‘Govt. tries to create a balance among all the parties’
Salman Fazlur Rahman, prominently known as Salman F Rahman, MP, is the private industry and investment advisor to the prime minister of Bangladesh. He is also a Bangladeshi industrialist and philanthropist. He is the co-founder and vice chairman of Beximco Group, one of the largest business conglomerates in Bangladesh and a pioneer of Bangladesh’s industrialisation.
Recently, he gave an exclusive interview to the News Portal and spoke on a wide range of issues. Salman F Rahman has seen the economy from both sides — first as a business leader and then as a top policymaker for the government. He said there are certain issues that the government needs to consider which business people do not understand. He also shed light on economic recovery, the capital market, rising unemployment, and Bangladesh’s low tax-GDP ratio.
Here are the excerpts of the interview:
After the initial shock of the Covid-19 pandemic, the economy has started recovering. When do you think will Bangladesh be able to return to normalcy?
Salman F Rahman (SFR): I think we are doing quite well and believe that the economy will return to pre-Covid situation very soon. The vaccination programme has begun successfully. You can see the new infection and death rates have decreased significantly. So, the impacts of Covid-19 pandemic have started to weaken and at this rate, the economy will get back to normalcy soon.
You have seen the economy from two fronts – first as a business leader and then as a policymaker. How are those two roles different?
SFR: When I was a leader of different business organisations of the private sector, my main motto was to raise voice for the rights of the businessmen. Now, when I sit on the other side of the table, the situation is different.
There are certain issues that the government needs to consider which the businessmen do not understand. Or sometimes, even if they understand, they naturally try to get as much possible from the government. When I was a business leader, I did the same.
Also, there are conflicts of interest. Exporters want a policy in a way, importers want another way, while businesses operating in domestic market demand something completely different. The government cannot make everyone happy; it only tries to create a balance among all the parties.
So, in the private sector we can take decision independently but when in the government, your hands are tied. Businesses often blame the government for slow work process, bureaucratic tangle and others. But in reality, the government cannot do anything without following the rules. So, maintaining the balance is very important.
One key issue is, if the government wants to run smoothly, it needs to raise the tax income. Our revenue to GDP ratio is the lowest in South Asia and we need to expand the tax net. Good news is that recently, the NBR said some 50,000 new entities have been enlisted as new taxpayers, which will increase revenue collection.
Do you think Bangladesh needs to reform existing laws to facilitate the private sector?
SFR: In most cases, I definitely think it needs to be updated. There are some laws that exist from the colonial period. We need to change the mindset that if the government relaxes any law, the businesses will take advantage and engage in corruption. Earlier, there was a complexity in our mindset because we were heavily dependent on foreign aid; now the situation has completely changed. We need to change ourselves with the flow. And we have to do it collectively as a society, not only as businessmen or as the government.
The economy is growing rapidly, but the number of unemployed educated youths is rising at the same time. What is your observation on the matter?
SFR: I do not agree with this. The problem lies with the education system. During harvesting season, it is difficult to find workers in many villages. Similarly, many other sectors, including garments, also face the same problem of not getting the right people. So, one cannot generalise that there is an unemployment problem in the country.
The problem is people who have graduated are facing a hard time getting jobs. What is the percentage of this youth compared to the entire population? I would say the problem is: we don’t give enough emphasis on technical education. In other countries, you won’t find such large number of youths going for higher education.
The government, under the leadership of the prime minister, is creating an enabling environment for freelancers in the country. If you are educated and cannot find a job, you can work as a freelancer — even from a remote village — with the availability of the internet. So, the bunch of youths you claim to be unemployed can take this advantage.
Why are the big corporate groups reluctant to get listed in the stock market despite 10% tax benefit?
SFR: Lack of institutional support is one of the major reasons for companies not coming to the stock market. Also, the mutual funds did not bring the desired result. If a stock market relies on individual investors, it is not encouraging for the companies. The securities regulator is changing some policies to address the problem.
Another problem is that our market is equity-based. Other components of the stock market, such as bonds, are not vibrant. When big companies think of the depth of our stock market, they get doubtful. Good thing is that some big companies like Robi and Walton have got listed in the market in recent months.
Money is cheaper than ever and lending rates are at a historic low. Why are the businesses still unwilling to take loans?
SFR: It was due to the pandemic. It is normal as businesses are not expanding. When we get back to normalcy, the situation will change. Now there is no one availing loans, but maybe after three months, there will be a cash crunch. So, it is a cycle and I am not worried about it.