The economic prospect of the immediate future was highly uncertain as Bangladesh faced three major economic risks in the next two years, including inflation (33%), economic downturn (16.3%), and poverty and inequality (13.3), according to a survey published by Centre for Policy Dialogue (CPD) on Sunday.
But among all problematic factors for doing business in Bangladesh, the top five risk factors for the economy for the next two years were identified as inflation, extreme weather events (floods, heatwaves, etc) and pollution (air, water, soil), economic downturn, unemployment, and lack of economic opportunity.
The CPD survey also highlighted that corruption remained the biggest obstacle to doing business in Bangladesh, scoring 16.67% among 17 most problematic factors for doing business in Bangladesh.
The thinktank published the survey report on the day at an event titled “Reform in Bangladesh's Business Environment and Business Processes: Agenda for the Interim Government.”
The survey was carried out among the country's business community between April to July this year.
CPD Research Director Khondaker Golam Moazzem in his keynote presentation said: “During the tenure of the previous regime, Bangladesh's business environment saw limited progress as business activities remained concentrated within a few dominant groups.”
The survey report also stated that during the previous regime, the business environment in Bangladesh did not make considerable progress as businesses were largely concentrated within a limited number of groups.
The business environment in Bangladesh experienced a period of uncertainty during the Anti-Discrimination Students Movement, which continued even after August 5.
Moazzem also said: “We think corruption is always the main problem. However, the problem of inadequate infrastructure has gradually reduced. Inefficient bureaucracy has been another major factor over the years. Foreign exchange volatility has become a major factor in recent years. Inflation is always a major concern. Policy instability, on the other hand, can be characterized as a medium-level problem.”
“The absence of substantial reforms in policies, laws, institutions, and operations hinders the development of a participatory and competitive business environment,” he added.
Chief guest Prof Lutfey Siddiqi, chief adviser's special envoy for international affairs, said: “There is no reform commission for the private sector now. If proposals for such a reform commission come from trade bodies, we will discuss and work with the chief adviser to form one.”
The interim government was trying to cut down bureaucratic red tape that existed in several government departments.
"We are using the successful business environment improvement experiences of other nations as a guide. Businesses are welcome to contact us at any time to discuss their difficulties,” Prof Siddiqi further said.
“We need to change our system. The bureaucratic complexities of starting a business must be eliminated,” the special envoy to the chief adviser added.
CPD Executive Director Fahmida Khatun presided over the event and former FBCCI president Abdul Awal Mintoo, and other business representatives were present at the event.
Ranking, problematic factors
The CPD’s survey found that the position of the problematic factors evolved over time, but corruption was always the leading problematic factor.
The report found 17 most problematic factors for doing business in Bangladesh.
Those were corruption, inefficiency government bureaucracy, foreign currency stability, inflation, limited access to financing, inadequate infrastructure, policy instability, poor work ethic in the labor force, lack of educated labor force, high tax rates, complexity of tax regulations, climate change, crime and theft, insufficient capacity to innovate, government instability, poor public health, and restrictive labor regulations.
According to the Global Competitiveness Report, Bangladesh’s business competitiveness during the previous regime was among the weakest quarter of countries.
Bangladesh’s global ranking is always outside the top 100 except for a year (99 in 2017): ranking marginally improved during 2013-2017 period; but after that the ranking declined.
Despite its poor ranking, the country made marginal progress in its competitive ranking (in terms of weighted score); from 3.55 to 3.65.
Such a performance would have an adverse effect on business after the country graduates from LDC to a developing country in 2026.
Bangladesh’s business competitiveness is always behind that of India and Sri Lanka, the report stated.
But the country ranked better than Nepal and Pakistan, though there have been some dips.
Compared to other economies, Bangladesh did not improve its position.
The overall trend appears to be declining, with some minor recoveries.