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CONTENTS 04
From the Editor
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Opening Remarks Good days are ahead
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BGCCI Events BGCCI activities in the last quarter
As a part of BGCCI’s Branding Bangladesh campaign, the chamber wants to promote Bangladesh to the wider public at home and abroad with a powerful visual tool, a photobook illustrating successful business stories of Bangladesh. If you would like to recommend an entrepreneur, businessman or innovator, send us an email at 100leaders@bgcci.com
Emerging Bangladesh Volume 2 Issue 1 Jan./ Mar. 2014 The business magazine of the Bangladesh German Chamber of Commerce & Industry Emerging Bangladesh will be published four times p.a. by the Bangladesh German Chamber of Commerce & Industry Publisher Sakhawat Abu Khair on behalf of Bangladesh German Chamber of Commerce & Industry It is distributed free of charge to members and qualified nonmembers in Bangladesh and abroad.
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Person of Interest Interview of Promita Sengupta, Program Coodinator, Rule of Law project, GIZ
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BGCCI Memberships in 2013
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Special Interview Lorenz Berzau, Managing Director, BSCI
Bangladesh German Chamber of Commerce & Industry German
Features & Advertisement Tawhidur Rashid
House, 1st Floor, House: 10/C, Road 90, Gulshan 2, Dhaka-1212, Bangladesh Tel +88 02 8826480, Fax +88 02
Photography Din Muhammad Shibly Design & Layout
8824858 info@bgcci.com, www.bgcci.com, www.eurochamber.bangladesh.com,
Linework Cover Design Mango Communications
*All opinions expressed in articles do not necessarily reflect the views of BGCCI
Printed at Binimoy Printers Ltd.
22 Cover Focus
On its 10 years anniversary, BGCCI extends deep gratitude to its Founder, Presidents, Executive Directors and
Global Sourcing Trends & Bangladesh Dr. Achim Berg from McKinsey & Company pens the trends about Global sourcing
Executive Board Members. Founder: Sayed Jamaluddin Haider Presidents: Sayed Jamaluddin Haider Dr. Peter E. Albrich (2001-2004) Ruhul Amin (2004-2006) Nasir A. Chowdhury (2006-2007) Md. Saiful Islam (2007-2011) Sakhawat Abu Khair (2012-Till Date) Executive Directors: Irmgard Hettich Sherchan (2007) Mr. Syed Feroze Ahmed (2008) Mir Muniruzzaman (2009) Dipl. Oec. Daniel Seidl (2009-Till Date) BGCCI Executive Committee 2012-2013 President Sakhawat Abu Khair Senior Vice President David Hasanat
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Trade Fairs
Treasurer Olaf Handloegten Executive Board Members
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#EconoConversation
Bernd Hagen Sakhawat Hossain Shakhawat Hossain
Dr. Mustafa K Mujeri Director General BIDS Faruque Hasaan Managing Director, Giant Group Rubel Aziz Managing Director, Partex Group
Yesmin Ipphat Amrita Islam Omar Sadat Farooq Siddiqui Executive Director Dipl. Oec. Daniel Seidl Chief Advisor Saiful Islam
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FROM THE EDITOR
What is the ‘Bangladesh Effect'? Dear BGCCI Members & Readers, Nowadays people ask the question: will Bangladesh be also in the future the second big manufacturing hub for Readymade Garments (RMG) of the world? The answer is very simple. Yes, because now, there are no alternatives. The second question is how does Bangladesh position itself in the future? Is it going to be a manufacturing hub for simple products and mass production or climbing up the value chain to manufacture high-end products? We also tried to answer the question-who will be the sourcing countries for Bangladesh in future? Will it be the Europe? The US? Or will countries like China and India use Bangladesh to supply goods for their own local demand? As an Editor, I would like to emphasize that Bangladesh is not only dependent in the future on the RMG sector. Many other sectors will come up but a couple of years ago; it was only the price of garments that mattered most. Today, more and more we talk about i) compliance ii) quality iii) timely delivery and iv) the price. Enjoy reading our magazine in this regard.
Daniel Seidl Executive Director, BGCCI
OPENING REMARKS
Good days are ahead
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By Sakhawat Abu Khair President, BGCCI
“Not Knowing when the dawn will come, I Open every door”, wrote Emily Dickinson. Though I myself is not a big fan of poetry, this particular line seems close to my heart. The line somehow portrays the condition of Bangladesh in an interesting way. Last year was a tough call. Every single sector, be it business or development was under the attack of political violence and long period of uncertainty. Outside the country, the gory pictures of our burn victims or dead pedestrians were raising huge concern about the forthcoming future; inside, we were afraid, frustrated, shattered. The yearlong political debacle almost brought many businesses on their knees. 2014, however, has brought a breath of fresh air. So far, the situation is stable, businesses are getting back their usual strength, and opportunities have started sprouting forth. We at German Chamber believe, this is the right moment to look beyond what the ordinaries and identify and unlock the potentials of tomorrow for a brighter future. And by opportunities, we mean any kind of opportunities, be it trade or aid. As Milton Berle, an American writer said, “If opportunities don't knock, build a door.” At BGCCI, we own that much positivism! We would like to spread it among our friends. The Chamber saw a good start in 2014. We signed the much-coveted MoU with the Association of German Chamber of Networks. According to this, a new chapter is opened in the bilateral trade relationship between Bangladesh and Germany. Both the parties have agreed to share expertise, ideas and take the trade relationship to a new height. It was only possible because of their high regard about the Chamber's achievement. Thanks to all our 550+ member companies, both gold and ordinary, for their support, advice and cooperation. Last year, as you can see, the chamber grew from strength to strength. Not only in the number of membership, but also in quality of services and in playing visionary roles. Through our business networking events, repeatedly we have tried to promote the cause of Bangladesh. We have encouraged our members to make more profits with healthy and time appropriate business practices; at the same time, we have looked into important issues like skill development and ensuring safety and compliance. Both of which, as I believe, will take Bangladesh's readymade garments sector to a new direction. Our this issue's cover story is on Global Outsourcing Trends and Bangladesh's position. I would like to extend a special thanks to Achim Berg from McKinsey & Co. for drafting this important piece for us. I believe the readers will see the whole issue from a brand new perspective and can strategize their businesses accordingly. Our another special report, called #EconoConversation is also very interesting. We have talked with diplomats, business magnets, policy makers to find out whether Bangladesh can truly turn around in days to come and make the best use of the most-sought after “good days”. Last but not least: an array of interview of women entrepreneurs and managers who are sitting on pivotal positions of national and international businesses. We are thankful to them for their valuable opinion on entrepreneurship, empowerment and ideas. BGCCI is proud of all of them! I hope working with them; we can work more closely in future to encourage more entrepreneurship among women for a stronger and more resilient economy. {Emerging Bangladesh} Jan. - Mar. 2014
BGCCI organized special dinner for German Blue Chip Companies T
o share information about future business prospects and strengthen its tie with the German Blue Chip companies, BGCCI organized a grand dinner at Villa Ideas. The event was attended by German Ambassador, H.E Dr. Albrecht Conze; Deputy Ambassador Dr. Ferdinand von Weyhe; BGCCI President Sakhawat Abu Khair; Chief Advisor Md. Saiful Islam, BGCCI Executive Board members and top brass from more than ten German Blue Chip companies operating in Bangladesh. In the event, Dr. Conze elaborated the
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importance of seeking new opportunities of investment in Bangladesh. He, in this regard, expressed his desire to work closely with Board of Investment (BOI) of Bangladesh. He said, new sectors would hold much more potential for Bangladesh and the investing country, provided there is a stable condition. BGCCI President Sakhawat Abu Khair thanked all the distinguished guests for their presence. He sought for suggestions from the company representatives to make BGCCI more active and dynamic. From the blue chip {Emerging Bangladesh} Jan. - Mar. 2014
companies, N Janakiram Raju, CEO & Managing Director of BASF Bangladesh and Ajay Sahney, Managing Director of Robert Bosch Bangladesh Ltd. spoke before the distinguished guests. Both of them praised the chamber for all its initiatives so far and stated that they would be ready to extend all sorts of cooperation for the betterment of Bangladesh as well as BGCCI.
