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Bangladesh: High bank interest and lack of infrastructural facilities hinders industrial development’

• By  Textile Excellence
• June 12, 2014

Md. Harun- Ur Rashid, Chairman and Managing Director of Asian Group, is a seasoned businessman, who, over the years, has expanded his portfolio to Asian Textiles Mills Limited, Asian Fabrics Mills Limited, Asain Specialized Textiles Mills Limited. In an interview with Textile Excellence, he talks about his vision for the Bangladesh textile and clothing industry.

What hampers industrialization in Bangladesh?

The excessive burden of bank interest and the lack of infrastructural facilities are the main hindrances to industrial development in Bangladesh. We had expected that the government will bring down the rate of interest that has not happened. Our bank interest rate is the highest in the world, and needs to be brought down to single digit level. Gas shortage over the years has hurt industrial production severely. Political instability, labour unrest, and many other factors resulted in our export orders shifting to Vietnam and other countries. The reality is that buyers choose us because we made goods at the lowest cost.  If the political situation is stable, buyers will come to us. The violence riddled political culture requires change.  Many small factories have already closed down.

You are always very vocal about Hundi. What is the reason?

Recently I was in Singapore and was asked to raise the issue of Hundi. I requested the government to introduce incentives for the money to be channelized into legal channels like banking. If we receive money through banking channel our foreign currency reserve will be US$ 50 billion. In Hundi, people are deprived and we do not get proper remittance. 

What are the current hindrances in the industry sector?

The law and order situation is not good. Transportation has developed, but not to the extent needed. Crime is still quite high. Illegal drug trade is very high, this is ruining our youth. We have to secure our borders with Myanmar and India to make our nation free from drug abuse otherwise our younger generation will be totally ruined.  If possible there should be a joint force of operation to contain the drug menace.

What is your suggestion for the RMG sector?

Readymade garments sector is the lifeline of Bangladesh, employing over 50 lakh people. If this sector does not perform well, it will directly impact the economy of the country. Our commerce minister is very efficient and hopefully he will manage to get GSP from USA, as both Accord and Alliance are working aggressively here. Infrastructure is a major bottleneck and requires massive investments. The government is making visible efforts to ease the gas and electricity situation. This government is pro-people and has implemented many effective projects. The industry enjoys tax holidays and other tax benefits, but needs a bit more of policy support to ensure smooth functioning and growth.                     

Textile Excellence