Creating business-friendly environ

Over more than three decades and a half, private sector has been given the role of engine of growth in Bangladesh. With more or less facilitating role of the government, the private sector has emerged in a robust way. It is now generating about two-thirds of gross domestic product (GDP). About 75 per cent of total employment is in the private sector. Apart from service and manufacturing sectors, the private sector has significantly participated in building of infrastructures like power generation, construction of roads and bridges and facilitated telecommunication networks. But is the private sector happy in the present state of the Bangladesh economy? In other words, is it enjoying business-friendly environment?
The first issue relates to investment. Economists and business leaders are saying almost everyday that the rate of investment is very low. This has also been admitted by the government. The causes appear to be simple. Political uncertainty has created inertia both for foreign and local investment. Domestic interest rates are high. The Rana Plaza tragedy and its aftermath have triggered image crisis for the country. In spite of frequent assurances by the government, factories are not getting necessary gas and electricity. The construction work of 4-lane Dhaka-Chittagong highway is going slow. The law and order situation does not seem palatable to the investors as there are frequent incidents of abduction and sometimes killings.
The overall circumstances of dealing with different offices by different business people are not conducive. They have to go to many offices for trade licenses and renewal thereof. They have to visit gas and electricity offices for having connections. They have to go to banks for deposits and withdrawal of money and for sanctioning loans. Everywhere they have to face cumbersome processes that result in extra costs of time, money and energy. Sometimes, they get embarrassed and frustrated. The entrepreneurs, particularly the new ones, face some hard realities which are bitter. In such a situation, they develop a tendency to take recourse to malpractices in their businesses to make things easy. They talk about all these interesting episodes. People hear it. Friends know it. Family members come to know about these malpractices. This has created a perception in society that without money no work can be done. All these speak of unfavourable business environment.
Extortion is another feature in almost every sphere of the Bangladesh economy. Business people have to pay ransom and tolls to law enforcers and political cadres. They are obliged to pay such money whether they are factory owners or petty hawkers. Such stories are regularly published in newspapers off and on.
Recently a Bengali daily published a news item saying an export-oriented sweater factory was closed down at the Fatullah industrial area fearing extortionists. About 2,550 workers became jobless. The story goes further: a few months ago, a large number of export-oriented sweater factories were closed fearing extortionists in the same industrial area. Who are behind this are known to everybody. Even the daily courageously indicated some names. If this is the case, how will the investors feel inspired to invest and how will the entrepreneurs run their businesses? Who will actually ensure that this kind of frightening atmosphere comes to an end? The answer is simple. It is the government and the government only. The concerned ministry and the law enforcing agency are responsible to ensure that factories are not closed on fears of extortion.
Another newspaper also published a news story about extent of extortion on April 26. This is about extortion poor hawkers are subjected to on Dhaka's footpaths. The report said, "A section of police personnel and Awami League men extort around Tk. 13 million a day from footpath hawkers in the capital for having snacks and tea". Quoting the Bangladesh Hawkers' Federation, the report said that each of some 260,000 hawkers pays the extortionists about Tk. 50 on average every day. It appears that hawkers have no choice but to pay to run their business. Linemen collect money at nightfall. It is also a fact that extortion happens on all city footpaths. We come across other serious stories of extortion at different times. Buses plying on the city streets have to pay weekly and monthly tolls. Trucks and covered vans plying on the highways have to pay such tolls. The amount of extorted money is significant. In most of the cases, the incidence of such costs trickles down to the consumers.
Another important element for enabling business-friendly environment is fire prevention and fire safety facility. The industrial sector has been frightened by some such recent incidents. In spite of best efforts rendered by the Fire Service and Civil Defence Directorate, it has been observed that they have less equipment and personnel to deal with serious fire and building collapse incidents. It has been found in many cases including the Rana Plaza tragedy. The Fire Service and the Civil Defence has an important role in creating an enabling environment for industry, commerce and service sector at large.
Many of the issues that are affecting business-friendly environment have been raised in the context of Bangladesh. Some of them relate to institutional deficiencies and some of them to safety, security and protection of life, freedom and wealth. These elements are not only important for enabling business environment but also lie at the very roots of statehood. These are the basic requirements of social contract which culminates in the formation of a state. The goal is to create a safe and just habitable human environment ensuring peace and security for all. All concerned, particularly those who run the state, should seriously put efforts in ensuring a social order that is congenial to the economy and to society at large.
The writer is an economist                       and columnist. chowdhuryjafar@ymail.com