Home ›› 08 Oct 2021 ›› Front
Bangladesh has made significant progress in improving the country’s business environment to attract domestic and foreign investment.
The observation was made in the first-ever Bangladesh Business Climate Index 2021 (BBX-2021) launched on Thursday by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange, Bangladesh (PEB). The index will be published every year.
The index has been made based on findings of a survey conducted on more than 1,000 firms across eight divisions in the county.
BBX-2021 showed that out of 10, four pillars – access to infrastructure, starting a business, labour regulation and paying – demonstrated progress, while six indicate action required to address complexities. Out of 100, Bangladesh scored 61 points.
Access to infrastructure scored the highest at 72.02, while starting business got 68.91 and paying taxes 68.72 and labour regulation 66.35.
“The progress shows that the country has made significant progress in business climate and its development journey to middle-income. Development achievements have been concrete,” M Masrur Reaz, founder and chairman of PEB, said in his keynote presentation.
He said macro success has filtered down to micro achievements, while Bangladesh is gradually developing a meaningful administrative and production support system in several areas, said Reaz.
The index report showed there is an unfinished policy agenda, especially in terms of improving trade facilitation, finance barriers, and facilitation of technology adoption that are further inhibiting the expansion of both small and large businesses.
Regulatory and institutional improvements will need to be continually made to ease the business environment for entrepreneurs on an ongoing basis, it added.
“When the World Bank discontinued ease of doing business index, MCCI’s Business Index is a timely one. It is credible and will be helpful for the business community,” Prime Minister’s Private Industry and Investment Adviser Salman F Rahman said. He attended the programme as the chief guest.
The findings of the report are interesting and reflect the present status of Bangladesh’s business environment, he said, emphasising decentralisation of businesses.
MCCI President Nihad Kabir said Bangladesh’s performance in several doing business indicators is not properly reflected due to a lack of information.
“Bangladesh performed well in the last several decades. We included all progress and data in the report. It will help government policymaking,” she added.
Japan is providing financial and technical assistance to various mega projects including Metrorail to improve the infrastructure, transportation and communication system. Once these projects are completed, the business environment in the country will improve further, Japanese Ambassador to Dhaka ITO Naoki said.
So many areas have been improved significantly. BBX introduced new innovative massage for the business people. These reports help the country’s further development, FBCCI President Md Jashim Uddin said.
We need to ensure a trade-friendly environment to boost industrialisation, investment and business, he added.
“It’s a timely initiative. China, Malaysia, India and so many countries published this index. It will attract foreign investors to Bangladesh,” said Abul Kasem Khan, chairman of Business Initiative Leading Development (BUILD).
It is important for the private sector to know the strengths and weaknesses in the ease of doing business. BBX would have been more effective if it had global comparison, DCCI President Rizwan Rahman said. Access to finance is now collateral-based. He hoped policymakers would take initiatives to improve the situation.
Bottlenecks
The RMG sector found it most difficult to obtain land compared to firms in several other sectors. Urbanisation in Dhaka and Chattogram has been somewhat chaotic for the private sector; scarce availability of land prevents many potential entrepreneurs from setting up operations in these two growth centres.
Finance constraints span several sectors, but most adversely affect the fast moving consumer sector as well as real estate. Pharmaceutical and construction sectors found it relatively easier to gain access to finance than other sectors.
On the other hand, the trade regulations regime appears most problematic for transport, storage, and export-oriented sectors who are burdened with significant administrative processes, paperwork, and documentation.
With an increasing trend in digitisation of sales methods, retail and wholesale traders struggle to adopt technologies to survive in a competitive global and domestic market.
Sensitive legal issues centred on disputes are problematic for several sectors, including goods that are linked to safety and health, such as agriculture and pharmaceuticals.
Key highlights of report
Despite making progress in some areas, there is a need for further development and reforms in making the doing business environment more friendly.
“Reflections of ‘Intent’ and ‘Efforts’ to create conducive environment but indicates a need for greater and faster reforms to improve border clearance, port congestions, financial intermediation and institutional governance is paramount,” the report findings showed.
Average country experience significantly changes when focus expanded beyond businesses outside Dhaka and Chattogram cities; highlights regulatory implementation gap; interesting results challenging some traditional understandings, it added
Policymakers should bring regulatory and institutional reforms to make doing businesses easier. Regulatory Burden and revenue collection also need reform, said ex-MCCI President Syed Nasim Manzur.
Results indicate declining investment climate advantage of Dhaka as the primary growth centre, and prospects of developing Chattogram as commercial and industrial centre; also highlights prospects of traditionally-neglected parts of the country, said the report.
We go to different ministries and offices. But small standard operating procedure is going to change the rating of Bangladesh, said Rupali Chowdury, the president Foreign Investor Chamber of Commerce.
Despite the World Bank’s announcement to stop publishing the index, BIDA is continuing its activities to improve the business environment in the country.
“We assured that the initiative of MCCI and PEB would further accelerate the BIDA activities,” said Md Sirazul Islam, executive chairman of Bangladesh Investment Development Authority (BIDA).