FEATURE
BGCCI celebrated 500th member's induction program with Oktoberfest 2013
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Bangladesh Ger man Chamber of Commerce & Industry achieved another milestone in the history of its 10 years journey as a bilateral business chamber. With a mega event, the Chamber celebrated its 500th Member's induction at a five star hotel in Dhaka. Radiant Pharmaceuticals Ltd. was inducted as the prestigious 500th Member. With this remarkable feat, the Chamber once again cemented its position in the realm of bilateral trade as the biggest and most active chamber in the country. BGCCI Members, various industry stalwarts, foreign diplomats and friends from print and electronic media,
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attended the gala event. BGCCI President Sakhawat Abu Khair in his speech extended his thanks to the current Executive Board and BGCCI Secretariat for their relentless support. He also mentioned about various success obtained by the chamber in last two years. Nasser Shahrear Zahedee, Chairman of Radiant Pharmaceuticals Ltd. expressed his gratitude for being inducted as a the honorable 500th Member through the event. In his speech, he gave a brief about how his company is aiming to offer better services in the international market by sharing expertise and resources from a chamber like BGCCI. {Emerging Bangladesh} Jan. - Mar. 2014
The event also witnessed certificate-giving ceremony of some of the recent members. The second half of the event witnessed traditional Oktoberfest, which amused the audience. The traditional German games like log cutting, finger wrestling, etc. were highly entertaining. Daniel Seidl, Executive Director of BGCCI thanked everyone for being with the chamber through thick, thin, and welcome to further bolster the trade and cultural relationship between Bangladesh and Germany.
Overleaf: Md. Nasser Shahrear Zahedee (at the center) Chairman, Radiant Pharmaceuticals Ltd. Receiving 500th Member's Certificate & Crest. Also on the stage, clock wise from the left, Daniel Seidl, Executive Director, BGCCI; Farooq Siddiqui, Executive Board Member,BGCCI; Saiful Islam, Cheif Advisor, BGCCI; and Sakhawat Abu Khair, President, BGCCI. This page: impressions of various festivities of the event
{Emerging Bangladesh} bgcci.com
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BGCCI signed MoU with the Association of German Chambers of Commerce & Industry (DIHK) The Association of German Chambers of Commerce & Industry (DIHK) and BGCCI signed a Memorandum of Understanding with an aim to fostering their successful, long standing cooperation. DIHK came with a delegation team to evaluate BGCCI. DIHK was extremely happy with the progress of the chamber. BGCCI President Sakhawat Abu Khair and Dr. Volker Treier on behalf of DIHK signed the MoU. The letter acknowledged the positive development to support the Bilateral trade relation BGCCI has
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accomplished. According to the MoU, the parties will actively support each other to encourage business partnership between Bangladesh and German enterprises and organize trade mission for the business community of both countries. The DIHK will render all reasonable support to BGCCI's commitment to be accredited as a German Bilateral Chamber of Commerce & Industry. In the course of offering all reasonable assistance in respect of visiting trade missions, both parties will supply relevant market information, conduct {Emerging Bangladesh} bgcci.com
business match-making and facilitate the introduction of visiting trade missions to representatives of relevant industries. The MoU also states that DIHK and BGCCI will cooperate to identify sectors in Bangladesh economy where Education and training of skilled employees can be enhanced for the benefit of companies from both the countries.
Kilpatrick Bangladesh Ltd. Organized a special dinner for BGCCI Gold Members
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nternational Head Hunting organization Kilpatrick recently has opened their office in Bangladesh. Established in 1997 and experiencing steady growth, it now stands to be one of the most important players in the European market with offices in Italy, Netherlands, the United Kingdom, Romania and Poland to search for the best senior executives, managers and specialists.
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To harness the true potential of the qualified human resources Bangladesh has, Kilpatrick is looking to expand its business here. A BGCCI Gold Member, the organization arranged a special dinner for all BGCCI Gold Members. Representatives from more than 30 Gold member companies participated in the dinner. Jacob Hoekstra, Group CEO and Board Member of Kilpatrick, thanked the guests for {Emerging Bangladesh} Jan. - Mar. 2014
attending the dinner. He represented the company vision in brief before the audience. Abdullah Al Maher, Country manager of Kilpatrick’s Bangladesh chapter was also at the event. The members enjoyed the lighthearted chitchat with exquisite gourmet food.
