Businesses are being meticulously destroyed in an efficiently determined manner. Business and commerce are feeling apprehensive with the shift in the political landscape. Furthermore, a number of government initiatives have made the business community anxious.
Businesses are being meticulously destroyed: Many entrepreneurs are avoiding active operations as a result of this volatility. Several of the nation’s largest industrial organizations have closed their factories as a result. There are no new sectors being created, and there are several attempts to encourage business owners to default on their loans.
According to analysts, businesspeople must rebuild their trust in order to increase investment and employment. There is a sense of uncertainty among entrepreneurs after the political transition. Leaders in business have also underlined the necessity of preventing lawsuits against them from being abused. Loan default rules should be more lenient in addition to lowering interest rates. Businesses are being meticulously destroyed….
The export and industrial sectors suffered greatly during the Sheikh Hasina-led Awami League government’s mid-July curfew and internet blackout, which were implemented to quell student protests calling for quota reforms. A faction purposefully carried out attacks on factories, protests, and vandalism after the fall of the Sheikh Hasina government on August 5. A sizable portion of the nation’s manufacturing have stayed closed ever since.
As a result, business and commerce now operate in an uncertain environment. The nation’s law-and-order situation has not yet completely changed, according to business executives.
Lawsuits motivated by harassment are being brought against businesspeople needlessly. Just because they disagree with them, cases are being filed. Assets are being seized, and many businesspeople’s bank accounts—including those of their families—have been frozen. They encounter hostility at airports and are unable to travel overseas for work. A number of people have been arrested. Businesses are being meticulously destroyed…..
Businesses now operate in a fearful environment as a result of this harassment. Entrepreneurs are choosing to remain idle and are stopping new investments and business ventures as a result of this instability. To get out of the current predicament, business leaders have urged for resolving the industrial sector’s instability.
In light of this, BKMEA President Muhammad Hatem stated that in order to enhance the state of law and order, a zero-tolerance policy must be implemented. He noted that lawsuit trading, a new form of malpractice, had surfaced in the business world. Someone files a case against a businessperson if they disagree with them or harbor personal animosities toward them. It is necessary to prevent this kind of abuse of the legal system and to drop proceedings against those who have done nothing wrong. Businesses are being meticulously destroyed….
He added that the banking industry is in disarray. “We have a lot of challenges when it comes to banking operations. We still have payment delays even when we export goods. Payrolls for factories cannot be paid. Beginning in March, any loan that is not repaid within three months of the due date will be considered to have defaulted in order to comply with the International Monetary Fund’s (IMF) lending requirements. At the moment, a loan is only deemed in default if it is not repaid six months after the due date. Businesses are being meticulously destroyed….
Loan interest rates have increased to 16–17% as a result of policy interest rate increases to combat inflation, which has slowed the expansion of private sector lending. In Bangladesh, the interest rate on industrial loans is increasing, despite the fact that consumer credit interest rates have been raised globally to combat inflation. Energy is not readily available despite its high cost. Investments have stagnated as interest rates have doubled and loan default times have been cut in half. No new industries are emerging, and closed factories are not reviving. The patterns in imports and loan disbursements provide evidence of this. Businesses are being meticulously destroyed……
In June of the 2023–24 fiscal year, private sector loan growth was 9.84%, while in the same period last fiscal year, it was 10.58%, according to Bangladesh Bank. Banks disbursed a total of 16.41 trillion BDT in private sector loans as of June 2024, up from 14.94 trillion BDT at the end of June 2023. Additionally, according to Bangladesh Bank, the opening and settlement of Letters of Credit (LCs) for imports fell by almost 13% in the first two months of the current fiscal year 2024–25. LCs for imports totaling $10.03 billion were opened in July and August, a $1.48 billion or 12.85% decrease over the same time in the prior fiscal year. Businesses are being meticulously destroyed….
Similarly, LCs totaling $10.34 billion were resolved over these two months, down $1.55 billion or 13.03% from $11.89 billion over the same period last year.
According to Zahid Hossain, a former chief economist at the World Bank’s Dhaka office, business and commerce are feeling apprehensive as a result of the political shift. Businesspeople are thinking about who might win power and are worried about the political landscape over the next year or so. He underlined that increasing investment and jobs requires restoring corporate confidence. Businesses are being meticulously destroyed….
“There is no country where businesses can operate profitably with double-digit bank interest rates,” said Syed Nasim Manzur, the president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh and a former president of the Dhaka Metropolitan Chamber of Commerce and Industry. He pointed out that interest rates have risen to more than 14% in Bangladesh. Businesses are being meticulously destroyed…
Instability in industrial operations is intolerable, said Abdul Muktadir, MD and Chairman of Incepta Pharmaceuticals. “We are incurring losses, and small businesses are facing severe challenges,” he stated.
The majority of Bangladeshi businesses lack their own cash, according to Faruk Hasan, the former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Businesses are frequently founded by a number of family members or partners. The entire group is at risk if one person or organization defaults since not only is their facility shut down, but all related businesses also lose access to financial services. He underlined the necessity of changing this system. Businesses are being meticulously destroyed…
Additionally, Faruk Hasan noted that while consumer credit interest rates are hiked in affluent nations to combat inflation, this is unlikely to happen in Bangladesh. He maintained that lowering the cost of things is the best way to control inflation.
He went on to say that whereas personal loans are much more popular in other nations, the majority of loans in Bangladesh are taken out by big businesses, business associations, and corporate entities. Therefore, consumer loans are the main target of inflation control measures like interest rate hikes that are imposed overseas. But in Bangladesh, these policies raise the cost of production for companies, like bakeries, who have to pay more if they borrow money to make bread. All sectors see cost increases as a result, which discourages investment and restricts the creation of jobs. He cautioned that things are already getting worse and might get worse. Businesses are being meticulously destroyed…
