The government is likely to announce early next month a bailout package for the business sectors suffering from the impact of global recession, reports UNB.
"May be we''ll be able to announce the package in the beginning of April," Finance Minister AMA Muhith told a seminar in Dhaka on Monday.
He also disclosed that the government on Monday formed a high-powered taskforce to face the challenges of the fallout from global recession. The taskforce, headed by the Finance Minister, will hold its first meeting on March 24.
Muhith did not elaborate the detailed structure of the taskforce, but said it would be of 28-29 members with representation from political parties, including opposition BNP, and different sectors concerned.
"We know many of the export sectors have already been affected though many others not yet," he said, stressing the need for making sure that the incentives irrespective of the amount should be in place timely.
Bangladesh Institute of Development Studies (BIDS) with support from Manusher Jonno Foundation organized the seminar titled "Global Financial Crisis and Impact on Bangladesh" at the
BIDS conference hall.
Economists, researchers and experts taking part in the discussion, expressed concern over the impact of the global recession and recommended incentives without any delay for the export sectors and wage earners who are coming back to home.
The Finance Minister also apprehended "serious problem" at least for
the next two fiscal years (2009-2011), if not during the current
fiscal year. "We should not be complacent and should be prepared for
some of the impact," he said
Muhith said the government has given highest priority to agriculture and infrastructure including energy and power sector, which simultaneously in facing the recession challenges offer two major problems to the government - raising public expenditure and attracting foreign direct investment.
"We''re in a tight situation for next two years," said the Minister, expressing his concern outright for the first time after the recession started hitting the economy. "I''m really anxious about how to move in this regard."
Replying to a question after the seminar, Muhith told reporters that the government would have to go for detailed analysis of the FBCCI demand for around Tk 6,000 crore in incentives.
Contacted over phone, FBCCI president Annisul Huq told UNB that they placed on Sunday demands for Tk 3,500 crore for apparel sector, Tk 1200 crore for spinning sub-sector and Tk 1300 crore for other sectors.
In response to the need for reduced interest rate on bank loans, the Finance Minister told the seminar that the problems of commercial banks should also be considered at the same time.
Association of Bankers Bangladesh (ABB) president K. Mahmud Sattar in his presentation argued that the commercial banks were now running after mobilizing deposits with high deposit rates due to dearth of fund inflow at present.
He said the import credits the banks had provided during the high prices of imported commodities in the international market are now stuck up with the importers due to sharp fall in prices of the commodities in the domestic market. The importers are now seeking a respite for three years to repay their loans, Sattar added.
Instead of talking about reducing the lending rates, the experienced banker rather indicated a possibility of raising the lending rates as a result of deposits at higher cost.
Addressing the seminar, Centre for Policy Dialogue (CPD) executive director Prof Mustafizur Rahman painted a gloomy picture of the country''s export sector, showing a volatile trend for last few months and a negative outlook.
He expressed concern over the likely happenings in the near future and recommended incentives for the export sectors.
The CPD executive director also expressed
concern that some one million workers, who are likely to be sent back from abroad, would be added to the domestic labour market.
He recommended an incentive package of temporary nature as the budget does have a fiscal space to provide the incentives, saying that the ADP implementation is likely to be lower thus further widening the fiscal space. It will, however, increase fiscal deficit.
Mustafiz also recommended creating a special credit window for the SMEs and export sectors.
In a keynote paper, lead economist KAS Murshid of BIDS pointed out that the incentive package is unlikely to be a bail out and recommended seizing whatever opportunity the recession has created.
To seize the opportunity, he suggested adopting a moderately expansionary monetary and credit stance, reducing cost of credit to facilitate investment and capacity expansion.
Murshid also suggested continued efforts to attract remittance through formal channels and focus more on skilled manpower exports.
Subject: Recession task force formed 
Mon Mar 16, 2009 11:20 pm