BGCCI organized Business Networking Luncheon with Commerce Minister Tofail Ahmed, MP
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D
th
Dhaka, 4 March, 2014: Bangladesh German Chamber of Commerce & Industry (BGCCI), the biggest and most active bilateral business chamber of the country organized a business networking th lunch on 4 of March, 2014 at a five star hotel in Dhaka. Honorable Commerce Minister, Mr. Tofail Ahmed, MP, graced the event as Chief Guest and speaker. Dr. Ferdinand von Weyhe, Charge d'
{Emerging Bangladesh} Jan. - Mar. 2014
Affaires of German Embassy in Bangladesh was also present at the event. In the event, Tofail Ahmed elaborated the success of the Government in promoting bilateral trade and development issues. He also mentioned about the plans to bolster the trade relationships between Bangladesh, Germany and Europe. He praised BGCCI for its noteworthy role in the sector of trade promotion as well as social responsibility roles. Dr. Ferdinand, in his speech thanked BGCCI for organizing wonderful events which brings business community and policy makers together. He mentioned about Germany's interest in increasing trade volume with Bangladesh in days to come. BGCCI President Sakhawat Abu Khair also gave a speech in the
event. He said, the chamber has always been working to ensure Bangladesh's firm footing in Germany in various sectors. Over the years the as trade volume has been increasing, the business sector should also care about social and environmental commitments, he mentioned. He thanked all BGCCI members and BGCCI Secretariat for the achievements the chamber has made so far. BGMEA President Md. Atiqul Islam was present at the event. He updated the audience about the recent initiatives taken by the apex body of garments manufacturers. Daniel Seidl, the Executive Director of BGCCI said that over the years the European Union has emerged as Bangladesh's core market receiving over half of Bangladeshi exports. In his presentation, he also showed that
{Emerging Bangladesh} bgcci.com
Germany is Bangladesh's 2nd biggest export market and is closing the gap to the USA and could become number one is the next few years. Claiming BGCCI as a trendsetter, Mr. Seidl said, with McKinsey & Co.'s RMG report the chamber started to uphold Bangladesh's positive image in the world as lucrative RMG destination. After that, with Global Social Responsibility Conference, the chamber wanted to make businesses aware of the social commitments they have. Mr. Seidl also mentioned about the rising trend of 'Trade & Aid'. He said, in future the chamber will successfully facilitate the issues pertaining to business and development sector. The event was followed by lunch.
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PERSON OF INTEREST
BACK to Life BACK to Reality Promita Sengupta Program Co-ordinator of Rule of Law, GIZ Interviewed by Ana Koenen
{Emerging Bangladesh} bgcci.com
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Q. Ms Sengupta, the programme you are leading at GIZ just has been extended until 2018. What are the plans for the further development of the programme? Before we received generous support from DFID and the existing program supported by the Federal Ministry of Economic Cooperation and Development (BMZ) was extended, we already started to put more thought into how to support vulnerable prisoners not only to get out of their lengthy pretrial detention,but also how to help them improve their lives during their time in prison and afterwards. Therefore we asked ourselves a seemingly simple question: Who is the prisoner? What didher/ his life look like before and after the imprisonment? The answer to this is that the average prisoner we are dealing with is male, poor and between 20 and 60 years old. He is mostly in prison for petty crimes, drugs, land disputes, immigration issues etc. In the worst case he is illiterate and unskilled. The most decisive factor for the prisoner's future derives from Bangladeshi culture the principle of shame and honor. A poor prisoner being male or female who comes back to his village or family after an imprisonment is given a very hard time re-entering into his community: she/ he is stigmatized. The stigma in addition to being poor and unskilled in most cases leads to reoffending again. GIZhas developed a component on how to make their reintegration into society possible.
What does this component look like? We call this component Skills Development. By teaching a prisoner a skill she/ he can use outside, they will have something in their hands, which will restoretheir reputation and dignity. She/ hecan contribute to the community again and thus become a part of the community again. 20
And in this new component you see a potential for the private sector? This stigma and exclusion from the society results in:isolation and re-entering the justice system throughre-offending and then imprisonment. We would like the private sector on board here. For instance some prisons have the facility for tailoring courses, which we are already supporting. If we can get garment companies on board, they could provide, for instance, new machines and training, so they would have a pool of skilled workers emerging. By this we both help the prisoner and contribute to Bangladesh society. Let me do some quick math at this point: At the moment our programmehas released 3085 prisoners. 3085 skilled people are a potential resource. By the end of our programmein 2018 we are targeting17.750 people being released. If we could make 10% of them skilled workers the impact would be significant.
The most decisive factor for the prisoner's future derives from Bangladeshi culture the principle of shame and honor.
{Emerging Bangladesh} Jan. - Mar. 2014
I understand that a skilled ex prisoner has potential for Bangladesh's economy and also will be able to overcome the stigma within his community a win-win situation for both sides.What skills are we talking about then? As I said, using this potential can preventreoffending, asshe/ he is unable to find an occupation overcoming stigma and shame.We believe in synergies. Why re-inventing the wheel when it already exists? At this point the private sector comes in. We would like to teach skills the BD industry needs in order to ensure sustainability. For instance, we could prepare them for the textile sector in Dhaka. At the moment we are also offering basic electrics courses: repairing TVs, fridges, ACs etc. For women we are organizing a beautician's course, as there is a huge demand in Bangladesh.But we are also offering computer skills courses and weaving of furniture. For the more rural areas we would like to offer First Aid Courses a skill hardly anybody in the rural area has.By making them an expert in a certain skill we help them gain credibility. This does not involve huge costs and is easy to use outside of prisons.
Coming back to the stigma again:Won't a lot of factory or business owners think that an exoffender is frankly not the best person to hire? This is a very good and legitimate question. There have been extensive studies on this subject all over the world.These studies prove that in most cases ex-prisoners are more than thankful to be given a chance again and show their reliability. Transferred to the Bangladeshi context try putting yourself in the shoes of a stigmatized and excluded prisoner. The majority of prisoners are “sad not bad” and will grasp the opportunity offered. Would you risk jeopardizing this wonderful chance of learning a profession and being able to provide for your family and society? Probably not.Apart from that, we have a thorough selection process for the skills development component.
Do prisons have the facilities for such trainings? In some Prisons the sheds and machines for teaching skills development exist, but they were hardly beingused; sometimes because no trainers were available or the organizational capacity was not there. Our program is addressing this problem. In prisons where we have the facilities, we identify trainersand then we identify persons who are suitable for training and just do it!
For those prisons that do not have facilities, we offer trainings opportunities outside the prisons, which the prisoner can attend voluntarily,after release. In prisons which do have space and facility, we started the training already within the prisons. In Bogra we have 137 people already being trained in computer skills, tailoring,weaving of furniture and electric mechanics. Upcoming in Bogra we have a hair dresser and beauty parlor training. The prison staff will identify which prisoner is suitable for such training. As a side effect, it has been demonstrated that prisoners who are assigned aresponsibility in prison tend to be less violent and subsequently better postrelease.
My last question:How are the prisoners responding towardsthese opportunities? The motivational level is higher than expected. Many of the prisoners realise what a huge chance and opportunity they are being presented with. Let me answer your question with the words of one prisoner: ”I am very happy to learn how to do this [repairing household items], this will help me a lot when I come outside, when I am back in reality!”
