Coordination key to achieving implementation target

Like always, investors and experts apprehend that there will be challenges in implementing the new industrial policy to achieve maximum benefits due to a lack of ownership and coordination among line ministries and various stakeholders.

The new policy aims to increase the industrial sector's contribution to the country's gross domestic product (GDP) to 40 per cent from 35 per cent within the next five years.

The industries ministry had issued a gazette notification in this regard on September 29, highlighting the need to develop skilled manpower, increase productivity and employment to expand the sector's GDP contribution by 5 per cent within 2027.

Abul Kashem Khan, former chairperson of Business Initiative Leading Development (BUILD), said no industrial policy has achieved its target due to the lack of efficiency and cooperation in implementation.

Almost all former policies were pro-industrialisation and despite the government's good intention, they faced problems in implementation each time.

"I have seen severe lacking in coordination among the implementing government entities as well as conflict among different policies related to business and industrialisation," he added.

Khan suggested formulating all polices, including that of export and investment, in accordance with the industrial policy as it is the mother of all polices related to business.

The former BUILD chairperson then said that frequent policy changes by the National Board of Revenue (NBR) is a major roadblock for attracting foreign direct investment and increasing industrialisation.

He alleged that NBR officials always try to harass taxpayers instead of cooperating with them, which is counterintuitive for growing the government's revenue.

Besides, investors do not even get utility connections on time while unstable energy prices increase their production costs, discouraging long-term investments in the process, Khan added.

However, he believes the new industrial policy will be easy to implement if the government addresses these bottlenecks.

Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, said the new policy has made some improvements as an action plan for implementation has been incorporated along with a detailed explanation on industry clusters.

Previous industrial policies failed to achieve their targets as the line ministries did not take ownership of their implementation.

"For this reason, the earlier polices could not be implemented properly and failed to achieve the target, and the same could be expected of this policy also," he added.

Moazzem suggested forming a monitoring strategy to evaluate the implementation status every six months and place a report to the implementation committee.

In addition, the industries ministry should formulate a guideline for other stakeholders to implement the policy.

Moazzem found conflict between the new policy and Bangladesh Bank's framework for financing woman entrepreneurs. The central bank policy mentions reserving 5 per cent of loans for women while the industrial policy wants to provide them with 25 per cent of the total fund for industrial loans.

Sheikh Faezul Amin, additional secretary (policy, law and international cooperation) of the industries ministry, told The Daily Star that they have formulated an action plan to implement the policy.

Under the action plan, they will create awareness among entrepreneurs, other public stakeholders and line ministries to comply with the policy.

"We will coordinate with other ministries and divisions that are involved in implementing the policy to avoid any conflict," he said, adding that stakeholders will be consulted if there is any need to revise it.

"Also, we will inform high-level committees headed by the prime minister, industries minister, and secretary for industry regarding any conflict with other policies," Amin said.

He sought cooperation from investors and government stakeholders in implementing the policy.

The policy set a target to develop the country's socio-economic condition as well through inclusive growth with sustainable and eco-friendly industrialisation.

It also aims to develop a strong foundation for the domestic light engineering sector through the adoption of sustainable and sophisticated technology.

Product diversification of potential export items and capacity building in the industrial sector are needed to face the challenges of LDC graduation and so, these two aspects will get special attention.

The new policy also places importance on the IT sector in order to help related industries improve their efficiency and productivity.

The first Industry and Investment Policy was formulated in 1973 and then revised in 1975. An industrial policy was formulated in 1982, removing the word "investment" from its title. Since then the industrial policy has been formulated nine times with amendments.

The policy, which will be valid until 2027, will give priority to small and medium enterprises in order to generate huge employment opportunities and ensure higher growth.

In regards to the issue of environmental conservation, the industrial policy emphasised on ensuring the establishment of factories in designated areas.

Considered as a potential sector for resolving the unemployment problem, the policy emphasised on developing cottage, micro, small and medium enterprises (CMSMEs) as this sector has been playing a significant role in achieving economic growth and earning foreign currency by encouraging and expanding business activities.

And like previous editions, the new policy focuses on product diversification, skills development, policy reforms, private sector-led economic transformation, technology adaptation, and adequate training.

Besides, a clause was kept to ensure that 15 per cent of the plots at various economic zones, export processing zones and hi-tech parks are reserved for women entrepreneurs.

Similarly, 25 per cent of the total loan allocation for the SME sector will be kept in favour of women entrepreneurs, including coverage of the SME Foundation, while the Bangladesh Small and Cottage Industries Corporation will work to expand the market for their products.

In view to implement the policy, the ministry will organise a countrywide awareness programme to ensure innovation and protect intellectual property rights in line with the Trade Related Aspects of Intellectual Property Rights (TRIPS).

In addition, initiatives will be taken to incentivize the production of import substitute products.

The government will also provide stimulus incentives for big foreign investors who will shift their industries to Bangladesh.