Every year, the World Bank (WB) creates a list of 190 countries based on the business environment metrics and in their last index, out of the 190 countries, Bangladesh ranked 168th in 2020, advancing eight positions compared to the previous year even if the country is ahead of only Afghanistan among South Asian countries while neighbouring India tops the list in South Asia, at 63rd position, as of 2020.
At number one position is New Zealand, which topped the rankings for four consecutive years- 2017, 2018, 2019, and 2020.
Although Bangladesh has made good progress from last year, the ease of doing business still remains a difficult proposition even if the country is making rapid socio-economic progress lately.
Issues related to corruption, lack of transparency, and snail’s pace of file approval, many say, is preventing Bangladesh from achieving a better score in the ease of doing business index even as the Executive Chairman of the Bangladesh Investment Development Authority (BIDA) Sirajul Islam underlined that Bangladesh will not be able to rank below 100 in the World Bank’s ease of doing business ranking in 2021 as predefined by the Government.
According to the businesspeople in the country, the main goal of business is to reduce costs and increase productivity. However, businesses have to deal with problems of infrastructural shortfalls, the death of educated and skilled workers, and high tax rates even if there remain several other barriers to competitive business including corruption and limited scope of financing.
According to the Center for Policy Dialogue (CPD)’s Bangladesh Business Environment Study 2020 report, 75 per cent of businesses found the central bank’s (Bangladesh Bank) monitoring of banks to be inadequate even if the report also noted that due to bureaucratic red-tape, policymakers need to focus on the availability and quality of Government services while adding that they are indicative of transparency, accountability and weakness in public services.
The report also identified some administrative weaknesses in improving the business environment; for instance, 49 per cent of businesses said it was difficult to challenge the existing system, 84.3 per cent mentioned that unofficial (bribery) transactions to get Government services had increased, and 70 per cent said judicial systems were capable of being influenced.
It also mentioned a lack of corporate ethics in Government institutions, illegal transfer of Government funds, and inefficiency of judicial systems in resolving business disputes, combine to make things even more difficult at the businesses’ front.
Meanwhile, according to the President and General Secretary of the International Business Forum of Bangladesh (IBFB) Humayun Rashid, there are sectors where it takes 28 licenses to start a business and if each license application is pending for one month at the specified office, it will take 28 months just to complete the licensing process only.
“To encourage the private sector, the Government needs to take steps to increase public investment in research and development. To create future markets, they need to diversify products and exports and increase domestic and foreign investment,” Rashid underlined further.
The IBFB is a research and advocacy based non-profit and non-partisan nationwide business forum that works as a bridge between the private sector stakeholders and decision makers in the Government even as it strives for identifying common business challenges, conducting advocacy through dialogues, participatory workshops, seminars, symposium etc., and pursuing specific and actionable recommendations to mitigate business and economic barriers and thus create a business-friendly environment to ensure transparency, good governance and sustainable economic growth in the country.
Already in the cusp of making the much-awaited graduation from an LDC to a developing nation which will come with its own share of challenges, in such a scenario foreign investment — FDI is a much-talked about topic in the garment and textile sector, which is the major foreign currency earner for the country and the lifeline of its economy, as they look to move up the value chain and make value-added products to maintain the competitive edge in the international market — would take a hit.
“The country needs to enhance its ability to absorb investment from local and abroad. In the competitive environment, it is a big challenge for us and we have to think about how we are taking the challenge,” underlined the former Ambassador and Vice-President of the Bangladesh Enterprise Institute Humayun Kabir while the Vice-President of IBFB, MS Siddiqui on his part stated, that Bangladesh needs to sign the World Trade Organization’s trade facilitation agreement to make cross-border trade paperless, contactless and faceless.
It is linked with the World Bank’s two indicators stipulated earlier like paying taxes, trading across borders under the broader aspect of dealing with day-to-day operations, he said.
Established in October 2000, Bangladesh Enterprise Institute is a non-profit, non-political research centre with a reputation for excellence in its research and advocacy work focusing on the growth of private enterprise in Bangladesh.
Admitting to indulgence in bribery by some corrupt officials, the Executive Chairman at BIDA reportedly said that in Bangladesh, bribes are also demanded from foreign businesses, even as he exhorted businesses to contact BIDA in such a scenario.
“A few days ago, a foreign investor complained to me that he had been unjustly asked for money. Taxes have also been demanded for untaxable things for refusing to pay under the table,” he recalled while adding unethical transactions are an obstacle to improving the ease of doing business.
If anyone makes an illegal demand to you, come to us; we will take action, assured Sirajul while adding that only reforms are not enough to ensure an improvement in the ease of doing business index as the World Bank will conduct a survey on business entrepreneurs before preparing its report even as Dr. Md Abdul Mazid, the former Secretary and Chairman of the National Board of Revenue (NBR) said BIDA was established to facilitate private investment in the country and so they do not need to work only for foreign investment, rather work for all kinds of local and foreign investments even as he called upon BIDA to conduct survey to find out on how many files are pending in the Deputy Commissioners’ offices and Registrar of Joint-Stock offices and fix those.
Meanwhile, in reference to the Chittagong Port, which handles bulk of Bangladesh’s imports and exports including import consignments (raw materials) for the RMG sector and all-important shipments of ‘Made in Bangladesh’ apparel items to world-over, experts underlined that despite several initiatives taken to reduce congestion at the port, Bangladeshi traders have to pay almost triple the amount that ports in other countries charge
They maintained that it costs roughly Taka 72,000 for each mutation in Bangladesh although the fixed rate is only around Taka 1,100 even if Rear Admiral M Shahjahan (the Chairman of the Chittagong Port Authority-CPA), on his part said, “It (Chittagong Port) is the cheapest in South Asia. It also ranked 58th in the world in 2020. Chittagong Port was placed 98th in 2019 and the rank reflects what we are doing. So, it is not true that our port service is costlier.”
Considering the facts and figures as well as views expressed by the experts, it would perhaps not be wrong to underline that despite the rapid progress made over the years in every sphere, Bangladesh is yet to reach the desirable levels of ease of doing business and all the stakeholders need to join hands and put joint efforts to improve the overall scenario in this direction.