Rampant corruption is taking heavy toll on the country’s trade and business as it is a major roadblock to fresh entrepreneurs in Bangladesh, trade analysts expressed the concern at a report launching ceremony in the capital yesterday.
“Corruption has become almost inevitable even in getting a license for launching a new business in the country,” the function was told.
Trade analysts and business people also identified some challenges in doing business, which include difficulty in getting utility services, higher cost of lands or rental spaces as well as higher lending rate.
“Pervasiveness of corruption is shocking for us. Although some of the organisations are already automated, the corruption is not going down as yet,” said Syed Nasim Manzur, president of the Metropolitan Chamber of Commerce and Industry (MCCI).
He noted that the existing rental cost of a business space or land for setting up a new factory and higher lending rate is disappointing for a new entrepreneur.
He was addressing the launching ceremony of the survey report on “Overcoming Business Challenges in Bangladesh.”
Nasim underscored the need for identification of business potentials, SME definition and strengthening institutions to overcome the challenges in doing business in Bangladesh. “It is high time to introduce Alternative Dispute Resolution (ADR) for resolving business disputes as 95% of dispute are resolved through ADR in the developed countries.”
According to findings of the report, corruption is exceptionally high in Bangladesh as between 93.8% and 97.7% of the respondents had to pay bribes in getting theirtrade license, Tax Identification Number (TIN) or any other government services.
In the first year of business, about 94% entrepreneurs started business with theirown funds and made up an estimated 78.8% of the average firms’ funding portfolio, said the report.
The extreme concern identified in the survey is entrepreneurs’ overwhelming reliance on their own resources to start up and grow their business, said Daniel M. Sabet, team leader and former director, CES, ULAB.
Disclosing the report, Sabet said, “We’ve explored three broad types of strategies that entrepreneurs might take to overcome business challenges including strengthening the business institutions, using personal and professional networks, or simplifyinghardworkand relying more on entrepreneurial risks.”
Only a few firms have adopted more formal approaches to human resource management and there is considerable reliance on head-hunting firms, he added.
Four business challenges discovered by the survey are-access to financing, developing reliable forward and backward linkages, obtaining government permissions and services as well as hiring and developing effective human resources.
Findings from the survey indicate that employers express greater satisfaction with their employees than expected and rely less on family and friend networks than anticipated.
The University of Liberal Arts Bangladesh’s Center for Enterprise and Society in collaboration with MRB Bangladesh has published a comprehensive report on the strategies that entrepreneurs use to overcome the obstacles faced when setting up businesses in Bangladesh.
The survey report was based on the Overcoming Business Challenges Survey (OBCS) that also explored effective strategies leading to positive outcomes in the respective sectors.The survey was conducted over 536 CEOs and managing directors from small, medium, and large firms from real estate, information technology (IT), and furniture sector in 2013.