The Metropolitan Chamber of Commerce and Industry (MCCI) on Saturday said that trading with India with the help of a currency swap via the Rupee instead of the US dollar was not easy as it was not in the IMF currency basket.
Currently, the IMF basket consists of five trading currencies — the US dollar, the Euro, the Chinese Renminbi or RMB, the Japanese Yen, and the British Pound sterling.
President of MCCI Md Saiful Islam however said there was a need for government-to-government discussion and then between the central banks to make it happen.
Exchanging views at a luncheon meeting at the chamber headquarters with the city’s media outlets, the organization felt that trading with India through rupee and China through RMB will give the reserves comfort as both the counties are large trading partners of Bangladesh.
It had first proposed the idea to the governor of Bangladesh Bank. China usually is the biggest trade partner followed by India.
The MCCI noted that the control of imports might affect the overall trade, as some importers are facing troubles even while importing capital machinery. The MCCI also noted that Bangladesh was likely to lose between 8% and 13% of trade advantage after 2026 when Bangladesh will no longer enjoy trade benefits as a least- developed country.
But it opined that there are many opportunities that will be there after graduation. “Our country rating will be enhanced and image, among others, will be broadened after the graduation,” Md Saiful Islam said about the dividend that the country may reap following the change of status.
The business leader also felt that Bangladesh could compensate for at least 5% of the erosion in export earnings by improving its efficiency in the manufacturing sector.
Erosion in export earnings can also be compensated if there is no political instability and social unrest or overall peace and stability prevail.
The chamber suggested that many regulators now need outsourced inspectors to provide efficient services to businesses, indicating that there has been lacking in rearing necessary managerial manpower, thus necessitating the hiring of foreigners for many industries, specially the export sectors like apparel.
“We have to wait for many months, even years, for inspectors as the regulatory bodies lack the inspectors.”
He says the bodies can outsource the inspectors and it will improve the ease of doing business. The MCCI points out that lead time in export shipment is rising and needs to be improved. A 17% improvement in logistics will help improve 7% of the economy. Islam mentioned that they have been working with the revenue board for widening the tax net. “We are in favour of lowering the tax rate and widening the tax net.” He said MCCI achieved success in framing a uniform 12% tax for all export-oriented industries.
Earlier, RMG only used to enjoy it.
The metropolitan chamber urged the authorities concerned to extend the tenure of trade and other licences to at least five years from the existing one year in order to reduce the cost of doing business and eliminate hassles.
