Industries outside Dhaka, especially cottage, micro, small and medium enterprises (CMSMEs), are suffering the most from load-shedding due to the lower capacity of the Rural Electrification Board (REB), said the chief of the country’s apex trade body.
The REB is responsible for supplying electricity to rural areas, where most industries are located, but the state-owned company receives a lower allocation of energy than other power companies.
As a result, various industries are not getting an adequate power supply, said Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
“CMSMEs are the worst-sufferers as many cannot operate properly now,” he said at a dialogue organised by the Economic Reporters’ Forum at its office.
Jashim suggested adopting coal-fired power plants to meet the energy demand. Some developed countries are even now going in this direction despite the environmental risks.
Moreover, CMSMEs do not have easy access to finance as banks fear they may not be able to recover funds from small-scale businesses even though they generate 80 per cent of employment in the informal sector.
He urged banks to lend to CMSMEs by signing agreements with a third-party guarantor so that those industrial units can run properly in the time of crisis.
Due to the lack of bank finance, CMSMEs borrow from non-government organisations at high-interest rates and under stringent conditions, for which they are losing their competitiveness.
The FBCCI chief also sought soft loans from banks for promising agro-processing industries as the country needs to diversify its exports.
Jashim said Bangladesh’s exports will suffer a lot if Europe goes into a long recession due to the current economic volatility.
However, having a diversified export basket could help offset the negative export growth, he added.
He then said if the government wants to make Bangladesh a developed nation by 2041, it needs to significantly reform the National Board of Revenue so that revenue generation does not become a major challenge.
Recognizing the high prices of some basic commodities, the FBCCI chief blamed the recent hikes on price volatility in international markets and abnormal freight charges.
He also acknowledged that prices of some commodities are unreasonably high in retail markets compared to wholesale markets because of the profit-mongering mentality of a section of traders.
Bangladesh should also improve its negotiation skills to avail loans from the International Monetary Fund as the global lending agency is attaching many tough conditions to the credit support, Jashim added.