Bangladesh recorded one of the fastest growth rates in the world in the past few years with a stable economic performance that has helped to reduce poverty and social inequalities, said ICC Bangladesh President Mahbubur Rahman. Mahbubur said this while addressing the executive board at the 25th Annual Council of ICC Bangladesh held virtually on Monday.
Quoting ILO Report, Mahbubur said that Bangladesh is now battling both the pandemic and its economic fallout. “In such a situation, economic risks are not only limited to short-term, but also extended to major future productivity losses both through labour and capital.”
The economic crisis is likely to trigger a series of corporate and household debt defaults turning into a financial crisis as well, mentioned the ICC Bangladesh Report. Like most other emerging economies, Bangladesh has to tackle a number of key issues in order to achieve the desired GDP growth, which includes healthcare, sustainable export, FDI and remittance flow. In Bangladesh there are around 7.8 million enterprises and 90 percent of them are micro (including cottage) enterprises.
This sector contributes around 25 percent to the GDP, amounting to around $79 billion. “The high cost of doing business affecting the SMEs. Besides, many SMEs have been suffering tremendous setbacks in terms of production, marketing and sales. The SME sector generates 30 per cent of the total employment in the country as well,” said the ICCB President. He mentioned that Bangladesh’s graduation from the LDC status by 2024 will lead to the loss of trade preference in major export destinations and loss of other preferences. “So, Bangladesh must focus on FTAs with major trading countries.”
The Executive Board Report also said the second wave of COVID-19 has already started in Europe and US which will further prolong the economic downturn. Like most other emerging economies, Bangladesh will also be affected and will have to tackle a number of key issues in order to achieve the desired GDP growth, which include healthcare, sustainable export, saving MSMEs, sending back stranded expatriate workers to their workplace to maintain the remittance inflow and attracting more FDIs.
Besides, in order to maintain sustainable growth and to keep the supply chain functional and cost effective, it is very much important to save MSMEs (micro, small and medium enterprises). The G20, along with the WHO, IMF, World Bank Group, United Nations and other international organizations, are mobilized to take active steps to overcome the pandemic, and the International Chamber of Commerce (ICC) is collaborating as a trusted business advisor with many of these engaged stakeholders.
The Report mentioned that as part of this campaign, ICC Headquarter has released a call to action encouraging governments to ensure that stimulus efforts flow rapidly into the real economy and provide direct and immediate support to MSMEs and their workers to ensure their continued operation.
Given the cross-border nature of supply chains, such stimulus and safeguard measures should be taken in a coordinated manner at both the national and international levels. Countries around the world are implementing economic and fiscal policy stimuli, including emergency tax measures to support their economies under the COVID-19 pandemic.
In this respect, ICC has highlighted a number of key tax measures that the governments can take to “Save Our SMEs” and relieve cash flow stress during the crisis period. The Council approved the Auditor’s Report of 2019 and appointed Auditor for the year 2020. Prominent business leaders attended the ICCB Annual Council.
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