Talking Logistics now Ms Sengupta, I understood that GIZ is not changing any of the infrastructure of the prisons, correct? This is correct.GIZ is not assisting in building bigger prisons to tackle the overcrowding. We would onlycure the symptom of overcrowding and not the reason itself. The reason for overcrowding in prison lies in the huge case backlog, caused by slow movement of cases. We assist the Prison Directorate, the Community and the Formal Justice System to work together, more efficiently towards joint solutions to make the existing system work more efficient. {Emerging Bangladesh} bgcci.com
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COVER STORY
Global Sourcing Trends and Bangladesh With rising sourcing costs and a number of issues such as compliance, safety, etc., complexity is the new “hot topic� in the global apparel industry. Dr. Achim Berg from McKinsey & Company pens the trends of the future and how Bangladesh can help companies address them. 22
{Emerging Bangladesh} Jan. - Mar. 2014
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hree out of four chief purchasing officers (CPOs) interviewed last year for a McKinsey survey on Global Sourcing expected their sourcing costs to increase slightly, moderately, or strongly but on average by about 1.7% over the next 12 months. Whether this increase is going to take a toll on the industry or not demands further elaboration; but there are certain issues we need to take into consideration. For example, think about the strong deflation in apparel sourcing costs, which had proven beneficial for companies for years, but is no longer the case. Many fear that a structural shift in overall market dynamics is about to occur, thanks to the inflation in sourcing costs. Companies, within this context, will need to re-strategize the entire game plan as consumer buying behavior seems to suggest that price remains a very important purchasing factor. As data suggests, large apparel companies expect an average cost increase of around 3.5% over the next 12 months, posing a difficult situation for them to be able to mitigate costs and make customers happy at the same time. Other costs will also rise. For one, there are the rising labor costs, especially in China. In addition, rising energy and transportation costs are further exacerbate the situation. The cost of raw materials is also going to create a bumpy ride as it depends upon factors such as prices of cotton, man-made fiber, and wool, all of which fluctuate fairly often. Then there is a rising trend of waning bargaining power among mid-market managers, which is certainly going to affect their negotiation ability with companies. McKinsey research shows that there are five main criteria that apparel buyers must consider when selecting sourcing locations, namely: price; quality; capacity; speed; and risk. Not any single criterion can be targeted to help decide upon a sourcing destination. While a country such as Turkey is known for its quality and timely delivery, it has disadvantages, e.g., high pricing. On the other hand, Bangladesh, which offers an unbeatable sourcing price, is still trying to catch up with other locations when it comes to sophisticated 24
infrastructure and compliance. Therefore, buyers need to work with a mix of countries based upon the positioning and sourcing strategies of their company. China, as is well known, has been the most important player in the global apparel market for decades, as it is the largest apparel exporter and will remain so in the near future. However, many companies are seeking an alternative to China. Responses of as many as 72% of all CPOs surveyed echoed this truth. So in which direction will the 'sourcing caravan' of the global apparel industry head next? The answer involves a few regions, such as South-East Asia, Southern Asia, and new, promising locations such as Sub-Saharan Africa. In this context, I would like to point out that while near-sourcing is a real trend, it's one we shouldn't get too excited about just yet. Being close to Europe had made North Africa a key sourcing location for many European buyers for nearly two decades. Nevertheless, it will take a long time before the Sub-Saharan region emerges as a key sourcing destination, since export volume from this region is not going to become significant any time soon. Some big names, such as H & M, have already placed orders with Ethiopia, which is a clear sign that perhaps in five years or more, we will see more companies testing the waters in that region. This also brings our attention to the fact that companies' CPOs are now focusing on several factors while choosing a destination. Initially, their sole goal was to increase productivity, which is still high on their agenda, but now they have to think about cost minimization and compliance issues. The recent tragic accidents at Tazreen Fashion and Rana Plaza have compelled them to contemplate the latter more intensively. In 2011, McKinsey research indicated that Bangladesh had the potential to achieve exports from its ready-made garments (RMG) sector of USD 36 billion to 42 billion by 2020, provided that the sector can overcome certain challenges, particularly relating to compliance issues and infrastructure. This was based upon the assumption that there is an annual growth potential of 7 to 9% compared to the historical
{Emerging Bangladesh} Jan. - Mar. 2014
average annual growth rate of 12%. In the same survey, 80% of our respondents ranked Bangladesh within the Top 3 sourcing countries, which changed in our 2013 survey: just 52% have placed the country in Top 3. This is most likely because of the accidents that have mired Bangladesh's image on an international level as a sourcing location. Vietnam is in the second position, whereby some 48% of CPOs are convinced of being able to source from there. Other countries named were Cambodia, India, Indonesia, and Myanmar. The latter, as most would agree, is somewhat of a surprise entry on the list. The country has the good fortune of being located at the heart of Asia a very significant geopolitical location and still, most of its market is untapped. For countries such as Bangladesh, India, and Pakistan, their massive export volume will keep bringing CPOs to the door. Especially Bangladesh is a country that has a lower average price point, as it exports a high volume of products. Most of the industries are located around the capital Dhaka and one big factor is that labor costs are lower than those in China, although the productivity level is only 70% of that of the biggest global exporter of apparel goods, according to rough estimates. The biggest hurdles are Bangladesh's poor infrastructure and energy supply. Now that competitors such as Pakistan and India are emerging, Bangladesh has to notch up its performance if it is to retain its good sourcing location position. Pakistan's unstable political situation is a clear deterrent for international buyers, but its recently earned GSP+ status will ensure its duty-free entry into Europe. The country also enjoys good availability of raw materials, such as cotton. India, on the other hand, is huge and hence, the market is fragmented, which prevents it from harnessing its best possible inherent potential in the apparel industry. Other countries, e.g., Cambodia, Indonesia, and Vietnam, are not yet on par with any of the countries mentioned earlier when it comes to handling large-scale manufacturing. Environmental sustainability and compliance two muchdiscussed issues in the industry since last year are here to stay. While consumers are more aware and concerned about working conditions in the East than ever before, they are not prepared to pay extra for goods. That is why companies will need to come up with ways to get a grip on their costing in really addressing compliance and safety issues simply talking about risk management is not going to be sufficient going forward. Governments, factory owners, and non-government organizations (NGOs) are
working together to better working conditions. While there appears to be concerns that the cost of compliance is going to affect sourcing costs and retail prices, our survey results show another side to the story. CPOs admit that it can affect pricing to some extent, but none of them had any complaints about the current CSR activities being run by companies. In this context, there are two big initiatives worth mentioning: Accord and Alliance. Companies know very well that they are now under the scrutiny of international watchdogs and hence, many have implemented stricter standards and more effective auditing regimes. Additionally, increasingly more buyers are carefully checking the factories before placing orders in them. Also, rather than relying upon government notification, buyers are sending engineers to check the condition of the building and legal documents. The Accord on Fire and Building Safety, signed mostly by companies in Europe, and the Alliance for Bangladesh Worker Safety, signed by companies in North America, are two bold initiatives that will definitely usher-in big changes. These two pacts have brought big brands and companies under one umbrella to develop a unified common industry standard, which will ensure further transparency and compliance. Once the initiatives manage to bear proper results, the examples can be rolled out in other countries that have similar trends in managing labor costs and/or infrastructure facilities. In addition, to avoid demerits of sub-contracts, which is a common occurrence in Bangladesh and there is barely any record available on their numbers, buyers from Europe and the US should increase their presence in the sourcing countries. The aim should be to work more closely with local companies to help them identify unauthorized subcontractors, many of which claim to be from small companies that are reluctant to comply with or are totally unaware of compliance and safety issues. To create a strategy for the future, companies will have to take into account the kinds of strategies they adopted in the beginning and how that helped them shape their businesses. But putting all their eggs in one basket is not going to be the answer companies should look to source from locations other than just China or Bangladesh. At the same time, they should be more critical in deciding what kind of companies they would like to work with in the future. CPOs will therefore play a more pivotal role in thoroughly understanding the complex dynamics of apparel sourcing and foster a win-win solution for all parties involved.
