During the situational case study, businesses across the country said "corruption is the single-most vital factor" affecting negatively their business, says the survey report published Wednesday by the Centre for Policy Dialogue (CPD).
In the study, conducted in May-July of 2023, 67.61 per cent of businesspeople said corruption was the biggest impediment in the way of doing business in 2023. In 2022, the percentage was 64.6.
"Limited effective measures to curb corruption as well as lack of transparency and accountability in case of licensing, logistics and different service-providing activities of public agencies cause the weakening of business environment," says the survey report titled 'Bangladesh Business Environment Study 2023: Findings from the Executive Opinion Survey'.
The CPD conducted the survey in partnership with the World Economic Forum (WEF) through talking to 71 businessmen of Bangladesh.
As a future risk factor, 66.20-percent businessmen were anxious about supply of energy in the next two years.
The businesses described the availability of energy as a serious concern, especially at a time when a lack of petrol supply was hurting industries and lowering output.
Research Director of CPD Khondaker Golam Moazzem made the presentation on the findings, along with ways of breakthroughs, in a media briefing at the CPD office in Dhaka.
Among the top three hurdles, 54.9-percent businesses responded that inefficient government bureaucracy and 46.5 per cent responded that foreign-currency instability are the two other most problematic factors creating hurdles for business owners.
"The severity of these top three problematic factors has increased compared to the previous years," said Mr Golam Moazzem.
Another two factors have been identified as emerging risk factors, other than forex instability.
Of this pair of villains, inflation is identified by 39.4 per cent as the fifth-most important factor for the last two years, whereas it had been among the bottom three in the previous years.
However, businesspeople's perception regarding inadequate infrastructure, which would usually be considered one of the top three problematic factors, slightly improved following development works over the years. Some 39.4-percent businesses responded that inadequate infrastructure is problematic factor.
The survey reveals that 58 per cent of businesses complained about lack of monitoring and supervision in the banking sector.
Fifty-percent businesses also said they were unable to import products for the ongoing dollar crisis.
The spot checks also found companies facing difficulties in various financial affairs such as international transaction, opening letter of credit (LC) and managing import payments.
"Financial-sector indicators have consistently shown negative trends in recent years, posing challenges for obtaining equity funding and accessing finance, especially for Small and Medium-sized Enterprises (SMEs)," the report says.
While larger businesses recover from the production shocks induced by the pandemic, more than one-third of small-scale businesses continue to experience output decline.
Dr Golam Moazzem highlighted that the key indicators in research and technology show a declining trend, with limited business-university collaboration in research and development (R&D).
"The adoption of crucial technologies such as artificial intelligence (AI), robotics, quantum encryption, and space technologies remains limited," he said about state of the latest technologies that are key to advancing socioeconomic situation in the fast-evolving milieu.
The policy think-tank recommends strengthening institutional mechanisms to combat corruption, which is deemed pervasive.
It highlighted what is termed the commonality of bribes in various sectors and emphasised the need for easily accessible digital payment systems to leapfrog the midline rent-seekers.
"The new government, in line with its election manifesto, should disclose strategies for addressing corruption in public procurement, registration, licensing, permissions, and official orders," the RD told the function.
"The government should now focus on attracting foreign direct investments (FDIs), increasing export- competitiveness, and channeling inward remittance flow through formal channels by adopting a market-based exchange-rate policy to help the business owners," Dr Moazzem says about the CPD suggestion for un-pegging rates.
An urge was made to the government for helping out SMEs by easing access to finance and customising fiscal instruments such as tax breaks and subsidies for specific sectors impacted by the pandemic.
Furthermore, the government should implement loan-guarantee schemes with lower collateral requirements and easier application processes for SMEs. The new government should disclose its strategy for addressing the challenges through concerned ministries and departments.
"Urgent measures are needed to restore disrupted macroeconomic stability in recent years," it is stated in the CPD presentation on economic challenges and remedies, adding that a nuanced monetary policy, supported by fiscal measures, is crucial to controlling inflation and boosting the supply of dollars.
To foster digital literacy, policies such as providing affordable access to technology and training for SMEs to leverage e-commerce and online platforms should be implemented, the CPD recommends.
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