Bangladesh business climate impressive

Bangladesh records impressive progress in improving the country’s business environment in recent years. The index was made based on findings of a survey conducted on more than 1,000 firms across the country and the observation was made in the first-ever Bangladesh Business Climate Index 2021 (BBX-2021) launched by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange, Bangladesh (PEB).

On a scale of 10, four pillars, namely, access to infrastructure, starting a business, labour regulation and paying, showed significant progress.  The rest six indicate complexities that would need to be fixed. It was revealed that out of 100, Bangladesh scored 61 points. The report shows that the country has made significant progress in the business climate and its development journey to middle-income status. Among others, access to infrastructure scored the highest at 72.02, while starting business got 68.91, paying taxes 68.72 and labour regulation 66.35.

It is believed that macro success has filtered down to micro achievements, while Bangladesh is gradually developing a meaningful administrative and effective production support system.  

The BBX-2021 index report showed there is an unaddressed policy agenda, especially in terms of improving trade facilitation, finance barriers, and facilitation of technology adoption. These unaddressed issues are further inhibiting the expansion of both small and large businesses. It is essential that regulatory and institutional improvements are well addressed, which are needed to ease the business environment for entrepreneurs.

It is being commented by the experts that when the World Bank discontinued the ease of doing business index, MCCI’s Business Index has come at an appropriate time. Policy makers think it is credible enough and will help in achieving the purpose of improving the business environment and the community as a whole. The report reflects the present status of Bangladesh’s business environment, which also emphasises decentralisation of businesses.

Business leaders maintain the view that in several of the doing business indicators Bangladesh’s actual performances were not properly reflected due to a lack of information. They believe Bangladesh performed better in the last several decades and accordingly all progress stories and relevant data have been included in the BBX-2021 report, which they hope will help the government during the time of policy formulation.  

While the BBX report claims significant improvement in many areas of business in the country, it also incorporated new innovative messages for the business people to take the country forward in all sectors. This was aimed at ensuring a trade-friendly environment to enhance industrialisation, investment and general trade and commerce. Business leaders informed that many countries like China, Malaysia, India and others also publish such indexes on a regular basis. While citing the example of Japan’s financial and technical assistance to various mega projects including Metrorail to improve the infrastructure, transportation and communication system, experts say that once these projects are completed, the business environment in the country will improve further.

While offering suggestions for further improvement, business leaders said it is important for the private sector to know the strengths and weaknesses in the ease of doing business. BBX report would have been more effective if it had global comparison. Access to finance is now collateral-based and they hope policymakers would take initiatives to improve the situation. In their observation, the RMG sector finds it difficult to obtain land compared to other business enterprises. 

Shortage or non-availability of land is found as a major obstacle in setting up operations in these two growth centres. They are of the opinion that finance constraints encompass several sectors, but most adversely affect the fast-moving consumer sector as well as real estate. Pharmaceutical and construction sectors find it relatively easier to gain access to finance than other sectors.

It is believed that such progress in the business environment report would help attract domestic and foreign investment, which is highly needed at the moment. The information, data and references given in the report would also boost the resolve of new entrepreneurs to come forward to invest in various innovative projects. This yearly initiative should be supported by all the stakeholders and development partners at home and abroad.