The initiative would help reduce the cost of doing business plus boost foreign and domestic investment
Business leaders have sought free trade and warehousing zones (FTWZ) similar to India and Vietnam, in a bid to reduce the time and cost of doing business, plus enhance their global competitiveness in exports and imports.
They pressed home the demand at a dialogue titled "International Trade in Covid Times: Impact and Way Forward for Bangladesh."
The Resurgent Bangladesh, a joint economic recovery initiative by five institutions, organised the event on Saturday through an online Zoom meeting.
The institutions are: the Dhaka Chamber of Commerce and Industry (DCCI), the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), Policy Exchange, the Business Initiative Leading Development (BUILD), and the Chittagong Stock Exchange (CSE).
Tofail Ahmed, chairman of the Parliamentary Standing Committee on Ministry of Commerce, participated in the dialogue as the chief guest.
A FTWZ policy aims to increase the ease of doing business by boosting foreign and domestic investment – especially in the private sector. Business leaders believe that the initiative will make the business environment more robust and help reduce the time and cost of doing business.
India – in the Foreign Trade Policy 2004-05 – announced it would set up FTWZ to create trade-related infrastructure for facilitating import and export of goods and services with the freedom to carry out trade transactions in free currency.
Vietnam also implemented this policy to increase its global trade competitiveness.
FTWZ are deemed foreign territory and function as integrated zones to be used as international trading hubs.
These zones will be fully independent mega-trading hubs integrated with: state-of-the-art warehouses and special storage infrastructure, container freight stations, environmentally-friendly equipment, rail sidings for inter-land connectivity, commercial complexes for offices, independent utility stations, banks, and insurance corporations.
Abul Kasem Khan, president of BUILD, and Syed Nasim Manjur, managing director of Apex Footwear Ltd have emphasised this point.
Addressing the issue, Manjur said, "We need to set up FTWZ to increase export growth in all sectors. It takes too much time and money to export goods. So our cost of production is high, but the price of products has not increased in the same manner.
"We also have to devalue the taka, because India, China, Vietnam, and even Pakistan have devalued their currencies for export growth," he added.
Echoing the opinion, Policy Research Institute's Chairman Dr Zaidi Sattar said, "The government can easily do this. It is important to increase the export growth in the competitive global market."
Abul Kasem Khan, president of BUILD, said in his welcome speech, "We are going through a crisis due to the Covid-19 pandemic, and already a recent report estimates that world trade could decline by $2.7 trillion to $7 trillion due to the pandemic.
"Under the circumstances, Bangladesh's international trade is expected to decline by $9 billion to $21 billion. There is no alternative to increasing Bangladesh's competitiveness in international trade. If we fail to do so, we will fail to take advantage of the Covid-19 shift."
He also proposed declaring the country's warehouse and logistics sector a "thrust sector."
Dhaka Chamber President Shams Mahmud presented the keynote at the webinar. In the main article, he noted, "Several large companies in the world are planning to shift their factories and procurement orders from China, which is a great opportunity for our country.
"We need to take effective steps now to seize such opportunities. Due to the slow pace of unloading of goods from the port, the cost of running businesses is increasing for entrepreneurs. As a result, we are constantly losing capacity in global competition," he continued.
The DCCI president also called for a focus on economic diplomacy and expeditious implementation of free trade agreements, preferential trading areas plus the Trade and Investment Cooperation Forum Agreement to strengthen Bangladesh's position in international trade.
Wahidur Rahman Sharif, president of the Bangladesh Association of Call Center and Outsourcing, said, "Out of around 1,500 companies, only 175 are now active, which is a very worrying scenario for us."
"Most of the domestic companies do not use local IT [information technology] products developed by Bangladeshi firms. That is why most of the local IT companies are now inactive," he continued.
He added that the e-commerce sector will be sustainable only if the transportation and distribution system is further developed.
Humayun Rashid, managing director of Energypac, said, "We have been exporting transformers to India for the last two years, but we are still facing issues with financing due to a lack of government support. The government needs to work on it.
"We need to develop our capital market for long-term financing," he added.
Asif Ibrahim, chairman of Chittagong Stock Exchange, said, "Most banks are keen to lend to the government. It acts as a barrier for the private sector. That is why we need to further develop the capital market."
Meanwhile, Professor Dr Mustafizur Rahman, executive director of Center for Policy Dialogue, commented, "The government needs to change its policy to enhance global competitiveness and reduce business cost and time."
Speaking as the chief guest, Tofail Ahmed said, "The market for Bangladeshi products and exports needs to be diversified, with private sector entrepreneurs coming forward. The [novel] coronavirus has severely hampered international trade, and has had an impact on our economy."
Tofail also called for the introduction of duty-free export facilities for 6,265 Bangladeshi products on the Chinese market, which would generate additional revenue of $2.5 billion.
"We fixed an export target of $60 billion in 2021, but because of the pandemic, it will be difficult for us to achieve this goal," he said.
Dr Masrur Reaz, former senior economist at the World Bank Group and chairman of Policy Exchange, said, "We need to form proper policy to support the export sector amid corona pandemic."
He said that ship building sector was very promising for export.
"In 2008 when the world was in economic slow down, we suggested the government to form proper policy for supporting this sector. But government did not do that. In 2020, we see this sector could not stand in export," he added.