Corruption, lack of transparency, and snail pace of file approval is preventing Bangladesh from achieving a better score in the ease of doing business index.
Every year, the World Bank (WB) creates a list of 190 countries based on business environment metrics.
In their last index, Bangladesh ranked 168th out of 190 in 2020.
In a recent webinar, Bangladesh Investment Development Authority (BIDA) Executive Chairman Sirajul Islam commented that by 2021, they projected Bangladesh to improve its position to 99th.
Unless businesses talk about improving the business situation, the World Bank will not update the list, he also said.
He also said BIDA has been working to improve Bangladesh’s ease of doing business ranking for three to four years through various initiatives.
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“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.
That foreign investor asked BIDA for a solution.
He thus stated that these unethical transactions are an obstacle to improving the ease of doing business.
New Zealand topped the rankings for four consecutive years, in 2017, 2018, 2019, and 2020.
Neighboring country, India tops the list in South Asia, as 63rd as of 2020.
Among South Asian countries, Bangladesh is ahead of only Afghanistan.
Bangladesh advanced 8 positions compared to the previous year. Singapore and Hong Kong are in second and third place respectively.
According to businesspeople, the main goal of business in Bangladesh 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.
They also highlighted that barriers to competitive business include corruption and a limited scope of financing.
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According to the Center for Policy Dialogue (CPD)’s Bangladesh Business Environment Study 2020 report, 75% of businesses found the central bank's monitoring of banks to be inadequate.
The report also noted that due to bureaucratic red-tape, policymakers need to focus on the availability and quality of government services.
They are indicative of transparency, accountability, and weakness in public services.
Furthermore, the report identified some administrative weaknesses in improving the business environment.
For instance, 49% of businesses said it was difficult to challenge the existing system, 84.3% mentioned that unofficial (bribery) transactions to get government services had increased, and 70% 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.
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Humayun Rashid, president and general secretary of the International Business Forum of Bangladesh (IBFB), said there are sectors where it takes 28 licenses to start a business. If each license application is pending for one month at the specified office, it will take 28 months.
Rashid added: “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.”
Hosne Ara Begum, executive director of Thengamara Mohila Sabuj Sangha (TMSS), said that the regulatory body thinks controlling is their task.
They do not pay attention to making business easier. The regulators do not listen to the problems in the field to do business, she also said.
CPD Distinguished Fellow Prof Mostafizur Rahman said that the Covid-19 situation has had a negative impact on the production, exports, imports and employment of various businesses.
Businesses earlier remarked that the country's business environment is not ready for the challenges ahead, he also said.
He suggests increasing policy support to address challenges and increasing public investment in research and development to grow the digital technology sector.
The government needs to take steps to create future markets, diversify products and exports, and increase domestic and foreign investment. To this end, it is necessary to focus on these four issues, he added.
