Amending business laws
Wednesday, 14 November 2007
M Azizur Rahman
NOTHING could be more timely than the idea of a truth commission to save trade, industry and the economy from some of the unintended negative impacts of the ongoing anti-graft actions. Businessmen are losing interest in investment as they do not feel themselves confident about the future course of such actions and their extent and dimension. Some of them are scared of a spate of legal actions against a number of businessmen. Most of them also probably do not consider rates of taxes and customs duty as well as restrictions on the withdrawal and transfer of money from the bank accounts as favourable measures. The existing business laws, being inadequate and not up-to-date, they feel, do not facilitate business. Loopholes in business related laws, they consider, make it difficult to go for trading or investment. Most of them would, of course, prefer to run their business free of corruption. However, combating corruption is not possible without deep-seated institutional reforms. Hence, the priority here is to bring about such reforms so that systemic corruption which is at the root of the problem can be curbed.
The recent actions of the government, particularly its anti-corruption drive, has affected economic growth and development. For whatever reasons, our earnings from the export of apparels have already recorded a marked decline. Foreign investment has decreased substantially. Many businessmen are thinking to go abroad to settle. Many talented students, who used to come back home on completion of their studies abroad, are now giving second thoughts. A failure to improve the business atmosphere by any means would mean a decline economic growth over the next decade. So, what to do now? A Truth Commission could possibly provide a way out. It would be necessary to amend the existing business related laws to facilitate the functioning of the commission. There should be a clear cut definition of what constitutes business corruption with simple procedures to tackle it.
We need to save business and businessmen because of their ability to generate employment and contribute to the economy. Being major tax payers they are valued by all societies. Businessmen are both producers and consumers. They finance the production and consumption of goods and services. They produce goods and services for domestic and export markets as well as for the government. They create wealth.
They import goods and services produced abroad for domestic consumption, business, and government. We need to save business for our survival and prosperity. The government needs tax from the business to finance its activities.
The business related laws should be reformed to provide incentives to the businessman for his work and contribution. Encouragement to human ability, initiative and entrepreneurship alone could benefit the whole society.
The businessman will maximise profits, facilitated by business laws, which would ultimately benefit the society. Law makers make laws drafted by trained or untrained experts. But at times laws contain unnecessary or difficult provisions. For example, the 1992 Private University Act says, each of the Private University will have its own campus on a plot of 15 bighas. This provision of Private University Act is impractical in Dhaka City. Inability to implement this provision should, therefore, neither be illegal, nor corruption. Objectives of a law could be difficult to achieve because of such ground realities.
A draft business law should needs to be jointly prepared by the representatives of the business and the Government. It may not be free of any conflict of interest between the business and the Government. Businessmen would always like to utilise the law to maximise their benefit, which will tend to minimise the social or Government benefit.
(The writer is Vice-Chancellor, Uttara University)
NOTHING could be more timely than the idea of a truth commission to save trade, industry and the economy from some of the unintended negative impacts of the ongoing anti-graft actions. Businessmen are losing interest in investment as they do not feel themselves confident about the future course of such actions and their extent and dimension. Some of them are scared of a spate of legal actions against a number of businessmen. Most of them also probably do not consider rates of taxes and customs duty as well as restrictions on the withdrawal and transfer of money from the bank accounts as favourable measures. The existing business laws, being inadequate and not up-to-date, they feel, do not facilitate business. Loopholes in business related laws, they consider, make it difficult to go for trading or investment. Most of them would, of course, prefer to run their business free of corruption. However, combating corruption is not possible without deep-seated institutional reforms. Hence, the priority here is to bring about such reforms so that systemic corruption which is at the root of the problem can be curbed.
The recent actions of the government, particularly its anti-corruption drive, has affected economic growth and development. For whatever reasons, our earnings from the export of apparels have already recorded a marked decline. Foreign investment has decreased substantially. Many businessmen are thinking to go abroad to settle. Many talented students, who used to come back home on completion of their studies abroad, are now giving second thoughts. A failure to improve the business atmosphere by any means would mean a decline economic growth over the next decade. So, what to do now? A Truth Commission could possibly provide a way out. It would be necessary to amend the existing business related laws to facilitate the functioning of the commission. There should be a clear cut definition of what constitutes business corruption with simple procedures to tackle it.
We need to save business and businessmen because of their ability to generate employment and contribute to the economy. Being major tax payers they are valued by all societies. Businessmen are both producers and consumers. They finance the production and consumption of goods and services. They produce goods and services for domestic and export markets as well as for the government. They create wealth.
They import goods and services produced abroad for domestic consumption, business, and government. We need to save business for our survival and prosperity. The government needs tax from the business to finance its activities.
The business related laws should be reformed to provide incentives to the businessman for his work and contribution. Encouragement to human ability, initiative and entrepreneurship alone could benefit the whole society.
The businessman will maximise profits, facilitated by business laws, which would ultimately benefit the society. Law makers make laws drafted by trained or untrained experts. But at times laws contain unnecessary or difficult provisions. For example, the 1992 Private University Act says, each of the Private University will have its own campus on a plot of 15 bighas. This provision of Private University Act is impractical in Dhaka City. Inability to implement this provision should, therefore, neither be illegal, nor corruption. Objectives of a law could be difficult to achieve because of such ground realities.
A draft business law should needs to be jointly prepared by the representatives of the business and the Government. It may not be free of any conflict of interest between the business and the Government. Businessmen would always like to utilise the law to maximise their benefit, which will tend to minimise the social or Government benefit.
(The writer is Vice-Chancellor, Uttara University)