The country's apex trade body yesterday called upon the government to cut costs of its development projects in different sectors to help contain borrowing from the banking sector.

The government is borrowing heavily from banks to implement different projects creating a liquidity crisis in the banking sector, said AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), at the Federation Bhaban in Dhaka.

This heavy borrowing will put a pressure on the inflow of capital in the private sector for investment as the banking sector is grappled with a severe liquidity crisis, said Azad.

The FBCCI chief also feared a rising inflation due to higher bank borrowing and higher cost of the dollar against the local currency.

In this situation, if the flow of capital to the private sector for investment goes down, job creation would be tougher, he added.

On December 12, the amount of government's borrowing was Tk 16,848 crore of which Tk 10,365 crore was from the central bank. The government also plans to borrow Tk 20,000 crore further in the current fiscal year.

Azad also urged the government to implement the proposed 11 special economic zones (SEZs) so small and medium enterprises can grow with special attention from the government in the SEZs.

“The SME sector is suffering from different problems despite having immense potential. Many countries progressed economically by developing their SME sector,” he said.

Azad was briefing journalists at a press conference on the upcoming fifth SME Fair-2011 to be organised by the FBCCI.

The five-day show will kick off on December 20 at Bangabandhu International Conference Centre in Dhaka.

This year the fair with the slogan -- SMEs and the nation growing together -- will showcase locally made products ranging from agro-based industrial goods, light engineering, refrigerators, fisheries, seeds, furniture, handicrafts, leather and leather goods, fabrics and household appliances.

A total of 64 companies and 34 banks will come up with their products and services at 131 stalls and 19 pavilions. Prime Minister Sheikh Hasina is expected to inaugurate the fair as the chief guest, Azad said.

At the show, the SME Foundation will award entrepreneurs in recognition of their contribution to the sector.

Different seminars focusing the SME industries in Bangladesh will be held on the sidelines of the fair, which will remain open for all from 10am to 8pm free of cost.

The Daily Star/ Bangladesh/ 18th Dec 2011