Mir Mostafizur Rahaman
Unclear legal system and time-consuming customs clearance are identified as two top barriers to doing business in Bangladesh, reveals a survey conducted recently by two Japanese government agencies.
The survey for the year 2023 finds five top major impediments - underdeveloped legal system and unclear legal system operation, time-consuming tax procedures, time-consuming administrative procedures (permits and licence), unclear policy management by local government and political and social instability.
On the other hand, customs clearance and volatility in foreign exchange rate were two top challenges for businesses in 2022, it said.
Interestingly, though high costs of raw materials and power were cited as impediments to businesses in 2022, these were not mentioned in the top five challenges in 2023.
One of the significant findings of the survey is that Bangladesh is ahead of some neighbouring countries in having some business advantages.
For example, average monthly basic salary for a worker in the manufacturing sector in Bangladesh is $114 which is $144 in Pakistan and $337 in India.
On the other hand, the average monthly basic salary of a manager in the manufacturing sector is $ 619 in Bangladesh.
In Vietnam, it is $1107 and in India it is $1305.
Market growth, low labour cost and ease in recruiting local staff are identified as top advantages in doing businesses in Bangladesh, the survey shows.
According to the survey, 'intention of business expansion' among Japanese companies is in Bangladesh is the highest the region.
Regarding the direction of business development over the next 1-2 years, 45.5 per cent of companies answered "expansion," up 1.1 points from the previous year's survey.
According to a JICA presentation, low inflow of foreign direct investments (FDIs) and low labour productivity are two major challenges need to be addressed for improving investment climate.
The FDI here is only 0.3 per cent of GDP whereas the 'Vision 2041' targets 1.66 per cent FDI to GDP contribution.
And the GDP per person employed is almost half of that of Thailand, it said, quoting the World Bank 2022 report.
It said that the Japanese companies are keen to expand their businesses in the region and the Matarbari project is seen as the key to have access to the market of north eastern states of India.
The bilateral relations between Japan and Bangladesh have been very good since Bangladeshi foundation, especially at the government level.
Bangladesh highly values to Japan's experiences, technology, etc. and it is remarkable among the countries that the Japanese government cooperates.
Therefore, Bangladesh can serve as a model case for "win-win" cooperation, as stated in the Development Cooperation Charter adopted in 2015 as a basic policy, in which cooperation "based on Japan's experience and knowledge" and more direct benefits to Japan can be expected through cooperation to the partner country, said a JICA report.
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