To create a strategy for the future, companies will have to take into account the kinds of strategies they adopted in the beginning and how that helped them shape their businesses. {Emerging Bangladesh} bgcci.com
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SPECIAL INTERVIEW
Dr. Achim Berg
In an interview with BGCCI, Dr. Achim Berg and Saskia Hedrich answered three key questions about Bangladesh’s future as a RMG manufacturing country. Dr. Achim Berg is a principal in Mckinsey's Frankfurt office and one of the leaders of Mckinsey's apparel, fashion and luxury group. Saskia Hedrich is a knowledge expert in the apparel, fashion and luxury group in Mckinsey's Munich office. 26
Q. How can Bangladesh move up the value chain and manufacture more quality products for the global apparel industry? Moving up in the value chain can occur in two ways. On one hand, producing higher quality and more complex products, and on the other hand, moving from being a CMT supplier to integrating product development and design. Since both require skilled middle managers and skilled workers, investment in education and vocational training is necessary. Additionally, manufacturing more complex products will need to be supported by backward integration, requiring capital investment.
{Emerging Bangladesh} Jan. - Mar. 2014
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The investments companies are making in compliance need to be more visible.
“
Saskia Hedrich
Many companies in Bangladesh are producing good quality products under compliant situations, although a generalized perception is that the businesses are sweatshops. How can we change that perception? The investments companies are making in compliance need to be more visible. Corporate social responsibility experts and buyers report improved labor and social compliance standards. However, there is still a broad range of compliance seen across suppliers and many unsolved topics still exist. Solving these issues and achieving ethical labor standards and sourcing practices are key prerequisites in Bangladesh's apparel industry from our perspective. The country's situation offers more opportunity to make supplier conduct transparent than would be possible in countries such as China and India, as their industry locations are much more spread out than those in Bangladesh. International buyers should also actively use unannounced visits to help achieve transparency, as there are still "black sheep" in the industry. For instance, out of about 5,000 active manufacturers, only 50 to 100 of them are mentioned as having achieved very high standards. We suggest that buyers continually push efforts to
increase and maintain compliance standards by educating workers, implementing standards at suppliers, and fostering full transparency in the supply chain via the local sourcing offices.
Bangladesh's labor costs are very attractive compared to those of other countries. Many fear that due to issues such as achieving compliance and workers' welfare and safety, labor costs will increase. Is there anything that Bangladesh can learn from China in this context? Over the last few decades, China has moved from being a CMT producer to ODM (original design manufacturing), to developing brands, and even building up a footprint in technical textiles. With this industry-wide move to more value-added products, the pressure on labor cost as seen in basic products was mitigated. This upgrading of the industry was driven by a strategy that was clearly planned and implemented by the government.
{Emerging Bangladesh} bgcci.com
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MEMBERSHIP IN 2013
Membership: In Retrospect
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or more than 10 years Bangladesh German Chamber of Commerce & Industry (BGCCI) is providing trade supports to its members all over the world. Our mission is to promote trade relations between Bangladesh, Germany and other countries in Europe. Our sincerity towards our members helped us to become the largest bilateral business chamber in Bangladesh. The 2013 was a remarkable year for BGCCI in terms of expanding the membership numbers. With a growth rate of 137.07% than previous years BGCCI was able to manage an additional 152 members in 2013. The total number of membership services
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till 31/12/2013 was 562 which is now more than 570. Mainly BGCCI offers two types of membership: Membership with Ordinary Services and Membership with Gold Services. An organization or an individual person both are eligible to apply for any types of the membership mentioned. In 2013 the emerging membership trends was in Construction Industry, Health and Medical Industry, Indenting, Liaison Office & Buying Agents, IT, Communication & Media Industry, Research & Testing Industry. Another remarkable service that BGCCI is providing is the Visa support to its members. BGCCI has an understanding with the German
{Emerging Bangladesh} Jan. - Mar. 2014
Embassy to arrange visa appointment for BGCCI members in Wednesday of every week. BGCCI not only arrange visa appointment for its members but also help them to prepare their application pack which include checking the visa application form and helping them to arrange necessary documentation to submit the application by providing them a guideline. The number of members BGCCI can recommend has been increased last year from 4 members to 5 members now. In 2013 BGCCI arranged visa appointment for about 150 members throughout the year.
Membership Pie in 2013
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ENHANCING PRODUCTIVITY AND COMPETITIVENESS THROUGH A SUSTAINABLE BUSINESS MODEL: BSCI AS A TOOL FOR IMPROVING SOCIAL COMPLIANCE IN BANGLADESH
Interview with Lorenz Berzau, Managing Director, BSCI 30
{Emerging Bangladesh} Jan. - Mar. 2014
SPECIAL INTERVIEW
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It will be key for factories in Bangladesh to enhance their social as well as environmental performance to show that they deserve a leading role as RMG suppliers also in the future.
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How do you perceive CSR in Bangladesh?
Bangladesh plays a crucial role in global business its RMG industry is key for the economic growth of the country over the last decades. It will also remain an essential sourcing market for international retailers, brands and importers in the coming years. However, businesses need to keep adapting and improving their strategies and activities to remain competitive over a long time. Throughout the world, Corporate Social Responsibility has become a mainstream topic, thus Bangladesh makes no exception to this development. Bangladesh has even drawn highest attention from media, businesses, consumers, governments, trade unions and nongovernmental organizations in this context since the tragedy of the collapse of Rana Plaza and fires in factories. This has underlined that compliance with national as well as international rules and going beyond bare compliance is not only a matter of following a mainstream topic but a matter of survival. This is not only relevant for the industry in Bangladesh but all over the world, as recent cases in Western Europe have shown again. However, the particular role of Bangladesh as the second largest textile producer in the world, the dimension of existing challenges in the CSR area and, in this context, the industry with the comparatively lowest wages for workers in the sector, explain the specific focus on this country in the current CSR discussion. It will be key for factories in Bangladesh to enhance their social as well as environmental performance to show that they deserve a leading role as RMG suppliers also in the future. It is about building trust and confidence, key elements in engaging in solid business partnerships.
