Businesses in the country have not seen stability for a long period. Setting up new industries has become even more challenging due to rising loan interest rates, liquidity shortages in banks, high dollar prices, and disruptions in the consistent supply of gas and electricity.
Moreover, load shedding has made it difficult to operate capital machinery at full capacity. And, the inflated price of industrial gas raised concerns over whether our local industries can maintain competitiveness with other countries.
Thousands of workers already lost their jobs as several factories shut down in different areas. Political uncertainty further damaged business owners’ confidence. In this circumstance, sustaining existing businesses has become difficult, along with setting up new ones.
Businesspeople underlined the dual crises that are hindering new investments: inconsistent supply of gas and electricity. Despite rising gas prices, there is little consistency in supply. This has brought gas-dependent industries in limbo. Starting new industrial ventures has also become difficult.
Meanwhile, the government decided to set the gas price at Tk 30 per cubic meter and raise the gas price for captive power (self-generated industrial electricity) from Tk 30.75 to Tk 75.72 per cubic meter. This will further deepen the crisis in gas-dependent industries if implemented.
Additionally, increased gas prices will raise production costs, which will cause product prices to soar.
Moreover, bank interest rates surged from 9 per cent to 14 per cent. The cost of opening Letters of Credit (LCs) continues to rise as the value of the taka depreciates against the dollar. Furthermore, VAT hikes on various goods and services prevented stability in the business sector.
Mohammad Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and additional managing director of Denim Expert Ltd, stated that the economic situation was poor, but there is now an opportunity for recovery, along with some challenges.
Rubel pointed out that businesses are closely tied to law and order, adding another layer of difficulty.
He further noted that foreign direct investment (FDI) has declined recently, which slowed down the overall pace of business. Businesspeople remain uncertain about the future.
"People expected the government to bridge past economic gaps. The current government can make independent decisions, unlike political parties. We expect them to establish long-term business policies," Rubel added.
The Xclusive Can Limited in Tongi, Gazipur, manufactures paint cans, ice cream boxes, and medicine bottles. Its managing director, Syed Nasir, described the dire scenario in businesses by pointing out five major challenges.
"The situation is extremely bad. We are facing five significant challenges. The government cannot guarantee uninterrupted electricity supply in summer. Gas prices are set to rise further, making us less competitive in the global market. Those of us who generate electricity using captive gas generators will face higher operational costs. The uncertainty surrounding gas and electricity puts our entire investment at risk," he said.
He also stressed that 90 per cent of business owners rely on bank loans. Bangladesh Bank raised the interest rates, with an indication to raise them further. “If that happens, businesses will become inoperable,” he remarked.
Another major challenge is the policy of the National Board of Revenue (NBR). "When goods arrive through Chattogram Port, their import value is not considered as asset value. High taxes are imposed on imported goods, even though their prices can be verified online," he added.
