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How to be pro-business

  • Published at 07:23 pm March 20th, 2014
How to be pro-business

It is a common complaint in Bangladesh that the parliament is made up of businessmen and that their rise to positions of power in the political world has created a government that is beholden to business interests. If only.

I agree that it is important that big business not exert undue pressure and influence on the polity to the detriment of the national interest, but in reality I see little evidence for this fear.

Frankly, I can think of few places in the world where it is so frustrating and thankless to do business and where the government has done less to ensure and protect the business climate and the well-being of the business community.

And this goes for every government we have had in Bangladesh, even the ones which made a big noise about the transformative powers of private enterprise, by which we have come to mean state-supported private enterprise.

For all our putative market-orientation, Bangladesh remains an officious rule-bound bureaucracy where the government delights in placing obstacles in the path of growth and development and remains allergic to innovative and creative thinking. That remains the problem, regardless of what our policy orientation is supposed to be.

Like they say, if you’re going to play the game, then you got to learn to play it right.

It is not just the dull and torpid thinking and shambles of regulations and policies that are ill-suited to the current times at best, utterly paralysing at worst, it is also how little has been done to ease the business environment, how little real effective planning has gone into creating a functional, dynamic economy or at the very least in creating a conducive environment for it.

At every level, Bangladesh remains a notably challenging country in which to conduct business, with pitfalls for the unwary round every corner.

From enforcement of laws to enforcement of contracts, electricity supply to supply chains, red-tape to turn-around times, I haven’t noticed the government do much for big business, or small, for that matter.

If businessmen have bought the government, I have to say they have received a pretty poor pay-off from their investment.

Nor has any government’s long-term planning really focused much about what to do to encourage new business and industry, beyond piece-meal projects that offer incremental benefit but lack the big picture vision that we need.

Much less has any government ever considered how we can nurture and develop the creativity and innovative thinking we will need to move forward in the 21st century.

Take the RMG industry.

For all the talk of garment factory owners now dominating public life, what has the government actually done to ease the burden on the manufacturers?

Equally crucially, has it ever offered a better location than the current environs of Dhaka where the industry is currently housed in conditions that are advantageous to no one?

This should have been done a long time ago. The government should have set up industrial parks, special economic zones, export corridors, pick the vehicle of your choice, and moved the 4 million strong industry out of Dhaka and its surrounding areas decades ago.

Now, with two brand-led stakeholder safety initiatives, the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety on the ground and the closure of some factories a looming reality, it is better late than never.

It is inevitable that a number of the factories will be found to be non-compliant. There are many others who would be in compliance but would also welcome a change of location to a well-regulated and well-supplied environment with suitable benefits and incentives and support.

On a broader level, the government really needs to think not just about relocating the RMG industry, but about industrial policy as a whole, specifically about the infrastructure and energy needs of business and how to minimise and manage the resulting environmental fallout.

Equally important is the decentralisation of industry and development in general. Development around the country continues to remain uneven, and industrial development more so.

Any realistic plan for the future of the country needs to incorporate a plan to move businesses and industries outside of Dhaka to areas where they can boost employment and opportunity and serve as a hub or incubator for growth and development in the region.

But it has to be done right, on attractive terms. Not only do the incentives have to be tangible, but the whole enabling environment for the maximisation of growth needs to be provided. In the long-run, in terms of the employment and wealth generated it will prove a worthwhile investment.

That’s the kind of bold pro-business policy I’d like to see from our parliament and government of businessmen. Let’s start with RMG.