Could you explain the role of BSCI? Hundreds of RMG factories in Bangladesh are involved in the Business Social Compliance Initiative (BSCI) through their retail and importer customers. These currently 1300 retailers and importers from Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Sweden, Switzerland and other countries are participating in the BSCI and commit to improve social compliance in their global supply chains. The Brussels based Foreign Trade Association (FTA), representing the interests of importing companies mainly from Europe, has launched the BSCI in 2003 as a consequent reply to the need to provide companies sourcing globally with an efficient platform and methodology to improve social compliance.
BSCI provides a system for independent monitoring, capacity building and stakeholder dialogue the three pillars of the initiative. Thus, training workshops for factory managers in Dhaka have been a key activity since 2004. Regular discussions between government, exporters' associations, buyers, trade unions, NGOs and academics at a Round Table in Dhaka (and once in Chittagong) have provided an ideal platform to exchange views and experiences, as well as expectations and hopes, in a constructive way.
Is BSCI a business initiative? BSCI is a business driven initiative and the fact that it is run by the FTA demonstrates that it is built on trust and cooperation between Bangladeshi factories and BSCI participants: importers and exporters have a common interest. In the past only the factor price was important, today compliance comes first followed by quality and delivery on time. The new Code of Conduct launched by BSCI earlier this year underlines the fundamental belief and also the expectation that social compliance in a global supply chain can only be a reality if all business partners, at all levels, assume their share of responsibility. Only then, business can also be sustainable and can keep growing. Practically, this entails a strong, well educated and motivated workforce in healthy and safe working conditions as they are the capital of a labour intensive industry. It is therefore important to invest in good working conditions not to please a labour inspector or a social auditor, but for the wellbeing of the company. I am pleased that we cooperate with BGCCI and the well known Global Social Responsibility Conference initiated by Mr. Seidl, in order to create more awareness between all stakeholders, responsibility and ownership.
What are the recommendations for all the stakeholders? Genuine engagement is not only needed from the entrepreneurs in Bangladesh, but also from the government and other stakeholders. They need to support and enable the RMG industry to provide good working conditions, as this will be decisive for the productivity, reputation and in consequence for the competitiveness of Bangladesh as a global economic player.
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TRADE FAIRS
Messe Dusseldorf Fairs in 2014 (April to June) Bio West
30.03.2014 - 30.03.2014
International Tube and Pipe Trade Fair
07.04.2014 - 11.04.2014
www.tube.de
International Wire and Cable Trade Fair
07.04.2014 - 11.04.2014
www.wire.de
components for processing and packaging
08.05.2014 - 10.05.2014
www.packaging-components.com
Processes And Packaging Leading Trade Fair
08.05.2014 - 14.05.2014
www.interpack.com
Trade Exhibition for Funeral Homes and Services 29.05.2014 - 31.05.2014
www.befa2014.de
INTERBRIDE
31.05.2014 - 03.06.2014
www.interbride.eu/en/home
Vivanti
28.06.2014 - 30.06.2014
www.vivanti-messe.de
ElectronicPartner Herbst (closed shop event for electronical equipment and multimedia)
3. Quarter 2014
www.electronicpartner.com
Infotage Dentalfachhandel (Dental Trade Fair)
3. Quarter 2014
www.iddeutschland.de/west
Fairs in Bangladesh Great India Education Fair Dhaka
June 24-25, 2014
BASIS SoftExpo 2014
June 05-08, 2014
International Trade fairs around the world (April to June 2014) Hong Kong Houseware Fair, Hong Kong (Handicraft)
April 20-23, 2014
Seafood Expo Global -2014, Brussels, Belgium
May 06-08, 2014
US-Bangladesh Technology Investment Summit, Silicon Valley, California, USA
May 2014
The 24th Int'l Exhibition on Shoe & Leather Fair, Guangzhou, China
28-30 May, 2014
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{Emerging Bangladesh} Jan. - Mar. 2014
SPECIAL REPORT
#EconoConversation 2013 was a mess! So many uncertainties, so much chaos! Nothing could avoid the havoc of political violence. But we are happy that even the darkest cloud has a silver lining. We would like to look at the future with a positive attitude. We expect 2014 to be the year of turning around. We want to show the world that not all hope is lost. Still, we have the ability to make our dreams come true. #EconoConversation is an attempt to shed lights on future prospects of our economy. With a series of interview, we have shared our ideas with businessmen and industry experts. In this issue, we are grateful to three distinguished person for their valuable opinions. Dr. Mustafa K Mujeri, former Chief Economist of Bangladesh Bank, now the Director General of Bangladesh Institute of Development Studies. He tells us about the development sector and the possibility of good results from the amalgamation of trade and aid. We have talked with Faruque Hassan, Managing Director of Giant Group and Vice President of BGMEA. He points out about the possibilities and lacks of the Ready made garments sector. Last but not least: in a candid interview, ace business man Rubel Aziz has described his prescription on how our economy can turn around. 34
{Emerging Bangladesh} Jan. - Mar. 2014
#EconoConversation
DR. MUSTAFA K. MUJERI Director General, BIDS
The overall growth performance of the economy during the year will critically depend on how fast the disruptions can be amended and how soon normal economic activities can resume.
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Q
What can we expect from the development sector this year? Development is a multidimensional process which has several key indicators such as GDP growth, social progress, environmental sustainability and many other aspects. Moreover, these dimensions have mutual interactions with each other which affect the entire process and this is why we need to understand the complexity of the processes of the development sector and analyze the interactions from the multidimensional context in a comprehensive manner. It is also important to recognize that these interactions are not unique; these are very much dependent on country specific
{Emerging Bangladesh} Jan. - Mar. 2014
situation. From such a perspective, the development sector must be viewed in a continuum covering a longer time horizon which takes its own course determined by the initial conditions and the development paradigm adopted by the country. Bangladesh is set to follow a development path that would lead the country to become a middleincome country by the year 2021 along with achieving specific socioeconomic goals. For the purpose, the government has prepared the 6th Five Year Plan covering the period from 2011 to 2015 within the longer term Perspective Plan. Recently, work has started for preparing the 7th Five Year Plan as well. Bangladesh has been performing relatively well in terms of development over the last few years. Economic growth has accelerated to more than 6 percent and Bangladesh has made commendable progress in many social indicators. In fact, the country has emerged as a role model among the developing countries especially in terms of achieving rapid social progress even at a low level of per capita income. The performance of the economy, however, has suffered a temporary setback during the current fiscal year due to political turmoil which affected the economic activities in the country especially during the second half of 2013. The overall growth performance of the economy during the year will critically depend on how fast the disruptions can be amended and how soon normal economic activities can resume. Already, the economy has succeeded in bringing back normalcy to a large extent over the last two months and our expectation is that growth of the economy will rebound to its usual pace in this year. For rapid development, it is important to recognize that a stable socio-political atmosphere is a pre-condition for a properly functioning economy. Otherwise the wheels of the economy would be sluggish affecting almost all sectors of the economy and slowing down overall development. According to the 6th Five Year Plan, our GDP growth rate should reach 8 percent in FY2015 which requires a significant acceleration of economic growth from its current level of around 6 percent. This means that the development process has to further grow and accelerate to reach the stipulated targets.
