The ICC Global Survey 2009 confirms an overall decrease in volume and value of trade in recent period, Bangladesh Bank Governor Dr. Atiur Rahman said this on Saturday, while he was speaking as the Chief Guest in a Dialogue on ‘Rethinking Trade Finance 2009: An ICC Global Survey organized by International Chamber of Commerce (ICC) Bangladesh.

ICCB President Mahbubur Rahman Chaired the Dialogue. In his introductory speech ICCB President said that with the present turmoil in the world financial market this Global Survey Report on Trade Finance would provide our bankers and other stakeholders with some basic data and useful information for their strategic planning in conducting their foreign trade. The study confirms the anecdotal evidence gathered over the past few months, that the financial problems are now impacting trade as a whole.

ICCB President added that as mentioned in the survey, the outlook for 2009 is negative. International trade is forecast to continue deteriorating in 2009. The collapse in global demand may have long term effects and economies will slowly recover after 2010.

ICCB President observed that maintaining and enhancing trade openness is key, not only to preserve the mutual benefits of trade, but also to support the eventual economic recovery. External competitiveness and access to international markets are of paramount importance for poor countries, enabling them to realize the development promise of international trade. Pressing ahead with trade openness is a powerful means for developing countries to help mitigate the financial crisis and realize the development advantages flowing from international, trade he added.

ICCB President also said that the ICC Survey has reconfirmed that the current crisis has severely affected financial institutions and markets worldwide. This is a challenging economic environment, and trade volumes may be further impacted in the coming months. On a global basis, the respondents foresee that different regions will experience economic slowdowns in 2009 in various degrees. The predictions for 2010 remain cautious; many predict that the economic turmoil will continue to predominate, Mahbubur Rahman added

He opined that it will remain important to maintain support and liberal financing for SMEs. Despite the serious impact of the financial crisis, countries must continue to trade. The availability of trade finance is critical to the sustenance of emerging markets, but especially for small- to medium-sized enterprises relying on short-term trade finance. It has been unfortunate that many banks in the last decade have moved away from trade finance services; which are labor and skill
intensive, to focus on investment banking, where greater rewards were available, he observed. In the Bangladesh context, we must make more vigorous effort in withstanding the Challenge and try to address areas of our concern like, expatriate remittance, export growth and job creation. Boosting up the local economy through qualitative public spending is now a major challenge for the government to create new jobs. As time for national budget is also in the horizon, the Annual Development Plan should incorporate programme to offset global shock. Investment in bottleneck areas especially in power generation and gas exploration should be the top priority and ensuring social safety net should also be adhered to. Stimulus packages for the private se3ctor are required to spur investment and thus create much needed employment observed ICCB President Mahbubur Rahman. He emphasized the need for becoming extremely careful and cautious in term of the global trade scenario.

Bangladesh Bank Governor assured to take appropriate measures on the comments and suggestions made by the panelists took part in the Dialogue. He made a comment that the International Trade is an engine of growth and development while finance of international trade plays the role of lubricant for that engine. He added that the ICC survey attributes increased risk perception and tight credit conditions as major threats to the access to trade finance. 51% of the respondent reported decrease in credit lines between 2007 and 2008, while 48% of them reported demand for an increase in issuance of bank undertaking.

Governor Atiur Rahman also disclosed that considering the potential fallout of global economic recession through our external sector, Bangladesh Bank in coordination with government has given top priority to preempt any adverse consequences. He added that Bangladesh Bank undertook substantial reforms to boost up the flow of remittances through the banking channel. In 2008 inward remittances amounted to US $ 9 billion. He expected that it may reach US $ 9.5 billion providing stronger cushion to the current account balance and current exchange rate stability. In the backdrop of the current financial meltdown the governor emphasized the need for quality of public expenditure and public private partnership.

Earlier the ICC global survey report was presented by Vincent O’Brien, Member of ICC Banking Commission, Paris. Executive Director CPD Dr. Mustafizur Rahman, Vice Chairman, Bangladesh Association of Banks Muhammad A. (Rumee) Ali, Chief Executive Officer, BFTI Prof. M.A. Taslim, Former Ambassador and Permanent Representative to the UN Offices in Geneva and WTO Dr. Toufiq Ali, Chairman, Policy Research Institute of Bangladesh, Dr. Zaidi Sattar and Chairman, ICCB Standing Committee on Banking Technique and Practices Mamun Rashid took part in the Dialogue as panel discussants.