Photo : Messenger
Researchers have identified dozens of big and small impediments one has to circumvent in order to obtain the necessary permissions before one can really go into production. It’s an old story that bureaucratic bottlenecks delay movement of files on the tables of the government offices and often they do not get cleared unless the entrepreneur can knock at the right door.
In this connection, the following incident that happened over a decade ago should be considered relevant. A German investor had arrived on the invitation of his local agent with the hope of starting a large enterprise in Bangladesh. He started to visit all the offices concerned, attending meetings at the ministry, department of industries, chambers of commerce, NBR, City Corporation office and so on. He had visited these offices a number of times and signed on numerous forms and papers. Ultimately, he found out that over a month later and putting his signature on more than one hundred documents, he was only half way through. He still had many miles to go. Frustrated, the gentleman left Dhaka one fine morning without even informing his local partner. The local partner lost his principal forever.
This writer has met many foreigners who expressed deep resentment at the harassment they received and loss of time they had to endure at various offices in connection with starting a business in this country. As an example, they said that while it takes about two hours to get a land phone connection in their country, they had to wait for days for the same in Bangladesh. This is the same with getting other utility connections. It so happens that even after importing and installing the capital machinery in the factory, entrepreneurs have to run from door to door for different types of permissions. The hassles of clearing imported raw-materials from the sea port often reach horrendous proportions.
Let us see what some development partners have to say about this problem. In a recent (2024) survey, two Japanese government agencies have identified a difficult legal system and time-consuming customs clearance as two major barriers to doing business in Bangladesh. In another survey done in 2023, researcher found five top major impediments, namely, unclear legal system, complicated legal system operation, slow tax procedures, slow administrative procedures (obtaining permits, licences, utility connections, etc.), hurdles in policy management by local government, etc., slow down the smooth operation of business in this country. In a survey in 2022, lengthy customs clearance and instability in foreign exchange rate were found responsible for slowing down of business speed. The Japanese development agency Jica reported that low inflow of foreign direct investments (FDIs) and low labour productivity are two major challenges.
Bangladesh is considered by local and foreign experts a land of untapped potential. The multifaceted activities that are resulting in increased production in the food, power plants, agricultural and fishery farms, textile and garment industries and many other non-formal sectors are making foreign experts praise the growth. But they are highly critical of the functioning of various government offices.
Prime Minister Sheikh Hasina, however, is committed to implementing the policy of simplifying the procedures of setting up and doing business ventures, especially for foreign investors. The government has the good intent to help remove the current bottlenecks that exist to slow down efforts undertaken by the entrepreneurs in starting an enterprise. How much the impediments have been removed is an issue worth investigating.
On many occasions, in meetings with the prime minister, top business leaders of the country acknowledged her government’s support with regard to negotiable business policy and hoped she would continue to support them through formulating more business-friendly policies. In this connection, we may recall that Prime Minister Sheikh Hasina had inaugurated the two-day Bangladesh Investment and Policy Summit 2016 to showcase investment opportunities in various sectors in Bangladesh for the private entrepreneurs.
A delegation of foreign investors, including experts of foreign direct investment and industrial and international trade, policymakers and business entrepreneurs had joined the Investment Summit. The main objective of the summit was to highlight the latest policy for private sector growth and private sector investment opportunities in Bangladesh. The Export Promotion Zones (EPZ) have been our prize items in attracting foreign direct investment.
The Investment Summit was a timely initiative to provide the business sector the required boost to take the economy a few notches up, especially because the flow of foreign direct investment (FDI) has not been as steady as we wanted it to be. Addressing foreign investors, the PM said, “We invite you to invest in Bangladesh. Rest assured; you will have the full support of my government.”
Bangladesh Investment Development Authority (BIDA) has been created by the government to coordinate essential reforms for the World Bank’s Ease of Doing Business with technical assistance from the International Finance Corporation (IFC). This is the most-needed One-Stop service that exists to benefit investors in doing business in Bangladesh.
BIDA has been created in response to the suggestion of business leaders for a Green Channel or One-Stop Clearance system which would allow foreign investors, manufacturers, exporters and importers to quickly fulfill their legal requirements within the shortest possible time with less harassment and difficulty.
Last but not least, we have to reduce the cost and time of doing business in Bangladesh for the sustainable growth of the economy. And no denying, in this regard, all the stakeholders will have to play their roles in a coherent manner. The primary responsibility of making doing business easy rests on the shoulders of the politicians and policy makers.
The writer is the Editor of the Daily Messenger.
Messenger/Fameema
