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Economists and jewellers on Friday called for reforming the government policy related to gold to ease its imports and help whiten the existing gold stock in the country.
The existing policy related to gold should be reformed to make it part of the country’s formal economy, they told a seminar on the financing challenges and actions in the development of the jewellery industry, marking the 'Bajus Fair-2024' that began on Friday. Bangladesh Jewellers' Samity (Bajus) organised the fair.
Biru Paksha Paul, former chief economist of the Bangladesh Bank, presented the keynote, where he pointed out that the problem lies in recognising jewellery as a formal industry.
Only 10 per cent of the gold is recycled, and the rest comes to the country through informal channels ‘which we don’t recognise,’ he said.
“To establish the jewellery industry as part of the formal economy, this existing policy reform is crucial,” he opined.
Source identification of gold stock is a major challenge for the banks to allow bank loans, said representatives of commercial banks at the seminar.
Salman F Rahman, private industry and investment advisor to Prime Minister Sheikh Hasina, addressed the event as the chief guest and termed the whitening of gold stock in the domestic market as the main challenge of the industry currently.
“What I have so far understood is that the main problem is to whiten the stock (gold). Once the stock becomes white, the other problems, like banking facilities (bank loans), get automatically solved,” he said.
If the government whitens the gold stock, then the government will get additional revenue, as with this, the informal economy of gold stock will come under the formal economy, he added.
As there are policy loopholes and gold stock remains in the informal economy, the government would extend policy support in this regard, the prime minister's advisor believed.
He also said SME financing could be an opportunity for small traders.
“The potential of this sector is huge, including for export,” he said, calling on the association to come forward with precise recommendations to get policy support.
An economics professor at Jahangirnagar University, Tabassum Zaman said that Bangladesh should allow the import of gold as there is no gold mine in the country.
Jasim Uddin, the chairman of Bengal Commercial Bank, who attended the event as special guest, called for working together with the NBR, the central bank and the commerce ministry to reform the gold policy to avoid any conflict among the regulators.
The speakers also acknowledged that local businessmen could not survive if the neighbouring country offered gold at a lower price. They also called for a VAT holiday.
There are about 40,000 small and large gold traders in the country, while there are only about 1,000 skilled goldsmiths in the country, they added.
Asif Ibrahim, chairman of Chittagong Stock Exchange; Nizam Chowdhury, chairman of Global Islami Bank; renowned bankers Shams Ul Islam; and Mohammad Nurul Amin, among others, spoke.
Sayem Sobhan Anvir, president of Bajus, presided over the seminar.