Is the country’s housing sector receiving the attention it deserves from the government? How challenged is it amid the ongoing economic crisis? What will happen to the employment of 30 million people if the sector’s slump continues? Mostafa Kamal Mohiuddin, Director of Bangladesh Development Group (BDG), discussed these and other related issues in an interview with the Bangla daily Kaler Kantho.
Question: What kind of crisis do you see in the housing sector at present?
Mostafa Kamal Mohiuddin: The housing sector is currently going through a critical phase. This situation has arisen in the context of Bangladesh due to various reasons, especially the lack of clarity in laws and regulations.
For example, RAJUK’s Detailed Area Plan (DAP) still lacks transparency in its formulation. There have been many demands and movements regarding this. Many people have yet to accept several aspects of the DAP. There is also disagreement among housing sector entrepreneurs, professionals, architects, and planners.
So, bureaucratic complications, lack of transparency in law and policy formulation, the political landscape of the country, and the global economy are all contributing to pressure on the housing sector. As a result, nearly 3,000 companies involved in the sector are suffering in one way or another.
Question: You mentioned 3,000 companies are involved. Who else is connected to this sector?
Mostafa Kamal Mohiuddin: The sector contributes significantly to the national economy—around 20% of the GDP comes from this sector. It generates approximately Tk30,000 crore in revenue. It employs nearly 30 million people, and the total investment in the sector exceeds Tk200,000 crore.
If you consider all these factors, the importance of the housing sector becomes evident. Moreover, around 258 sub-sectors are directly linked to this industry, involving nearly 12,000 industrial projects. Naturally, this sector is vital for people's livelihoods and the national economy.
Question: How long do you think the crisis will last?
Mostafa Kamal Mohiuddin: It’s hard to say whether the crisis will be short or prolonged. Globally, there is widespread instability, and it’s not likely to end soon. In this context, the government's role is crucial.
If the government fails to formulate proper policies or take adequate measures to revive the sector and offer necessary support, the crisis will have long-term consequences. It will not only affect the housing sector but also harm the overall economy of the country.
Question: What kind of steps can the government take?
Mostafa Kamal Mohiuddin: We've seen in countries like Singapore that whenever there’s an economic downturn, governments invest in the housing sector to revive it. They also provide facilities to buy flats and plots and ensure long-term loans from banks under easy terms, payable in extended instalments.
We don’t see this happening in our country. Housing loans here are extremely limited. The few that exist come with high interest rates. Those who have taken loans are struggling to repay them. There's an issue of repayment periods, cash flow, and overall economic context. These factors are disrupting the system, making bank loans inaccessible.
Question: Are you seeing any initiatives from the government to address the crisis?
Mostafa Kamal Mohiuddin: As far as I know, there have been no specific initiatives from the government. No concrete policy or plan has been adopted to address the situation. Unfortunately, the government has taken no steps regarding the housing sector. The sector is now almost floating. Its economic aspects, the problems of entrepreneurs—none are being considered. There is no thought being given to providing facilities to buyers either. Overall, the sector seems abandoned.
Question: How much impact is the rising cost of construction materials having?
Mostafa Kamal Mohiuddin: If we look at the reasons behind rising prices, we’ll find that three or four major sub-sectors closely tied to housing—rod, cement, stone, brick, and sand—are affected. Factories are unable to operate continuously, so production is disrupted. There is a shortage of gas, fuel, and raw materials. The banking system is in disarray.
Banks are unwilling to open LCs; they are demanding 100% to 200% margins. Even after fulfilling this condition, many banks still refuse to open LCs. This has disrupted the supply chain severely. Consequently, prices have gone up, adversely affecting the housing sector and causing great hardship for entrepreneurs.
Question: How do you think the price hike has affected buyers’ purchasing power?
Mostafa Kamal Mohiuddin: Rising prices significantly impact purchasing power. In Bangladesh, those involved in housing mainly target the middle and upper-middle classes. The upper class is very limited in number. Due to income constraints among the middle class and the overall unfavourable national situation, they lack the confidence to buy and are avoiding investment.
Question: What factors determine the revival of the housing sector?
Mostafa Kamal Mohiuddin: The interim government is currently focusing on a few specific areas like elections, reforms, and justice. But economic priorities are missing from this list—they are not even ranked fourth or fifth in importance.
As a result, the housing sector is in bad shape. If the economy is not prioritised, if those working on it are not respected, and if businesses are not protected, then the situation cannot be resolved—nor is it being resolved.
Question: Then what should be done to resolve the crisis?
Mostafa Kamal Mohiuddin: There needs to be discipline in local governance—whether it comes through a political or interim government. A government elected by the people will reflect public demands, hopes, and aspirations.
The current government has very capable individuals. If they start prioritising the economy, the crisis could be solved swiftly.
Question: In this situation, what is the condition of entrepreneurs in the housing sector?
Mostafa Kamal Mohiuddin: We see that people who have never run a business or employed even a single person are going on talk shows saying that loan defaulters should be thrown in jail. But imprisonment is not the solution.
Due to the inability to produce, there’s no cash flow. Loans can’t be repaid. The situation has become so bad that entrepreneurs are having to sacrifice everything just to save their lives, honour, and social standing. If the government does not act now, any kind of disaster could occur.
Question: What kind of crisis might arise if urgent action is not taken?
Mostafa Kamal Mohiuddin: If the business community, especially the housing sector, is not given special attention, the long-term effects will be devastating. There will be no way back. Millions will become unemployed, manufacturing industries will collapse, and both local and foreign investment will vanish. The sector’s contribution to GDP will disappear. In short, the economy will face a dire situation.
Bd-pratidin English/ ANI
