keeping with the tradition of a late spurt, albeit suspect, rise up to a higher percentage but obviously will fall far behind the hundred per cent target.

If these less-than-positive economic indicators are not enough, revelations made at a conference titled "Advancing Gender-Responsive Budgeting and FfD4 Outcome" further add to the discomfort. Here the acronym FfD4 in its full form is the Fourth International Conference on Financing for Development held in Seville, Spain from June 30 to July 3 this year. If the Seville conference focused on how to finance sustainable development and reform the international financial architecture, the one organised by the Citizen's Platform for SDGs, Bangladesh and UN Women Bangladesh sheds light on the impacts of a recessionary economy on women in particular. That it has been made worse by the external adverse developments including measly international investment climate is also a fact. An analysis by the think tank Centre for Policy Dialogue finds that as many as 2.1 million people lost their jobs in the first half of the current fiscal year. What is particularly disconcerting is that 85.7 per cent of them to have become unemployed are women.

Now if the gender-biased job losses are read even against the low GDP growth that is likely to contribute a modest $12 billion to the $450-billion economy in the fiscal year 2023-24 to make the size of the economy $462-billion strong in the ongoing fiscal, a foreboding picture of women's empowerment emerges. At the same time, it also points to the economic malaise on account of gross gender disparity in economic participation. It proves to be a cruel irony when per capita income is set to rise from $2,738 in the previous fiscal to $2,820 in the 2024-25 fiscal year. When a large number of people, particularly women whose participation in economy and development misses the gender parity by a wide margin, become freshly jobless, it is a consequence of decline in various economic indicators or even retrogression in some sectors.

To make the matter still worse for the interim government, the National Board of Revenue has failed to achieve the revised and down-sized revenue earning target by Tk 715 billion in the first 10 months of the financial year 2024-25. The revenue growth at a decelerated rate of 3.24 compared to the previous year during this period is unlikely to make a recovery in the remaining two months of the fiscal. So both the domestic and external sources of income show no sign of improvement. Had there been massive investment---both domestic and foreign, economic activities would gain momentum. But the country's political instability and lawlessness do not help the cause.

The rallying cry for a wide-ranging reform also is becoming subdued because of the interim government's lack of dynamic economic governance. In the absence of a bold and radical shift in economic management, even the leading economists who were involved with the task of preparing the white paper on the state of the country's economy expressed their exasperation. They have complained that the government has yet to act on the suggestions they made on a priority basis. Slight improvement in inflation and some stability in the foreign exchange market go to the credit of the governor of the Bangladesh Bank (BB). The central bank's tight monetary policy has made this possible but these are not enough to bring about a turnaround for the economy.

Meanwhile political stakeholders are becoming restive on the question of reform. Different political parties' views are now diametrically opposed to each other. This could be avoided if the interim government did not dilute its concentration to some needlessly controversial issues such as human corridor and leasing out the profitable Chittagong terminal to foreigners. Instead, it would be wise to announce a clear-cut roadmap for election without leaving room for confusion because of a tentative seven-month time gap between December and June.

If some much-needed economic reform agenda were initiated within six or seven months of the interim government's assumption of power, it would have its reflection by this time. Unemployment has already taken its toll and if the economy performs as it does now, more people will become unemployed. Even the better performing readymade garment (RMG) industry amidst the global gloomy manufacturing and business environment will soon lose its steam because of two vital inputs such as gas and power supply. The situation will be more challenging on account of US president's reciprocal tax now vitiating the global commerce and trade. Failure to reform the labour law has already given an edge to competitors of Bangladesh RMG manufacturers in Vietnam and Cambodia. There is no way Bangladesh will be able to take any advantage of diversion of manufacturing units from China. So the prospect of an economic turnaround is hardly bright, if not bleak.​

 

[Saif]

Expatriates' remittance helps Bangladesh make turnaround: Chief Adviser

Recalling the contribution of Bangladeshi expatriates to nation building, Chief Adviser Muhammad Yunus on Friday said the expatriates help Bangladesh make a turnaround from ruins

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Expatriates' remittance helps Bangladesh make turnaround: Chief Adviser
BSSTokyo
Published: 30 May 2025, 22: 42

Chief Adviser Professor Muhammad Yunus spoke at a community reception at the Bangladesh Embassy in Tokyo on 30 May 2025. PID

Recalling the contribution of Bangladeshi expatriates to nation building, Chief Adviser Professor Muhammad Yunus on Friday said the expatriates help Bangladesh make a turnaround from ruins.

"It is the expatriates who help sustain the country (by sending their remittances in hard time)," he said while speaking at a community reception at the Bangladesh Embassy in Tokyo.

Prof Yunus said the ousted government left the state exchequer and banks empty and if the expatriates would not support, Bangladesh would not have turned around.

He said the interim government will, of course, perform the responsibilities bestowed upon it but the participation of the Bangladesh expatriates should be strengthened in nation building.

The Chief Adviser asked them to take initiatives to increase business in Bangladesh.

"As a citizen, you must take the responsibility of the state repair," he said.

The expatriates have relatives and friends in Bangladesh and they have businesses there too and that is why they often visit the country, Prof Yunus said.

"So, overall we have to work together ... you should increase your influence on the Japan government," he said.

On the occasion, three exchange of notes were signed later, respectively on the Development Policy Loan for Economic Reform and Strengthening Climate Change Resilience (418 million USD), the Loan for the Joydebpur-Ishwardi dual-gauge double-lane railway project (641 million USD) and the grant for the human development scholarship (4.2 million USD).

Bangladesh Ambassador to Japan Md Daud Ali and Japanese Ambassador to Bangladesh Shinichi Saida signed the agreements on behalf of the respective sides.

Chief Adviser Prof Yunus witnessed the signing of the exchange of notes.

Later, he joined a dinner hosted in his honour by the Bangladesh Ambassador to Japan.​