Investments risky without consistent policy, reliable data
Doing business is difficult if there is no consistency in policies and credibility of data. We become hopeful when we get data related to the economy from the Bangladesh Bureau of Statistics, but it does not match with reality when we start working at field level.
We make investments based on data on our population, GDP, per capita income and other things, but our sales do not match our estimation. Entrepreneurs cannot make a plan without proper data and utilise our capacity.
We calculate all the costs when we invest, but it becomes very difficult to progress if the cost of fuel increases up to 300%.
As far as I know, $2 billion has been invested in the textile industry in the last two years. All of this is now at serious risk as energy costs rise at an unpredictable rate.
Our demand for electricity is around 11,000 MW, but we generate 24,000 MW, and there is a possibility that it will reach 32,000 MW. In case of gas, there is a demand of 3,500 mmcf/d (million cubic feet per day), while 2,600 mmcf/d is produced. The rest of the demand is met with imported LNG, but the price of gas is not supposed to exceed Tk20 per unit. We do not understand how it crossed Tk30.
We have witnessed a sharp decrease in the price of LNG. It once reached $70, but currently, it is $22. It can drop as low as $10.
I see a bright future for our economy, but a level playing field is very important in the regulatory policies. The policies should not nurture evil and suppress the good.
Supplementary duty and VAT were levied at the rate of 15% on locally produced tiles, but it eventually became 32%, which is not much different compared to the imported tiles. No incentives were given to the local industry.
Besides, the National Board of Revenue is not properly enforcing the rules in this regard. There is a tendency to collect more revenue from the industries that comply with the regulations without stopping the companies that violate laws.
SK Bashir Uddin, managing director of Akij Group