Do you think it is possible to become a middle-income country by 2021? Bangladesh definitely can emerge as a middle income country by 2021 provided we fulfill follow a development path that would fulfill the requirements through availing the tremendous opportunities that the country possesses. We have
enough potential in the economy to materialize our dreams. For rapid economic growth, the investment rate has to be around 35 percent by the next decade from its present level of 26 percent. In the process, the private sector will have to play the key role while public investment will create an enabling environment for attracting higher private and foreign investment. The private sector will then be encouraged to invest more resources into their existing ventures and seek to explore newer opportunities. In this context, one big barrier to investment in Bangladesh, which now seems almost insurmountable, is infrastructure and energy. Besides, we have high land prices for establishing new enterprises, administrative complexities and lack of good governance which need urgent attention. The need for the government is to invest substantial resources in infrastr ucture development through mobilizing more revenues through taxation and other means. It may be mentioned that Bangladesh's tax-GDP ratio is still one of the lowest in the world. For moving forward, we must enhance our tax efforts. We need to significantly expand the volume of public investment and improve its quality. We should also remove the constraints facing the FDI.
How can we attract more FDI? Any suggestions? Bangladesh has wide potential to attract more FDI for which the creation of an investmentfriendly climate is a pre-condition. During this year, many investors were discouraged to invest due to political uncertainties. Besides, in this age of globalization there is a stiff competition across the countries to attract more FDI hence Bangladesh must create an edge over other countries to have a bigger share of global FDI. We have to prove the investors from home and abroad that there are wider opportunities in Bangladesh! The country already has enacted rules and regulations to bring more FDI in the country. The challenge now is to ensure their proper implementation so that the investors find this country as more attractive for investment. For the purpose, the country must get rid of political uncertainty and ensure good governance. We should strive to change the image of Bangladesh in the outside world and promote it as the most preferred investment destination of the foreign investors. The facilities given to the foreign investors should be streamlined, bureaucratic hurdles should be removed, and the mechanisms should be simplified. The efficiency.
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The facilities given to the foreign investors should be streamlined, bureaucratic hurdles should be removed, and the mechanisms should be simplified. We need to work hard to enhance faith in overall corporate governance. For this, a stable environment is necessary where policies have longer term vision and are predictable favoring loner term investments in FDI with reasonable returns.
Among all the sectors, which one according to you demands the most coveted attention from the government? Kee ping the g rowth and investment perspectives, energy and transportation sectors deser ve special attention. For attracting investments, physical barriers like availability of land at reasonable prices can facilitate investments in productive activities. Overall, the. government should prioritize investments that would break the barriers that are deterring the private sector from increasing investments in various sectors. For moving forward, skill development is crucial, especially in the mid-level management and technological skills including ICT. The present skill development programs fall far short of what is needed for the country to enter into the knowledge economy. The government needs to invest heavily to expand market relevant skill development programs through revamping existing technical schools in the public sector and establishing new institutes with close links with the private entrepreneurs and under public-private partnership.
BIDS has been working on several projects related with Bangladesh's agro sector. Would we be able to feed our growing population by 2021 if agriculture keeps developing at the current pace? The food security agenda has received renewed emphasis in Bangladesh especially after the global food price hike in 2007-2008. We have become almost self-sufficient in rice, the staple food grain. However, the perception of self sufficiency in rice alone is not adequate. We need to ensure productivity growth in many other food items including nutritious food such as protein, fruits, oils and others to supply a balanced diet for the population. Moreover, the demand for non-cereal
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food would rise faster as income rises. The twin objective of the food policy should be ensure both food and nutrition security for all. With the rising share of the middle-class in the society, the pattern of food demand will rapidly change along with rising incomes and changing lifestyles. Diet diversity will have to be taken into account in devising relevant policies. For agriculture in Bangladesh which is confronting declining availability of land for crop production, new technology is the key to raising production of all crops and other products such as livestock and fishery products. In Bangladesh, the public sector must invest heavily in agricultural R& D to adapt new technologies and implement forward looking agricultural policies including value chain development to ensure adequate incentives to the millions of small farmers to increase productivity and production. For meeting the demands of agriculture, effective land use planning should be adopted.
How can we mix trade and aid to ensure a win-win situation for donors and recipients? In the present globalized world, trade can play a key role in fostering development in a country like Bangladesh. The role of aid especially that of aid for trade is critical to realize the potentials of trade in development. Various dimensions of trade can be facilitated by aid to realize the potentials. In this context, both development and business sectors should be working hand in hand. In this respect, bilateral business chambers can play a significant role. They can help in capacity building for the private sector institutions and individuals as well as help in conducting scoping missions to attract foreign investors and enhance trade. For example, BGCCI can identify and help Bangladesh in exploring Germany's trade potentials. It can help find the loopholes and constraints in the system that work against the business sector especially in promoting and diversifying trade. In this context, capacity building in meeting quality requirements is a critical area for cooperation. Along with enhancing the existing relationship between the two countries, the collaborative framework should also look for newer horizon in deepening the partnership.
{Emerging Bangladesh} Jan. - Mar. 2014
#EconoConversation
FARUQUE HASSAN Managing Director, Giant Group Former Vice President, BGMEA
The whole clothing sector is going through a paradigm shift, that can almost double the current export rate.
Q 40
What is the condition of readymade garments sector right at the moment? The overall situation is improving. Last year, NovemberDecember month was worst in Ready made garments sector's history. Many factories were closed due to political violence. The affect of which will be felt now. March and April of this year may face a crunch in overall RMG export. However, as stability is back, buyers are now visiting our factories. Regaining their confidence was one of
{Emerging Bangladesh} Jan. - Mar. 2014
the most important tasks we had, which we successfully earned back. At the same time, we are venturing into new emerging markets. To meet the challenges of tomorrow, we need both product and market diversification. We are coming out of an era of seasonal export. Now we work round the year, which is definitely going to give a big boost to our business. We hope duty free access to new markets like India, Korea, and Japan is also going to add momentum. So, I am optimistic about the overall condition. This year will help us seize new opportunities. Provided the situation remains stable, we can do much better.
