We have been suggesting few broad principles over the last year. And we are happy to see many of the things reflected on the broad planning. Thank you! Here are some additional points.
1. Increase the implementation rate. BD Govt. has for the first time in history has reduced the ADP year to year. Usually, it is set at higher point and adjusted lower at the end. The current government has also done that with the just finished year. Thanks to our laggard bureacracy, if not incompetent and unpatriotic. Now, take this challenge. For the first time in history, adjust the yearly budgetary allocation upwards - after making sure that you will be actually able to cross the line for the first time in history. Can you do that? How? If we were you, we would make a list of bureacrats who will be under constant watch. The message should be very clear to them. Work round the clock - forget sleep. Either achieve the goal or work so hard that you get sick and leave job for medical reasons!
2. Introduce incentives for foreign owned local enterprises to invest in R&D. The main target would be to give incentives for the companies to invest their money here, instead of repatriating dollars. The goal would be to netralize some of the reverse FDI. If a proper benchmark can be established, the incentives can be very generous. If one considers how much effort does it take to earn the dollars by our expatriate labours, the importance of restricting the reverse FDI should be fully appreciated. At the sametime, a careful consideration has to be made so that this effort to netralize some portion of the reverse FDI shouldn't adversely affect inward FDI.
3. In case of inward FDI, there should be incentives for joint venture initiatives so the industrialization can be balanced without making undue pressure on our long-term forex.
4. Make donations for education tax free, please. There might be some mishandling of this opportunity. However, its much better option. Lets see how much mishandle they can do... the degree of mishandling would dicate the policy correction within two three years down the road. But it should start now.
5. Many of the foreign owned organizations can start expanding some serive wing in Dhaka to serve their external counterparts. For example, GP call center can start providing call center support to other sister organizations that are owned by Telenor. If they do that, a balance will be achieved in FDI flow. Currently, the high volume of the FDI outflow will be compenstated by the portion of these FDI inflows by this type of service extensions. Now, if policy makers takes a heavy handed approach to this idea, that would back fire. Businesses will do everything, just you have to take them into confidence, let them have a say in the decision making process and do the changes progressively. In short, govt. can start this process by giving incentives. Even if govt. dont get any corporate tax for this branches, we would think them to be good steps since they will generate employment for the local youth and also, they will increase the inward FDI. Off course, the detail arrangement will have to be decided by the experts after reviewing more data. At this stage, this is only an idea. Any thoughts?
6. Allocate an amount for a facilitating body or foundation for the promotion of open source movement in the ICT sector. This initiative can be styled as a non-profit or social business type entity. The actual amount can be decided based on some percentage (0.5%) of the outward forex flow that is spent on software and service purchase.
7. Allocate an for a venture capital company with a very low interest rate - just for service charge. Just give away this money to some promising venture initiative who will utitilize the money as a start-up fund to support new technology based companies. According to international standards, this type of companies are usually for-profit company. The actual amount can be decided based on some percentage (0.1%) of the outward forex flow that is spent on technology based products purchase. BTW, this is not same as IT Equity and Entrepreneurship Fund which is proposed. The devil is in the details - traditional banks can't operate this fund, let alone the central bank. If that is the case, there won't be thousands of venture capital companies throughout the world.
8. Allocate an amount for a professional services company initiative that will use money build the local capacity so that local industries can take full advantage of the increasing carbon trading regimes. Again, this professional services company will probably get better results if its incorporated as for-profit company. The actual amount can be decided based on some percentage (1%) of the estimated potential inward forex flow from the carbon trading through participation in CDM. Do not mix up this with the proposed climate change fund. That is a disaster managment approach - which is important. This particular proposal is a proactive approach, which will create job, transfer technology and invigorate overall economy.
9. Its time we make the salary of the elected officials much more competitive. If we want to be a giant Signapore one day, we better start that process by paying the elected officials following the same principles that Singpore follows.
10. Last but not the least, the govt. should set aside at least 5% of its energy subsidy allocation to invest in renewable energy research, development, commercialization and marketing for obviouis reason. These subsidies can't go on forever if we have to come out of vicious cycle of poverty as a nation. However, government just shouldn't withdraw subsidy without using their brain (just like what donors where suggesting with the jute mills). At the moment, a major thrust should be set up a three component project on solar energy. First component will be about technology transfer arrangement with some German company to build a leading edge PV cell manufacturing plant, second component should try to develop local technology and capacity to combine the cells in solar panels (neutral to any specific PV technology) and the third component should aim to develop a business model and solutions that will allow the individual level solar farms to sell their extra capacity to the national grid. The third component is now being in operation in many areas in California. Its not very complicated and a well-thought out plan could help mitigate our problems with shortage in power grid.
For proposals 6-8, the actual figures can be adjusted as suitable. However, for all the three initiative, its important that the person behind these initiatives are capable and want to serve the societies. Ideally, these initiatives can be taken with private funding. But the quality of the capital-holders in our current society is such that they would hardly understand and/or be motivated to this kind of initiatives. Hence, government should provide the initial seed funding for these considering the immense potential that these initiatives can bring for the national economy going forward. If you really consider doing these, just do not allocate funding in the budget and let them sit idle somewhere in the exchecker. You will have to identify the correct person(s) who can actually bring these into reality. Why is that? - one might ask. If you do not know the answer to this why, you should not allocate the money at the first place, since most likely that money will either be stolen or misappropriated by someone who has good connections in the bureacracy! Then how would we know where to find the right person? Well, that is the burden of good governance and the burden of being a good policy maker.
Aro ekta side comment ase. Meyera naki emnite kom beton pai, compared with their male counterparts with same qualification. If that is the case, income tax holiday should be lower for the females, isn't it? :) Would the policy of upping ceiling of income tax for females have any affect in equalizing the gender gap? How? A better approach could be to reward those companies whose payroll has more balanced representation of both genders. No? Any thoughts?
Another side comment. Do you know that Brazil has ministry called Ministry of Strategic Affairs? You should know and Bangladesh should consider doing the same. As far as we understand, Bangladesh has four major strategic issues that she needs to clarify to the world community. If that can be done well, our road to a modern and developed country that will be contributing to the world affairs in a responsible manner should be a matter of time. Of those four strategic matters, one relates to a mega-project (no, we are not talking about Mega sea-port. That can be another one, which would bring the number to five). Stay tuned for an upcoming article with a proposal for a nation-wide mega-project, valuation of which would be greater than this budget! Also, we intend to write separate articles on the other three major strategic issues in coming days.