If we can double the textile production, the employment would increase by eighty percent in which case one out of every seven person in Bangladesh will benefit from this sector alone. At present no other industrial sector in the country has the potential of such high level of employment. Such an important scale of employment potential will have a positive impact on the government's poverty alleviation programme which is our most important thrust today. It will also markedly decrease crime, violence and anti-social activities, which are principally related to lack of employment opportunity. Further, increase of disposable income in the hand of a large section of the population will play a positive role in improving the healthcare, education and quality of life at the national level, which is our key objective.

Over seventy-five per cent of foreign exchange is earned by this sector. With a bit more positive support and encouragement from the government this level of foreign exchange earning will definitely improve. In a country short of power, textile sector generates over seventy-five per cent of its power needs. Its comparative dependence on the national power grid is small. Power supply, an important infrastructure, need not be burdened by the growth of textile industry.

Today Bangladesh occupies around 2.5 per cent of world exports contributing about USD5.5 billion from export earnings out of which our retention is around USD2.62 billion. To sustain this export level we need to inject around Tk.10,000 crore by the year 2007. Unfortunately both in the Textile and RMG sector investors are feeling insecure due to lack of a clear-cut long-term policy to support and encourage these vital sectors.

One wonders how we allocate priorities in preparing the budget correlating to income generating activities that provide direct and indirect benefits to the overall well being of the nation. Most exporting countries provide direct or indirect subsidy and support to encourage growth of the sectors important to them, based on their own macro level cost benefit analysis. In Bangladesh, unfortunately, some of our highest policy makers term it "spoon feeding" and curtail incentives and support without considering the overall negative impact to the national income generating scenario. Considering the direct and indirect positive impact of textile sector on the national economy, one wonders why incentive support of even 2000 crore was not considered for allocation, out of the national budget of Tk.64,000 crore. This represents just 3 per cent of the national budget.

On actual basis, disbursement of subsidy and support by the government directly or indirectly, has hardly exceeded over thousand crore in the past years. This was based on cash incentive of 25 percent which has been abruptly reduced to 5 percent. This lack of support, is one of the major reasons for drying up of further investment and creating uncertainty in the Textile, RMG and related sectors. Meanwhile normal business activities are being complicated and saddled with debates on Rules of Origin, SARC Cumulation, Bonded Warehouse and other such issues. There was no conflict of interest between BTMA and BGMEA when incentives were timely disbursed. With the delay and uncertainty in the matter and the ever hanging threat of "spoon feeding", the whole textile sector is now confused and uncertain about the future. Considering this environment it is believed that a minimum cash incentive of fifteen percent would be realistic and bring back confidence in this sector.

It is high time that our government wakes up to the realities, and spells out its policies clearly on a well defined time frame. Bangladesh is perhaps the most competitive country for textile production considering all factors. Whereas other countries are injecting incentives to their textile sector, we on the contrary are withdrawing it. This will make it difficult for our entrepreneurs to operate and survive in a highly competitive global arena.

Showkat Aziz Russell, Managing Director, Partex Holdings, is Executive Committee Member, Bangladesh Textile Mills Association.