A lot of incidents of RMG unrest took place last year. What was responsible for that? You see, compliance and safety issues are big nowadays. The two massive accidents at Tazreen Fashion and Rana Plaza showed us the result of being irresponsible. I am happy that deals like Accord, Alliance were done and we could form a National Tripartite committee. At BGMEA, we have always been strict about factories that did not abide by the rules and regulations. Yet, there are some 800 unrecognized factories, which work as subcontractors for various big brands. We are trying to map out their locations and bring them under BGMEA's scrutiny. Though there are still discontents about compensations to the Rana Plaza victims, we are trying hard to rise up to the expectation. One important thing is that the workers here are easy to manipulate as they have little knowledge about trade unions and their rights. This, in many ways, fuels workers' unrest. Nevertheless, we have increased the minimum wages for the workers, which is welcomed by both workers as well as factory owners. In fact, we cannot think about the betterment of a factory by keeping its workers less-motivated due to meager payments.
thinking about paying more for their outsourced products. Also, they will have to take into consideration the cost of being compliant.
Do you think the current leadership at BGMEA can take Bangladesh's RMG sector to a new height? A. I personally believe BGMEA achieved a lot instead of many limitations. In the RMG sector, as you know there is a big shortage of energy and infrastructure. Until now we have been doing capacity building, whereas the next generation of RMG owners will be more tech savvy and environment conscious. They would like to reduce their water or carbon footprint. To buck up with them, the existing leadership will need to become more dynamic. We need more coordinated effort. The whole clothing sector is going through a paradigm shift, that can almost double the current export rate. For that, working closely with BKMEA, BTMEA, etc. is very important. From the government's side, we look forward to proper policy support and making processes easier for a greater good.
India is breathing on the shoulder of Bangladesh. Should we be worried? Yes and no. Currency rate is an important factor in the international business. If you look at the data, Indian Rupee was 28% devaluated and 1.8% appreciated in last one and a half year. To gain the competitive edge, we need export friendly currency rate. Also, utilities, logistic support etc. are readily available in India. Their government is giving many incentives to the RMG owners. They are the second largest raw cotton exporters in the world. Their backward linkage is also good. Gradual currency depreciation will help us gain competitive advantage. The government should provide gas and electricity to factory owners on priority basis.
Bangladesh has a serious image crisis Is the wage hike going to affect pricing in the international media due to of a product? RMG sector. What's your take on that? It certainly is. It is unfortunate that a vicious cycle of ill pricing has become prevalent in the RMG sector. As we are trying to move up the value chain and offer more skilled, sophisticated service, that is going to make the whole pricing strategy a bit more complex. The wage hike is going to send a signal to our buyers that it's time they started
Many positive things are happening all around. We need to spread the good news. I believe a new form of dynamic leadership at BGMEA will help the international media change their perception about Bangladesh that is trying to become a middle income country.
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#EconoConversation
RUBEL AZIZ Managing Director, Partex Group
Politics and business can walk side by side, provided both have a common goal: making the economy stronger.
Q 42
Last year has tumultuous for business, right? It was a very tough year, for everyone, big enterprises as well as small and medium ones; the latter suffered big time. As an exporter, my woes were manifold and interlinked. Due to blockade and hartals, we could not meet export delivery timelines. We tried frantically but ended up being defaulters. Every single transportation cost sky rocketed, small trucks that carry our goods were charging 5-6 times higher the money; a big volume of air shipment charge gave every exporter sleepless nights. Above all, the chaos, uncertainty, the fear was too bad for a developing economy, which is still looking for a suitable roadmap to become a middle-income country. {Emerging Bangladesh} Jan. - Mar. 2014
How to turn around the situations? Political instability is the cryptonite for our economy. The first and foremost job of the government is to ensure sustainable growth. And how to do it? Fixing the transportation system is a cry of the moment. If you look at the history of South Korea, the country had the same GDP as ours in 1971. Where are they now right now? Our roads and highways are in shambles. The government should pour a heavy dose of attention in that sector and come up with a visionary plan. We must seek international cooperation in the form of financing, building and maintenance since we ourselves cannot do everything, let alone in a short period. While calling for international tenders for mega projects for highways, we have to ensure transparency. Live telecast of tender openings will earn trust of both local people as well as international bidders. Then comes the electricity shortage. We are a power-hungry economy and for us quick rental may prove beneficial for the time being, but not in the long run. Coal-based or atomic power plants hold the key to solving the problem of power shortage and we have to start our march towards that future. On a different note, I am not a big supporter of subsidies. Let me give you an example of my own business. We export threads. Government provides 7.5% subsidy for exporting yarn and 10% for sacking bags. As a producer, I do not want it. When government offers subsidies in any sector, both buyers and sellers know about it and the pricing of that good is done accordingly, which in fact, makes the buyer a gainer. And then there is bureaucratic red-tapism to rub more salt to the wound: to get the subsidized money, businessmen have to bribe in different levels of government. The solution is to provide no subsidies in this market, since India is already charging a lot higher price than ours, the fear of losing buyers is baseless. We can offer a more competitive price and make profits from our buyers and above all, no hassle of pleasing bribemongers. I can give many other examples like this. My point is: policies should be user-friendly; to help us unlock the potential not to paralyze the overall process.
high morale, patriotism but also there are many who are polar opposite of the former breed and only do politics to become rich overnight. For this, you will see more people are interested to try their luck in politics and very few to do business, as it involves a certain amount of risk and demands leadership skills to become a successful entrepreneur. My point is, a politician's job is to ensure that the right policy is there. Besides, many a times, we businessmen spoil these politicians for our future gains and this is absolutely polluting the whole system. This has to be stopped, prevented. One way is to tighten up corporate governance. I believe all good businessmen are law-abiding and truly believe that their responsibility is not only to amassing wealth but to make the best use of that wealth for the betterment of the country. But when the policies are fussy and full of loopholes, through which delinquency makes its way in, businessmen become frustrated. Probusiness politics can help us in this regard.
What kind of roles should Chambers play to help business grow? Business chambers should be the hub where ace businessmen can come together to share their visions and find ways to advice reforms that can ease the process of expanding an already existing business or a newly set-up venture. For that, we expect that the officials from Government's side too will give proper and patient hearing. In addition, policy implementation is also very important or everything will remain the same. On the other hand, the Chambers should ensure that they have genuine exporters and importers, who know the business firsthand; know what needs to be done to make things easier for any particular industry or sector. Businessmen who only become members or fancy big posts in Chamber to increase social status should be discouraged because they, in fact, have very less to offer to the chamber.
Can politics be separated from business? Politics and business can walk side by side provided both have a common goal: making the economy stronger. Unfortunately, we see a different kind of practice in our country. Here politics is an easy way of becoming a gainer. History is full of examples of politicians with {Emerging Bangladesh} bgcci.com
My point is: policies should be user-friendly; to help us unlock the potential not to paralyze the overall process. 43