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Why must private sector take the blame?
1/23/2006
Any sensible person, on surveying the conditions in the private sector in Bangladesh, would realise that the monetary and fiscal policies of the country are yet to be geared up adequately in the interest of its development under the private sector.
During the last elected government, the government borrowed recklessly from the banks and the public through bonds. This widened the fiscal deficit and attempts to achieve better fiscal and monetary discipline were not seen.
The private sector suffered from shortage of funds to take on entrepreneurial activities while precious resources were diverted to unproductive administrative expenditures of the government.
Policies were not operative in a systematic fashion to channel funds to the private sector to stimulate it. In many countries, the entrepreneurs are allowed the vital level playing field. They are not spoon-fed but government policies at least try to keep them competitive. This means that they are given vital supports in areas where they deserve such supports.
But our entrepreneurs here are sweepingly or blatantly accused of defaulting on loans when the government's corporations and the state owned enterprises (SOEs) under them are the worst defaulters in their payments. Why then the private sector entrepreneurs are singled out for blame? Law, to be fair, should apply equally to all.
Government officials get promoted though the bodies they serve are too burdened with debts not repaid whereas private sector entrepreneurs are dragged to court in many cases for defaulting on loans due to adverse business conditions and no fault or lack of intention on their part to repay loans.
Allegations are too frequently heard that entrepreneurs take money from the banking system not to return the same.
But where is the environment for the entrepreneurs in many cases to successfully engage in business, make a good enough profit and return the money with interest?
First of all, the interest rates charged on loans are unrealistically high. Entrepreneurs are plagued by regular extortion activities, insecurity, skewed tariffs that help the sale of imported products and not their domestic equivalents, insufficient and unreliable power supply, poor infrastructure, bad port conditions, etc.
Therefore, an enabling environment must be created first for the entrepreneurs. They are not to be always made the whipping boys, unfairly. Only mud slinging targeting them will not help. The law should apply equally to civil servants and the entrepreneurs alike for real lapses. Only then, there will be respect for law and the pressure created for everybody to abide by the law.
Murad Reza
Eskaton,
Dhaka
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