DCCI for creating emergency fund using forex reserve

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Dhaka Chamber of Commerce & Sector (DCCI) urged the Bangladesh Lender (BB) amid coronavirus pandemic to create a crisis fund with 1.0 % interest using foreign exchange reserve to aid the financially stressed businesses for paying out earnings of their workforce.

The DCCI also urged to strengthen private sector for a sustained economical growth amid coronavirus pandemic, according to a statement.

Furthermore, the BB can waive bank interest of affected export- oriented making sectors for next one year. Alongside, additional promising export sectors could be brought beneath the scope of EDF scheme, it said in affirmation issued on Tuesday.

The central bank may also consider extension of repayment period for worst influenced businesses. Together with, for the liquidity in banking sector, Bangladesh Lender may relax the money Reserve Ratio (CRR) threshold for next 12 months. It is well worth mentioning that the new protective measures of Central Bank including credit repayment overall flexibility, time expansion of EDF and back to back LC are apparently non-public sector friendly, the DCCI explained.

For MSMEs, the DCCI recommended to make a LOW PRICED Financing Facility which is often associated with existing Re-financing scheme of Bangladesh Lender. To support the smooth operations of MSMEs over the board -VAT on professional rent, electric power, gas and water charges and license renewal charges could be withdrawn for following one year.

The coronavirus outbreak has profound effect on global economy and individual lives worldwide. This outbreak has recently triggered worries of global recession impacting industrial production, global source chain, aviation & hospitability industry, retail organization, demand for products & providers and careers, according to a assertion.

In the meantime, UNCTAD estimated global development would slow down maximum 1.5 % in 2020 and ILO warned about 25 million jobs could be lost worldwide because of outbreak, it said. 

ADB predicted earlier that Bangladesh market may contract by 1.1 of GDP with 894,930 job loss. Bangladesh has recently experienced a disruption of supply chain of RMG sector, Leather and Pharmaceutical Sector, SME, tourism and aviation, the DCCI said.

The geo-economic meltdown also damaged the major export destinations of Bangladesh like European Union (EU), USA, UK and Canada. To deal with the outbreak, many EU countries and different part of the environment have enforced lock-down which outcomes into shut-down of high-road retail businesses and trade network to the large level. In the wake of this, export of Bangladesh to these locations have fallen, it mentioned.

This downward trend of cross-border trade is set to undermine both local and export-oriented industries of Bangladesh. Of the export basket of Bangladesh, large export sector RMG alone will incur $2.0 billion export loss and pharmaceutical, natural leather and agro digesting and other sectors might incur substantial amount of reduction. Amidst this looming circumstances, private sector-the lifeline of overall economy, needs to be backed for the economic fascination of Bangladesh, it additional said.

In line with this, to keep economical effects bare minimum, DCCI put forwards some timely and monetary recovery friendly recommendations in conditions of policy measures and reforms.

DCCI also feels, as a fiscal burden lowering approach of the private sector, Federal government may waive all varieties of In and VAT for both import and local levels including food and essentials items, health, hygiene instruments, medical kits and export oriented manufacturing industry for next 12 months which can only help businesses to turn-around to the some degree. Together with, NBR may consider individual and corporate tax concession to aid the victims.

In a bid to safeguard the persons and economy from the adverse impact of coronavirus, DCCI urges Government to gather its global allies and partnership in a coordinated endeavour. DCCI likewise feels Government may way emergency financing establishments of IMF, ADB and the World Bank alternatively financing stream against low interior revenue trend. Alongside, Government may negotiate with overseas development partners seeking interest waiver of your debt payment for subsequent one year.

DCCI also feels for greater socioeconomic balance, the social back-up could be expanded encompassing all vulnerable and marginalised persons especially daily labourers, task loss victims and informal micro and smaller businesses as this informal sector is the key actor of local SME industry supply chain process. To greatly help the safety net, DCCI feels revenue limit and strong industry monitoring of daily vital commodities should be strongly enforced to make sure fair cost for mass people.

DCCI hails all decisions of the federal government for the economy in the presented time so far. Even so, DCCI affirms and helps any future way of measuring the Government to control the spread the ripple ramifications of coronavirus on the overall economy. We also experience consideration of the opportune recommendations will permit private and public sector to underpin our native economic growth and overcome the global crisis.
Source: https://thefinancialexpress.com.bd

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