Former Vice-Chancellor of Jahangirnagar University and eminent economist Prof. Abdul Bayes thinks that the interim government should allow the industrial establishments to use the necessary funds for the production, supply and import and market stability of the employees.
He said these things in an exclusive interview given to multimedia news portal Bart24.com. Professor Bayes believes that the recent attacks, arson and looting of many industrial establishments in the country will have a negative impact on the overall economy.
The senior economist talked about the current issues of the country's economy - industrial production and foreign investment in the fragile law and order situation of the country.
Barta24.com: Majority of the country's import sector is still dependent on large importing companies. What steps should the government take with large importers to stabilize the market? Do they have any options?
Prof. Abdul Bayes: They have no choice yet. Government's policy should be 'Business should not be punished, businessman should be punished'. If someone does wrong, punish him but why should his factory or production be burnt.... Take for example 'S. Alam'. The company is a major importer of many essential commodities. Their accounts should not be frozen by organizations that engage in these services and pay many workers. They should be allowed to continue. Yes, it should be monitored whether the businessman is smuggling money or buying flats. How much their factory cost, how much the salary of the workers, how much will be required for import, how much is needed for supervision, they should be given the opportunity to use that fund because the importer is not replaced. Import experience required. Understand the market. They have all the setups in the country and abroad. So they have to take indirect measures instead of direct attack so that there is no impact on the business.
Barta24.com: Due to the political change, the large importers of the country are under the fire of the government, the complications created in the import sector and the desired daily products are not coming, the market is gradually unstable - this is the claim of many in the wholesale market. What should the government do to keep the flow of goods in the market normal and prices under control?
Prof. Abdul Bayes: To me, the main reason is not that the government is against the importers. Import cost and dollar crisis, LC restriking - these are there. The biggest reason is that our internal market management is a total failure. There is no effective supervision-monitoring-punishment-reward in this regard. Our punishment for criminal offenses is negligible. We have to look at two aspects of the market. One is the demand side; the other is the supply side. The prices of the goods we import go up because of the dollar crisis. The price of the product increases because the supply chain is not right. Costs rise when prices rise. Now the policy taken by the government is demand management. Bangladesh Bank is increasing the policy interest rate. It's a very good policy but how far will it go? Not more than 6 months. No one can take a loan with so much interest when your growth slows down. These factors will affect growth and employment. This policy should have been taken much earlier. The previous governor did not take it, the current governor is taking it is a good step. But they expect the price of goods to decrease after 6 months. Then the interest rate will be reduced again. Then investment will increase again. But this market cannot be controlled now. The students tried something with the people of the society but again the old syndicate mentality is re-emerging. Those who used to take subscriptions are now sitting in that place. As for bringing various products from Benapole, subscriptions were still to be paid from place to place. So if the governance is not fixed then the market will not be fixed. The price of goods will not decrease.
Barta24.com: In recent times, the country's big entrepreneurs and their factories and houses have been victims of terrorism. In this way, production and supply have been stopped in many companies. With the impact on the market, the livelihood of a large number of employees of the organizations has also come under extreme uncertainty. What kind of impact can it have on the macro economy?
Prof. Abdul Bayes: There will be a very bad effect. It cannot be addressed that I burnt-looted the industrialist or his industrial factory...it is not a solution. If the owner of that industry has committed any wrongdoing, has not returned the loan; if he is an accomplice of fascism, there are laws against him. But in this way various institutions including Gazi Tire Factory are being attacked and vandalized. Law and order situation is more important than commodity prices. Fascism or dictatorship is also often preferred by people because they provide a degree of stability; At one point it cannot hold in various equations. We are happy when military rule comes, because the law and order situation is cool. But this government is not able to cool it down. We respect them but it is true that the last two months have passed, but the law and order situation is very bad. Everything including the price of goods depends on this law and order situation. Extortion-bullying is going on everywhere. What is going on in the garment factory? The owner always gains, the owner never loses. What is lost is part of the gain. Earlier 20 percent profit is now 10 percent. But what is the cause of this ongoing unrest in factories? I do not understand who will control them, how will this government do it? The education sector is in a bad state. If someone bullies... This is rocker should be strict about these things.
Barta24.com: How do you see the steps taken by the interim government to stabilize the banking sector?
Prof. Abdul Bayes: So far so good...what he did well. It was supposed to do that. Can't take the bank to Gun Point. Getting weak banks out of liquidity crunch, not spending dollars from reserves, not printing new money - these are very good steps. I have written about these issues in newspapers at various times. At that time, the government or those concerned did not listen. The current government is very satisfied with the World Bank IMF loan. But these loans will expire at some point. The World Bank-IMF will not give any more money. For now: Ointment should be applied to the wound. Applying that ointment. The answer to your question about the banking sector is - so far so good on right track.
Barta24.com: The chief adviser of the interim government. It has been reported that Muhammad Yunus attended the United Nations General Assembly and met with the representatives of various countries and received the assurance of 7 billion dollars in loan assistance. China has also promised support. But what is your assessment of the ongoing debate on the global debt trap and the honest question?
Prof. Abdul Bayes: All loans have pitfalls if they cannot be used properly. Be it micro loans or SME or large loans. Before that, there are billions of dollars in the pipeline from the previous fifteen years. If you have a good project, you can increase the dollar by bringing it. What is our absorbing capacity? Can you fund the utility dose? Awami League did not take less loans during the period. Took a lot of debt. Still we are not satisfied. Awami League has wasted and misused. The same applies to this loan at present. The loan will be given. Lobbyists from countries like China and America sit in Dhaka to give loans. How will the loan be paid? Finance adviser Wahiduddin Mahmud said 'giving money with open hands' but as an economist he should understand that many people want to give loans with open hands. It is their business. They will get interest, principal amount etc. Now, since Dr. Yunus has a link with different countries of the world, some resources will be diverted. My main question is where do we spend this 7 billion dollars? Which project to invest in? There is money in the pipeline, I just can't use it. It's good if you get 7 billion investments, but do you have to use it? They will not give the money. It is being said about reforms in the banking sector, financial sector. It should be known that they will take 80 percent in the name of consultancy. 20 percent will be here. This has been going on forever. So getting loans, getting loans...whatever government comes will get loans. Even if BNP comes in front, you will see that everyone will raise their hands and say, how can we help?
Barta24.com: But if the socio-economic situation inside the country is not good, what are the possibilities of foreign investment?
Prof. Abdul Bayes: When various indicators of the previous government were going down, the foreign aid agencies were very silent. Now they are a little more motivated. But neither they nor we should forget that this is an interim government. It has some power' is more like routine work. Some will reform. They can't do it for the whole organization either. Ultimately we have to go back to politics. Politicians will utilize these 7 billion dollars. They do not have the legal right to spend these things. All in all, it is important to finish the reforms quickly and how to hold elections. Bad democracy is better than no democracy.