External perception of the business climate
Friday, 28 September 2007
PERCEPTION is very important for attracting investments to a country. Foreign investments are coveted by all countries but the main criterion in successfully drawing such investments by a country is how positively it can be perceived by the potential foreign investors. The global survey -- Doing Business 2008 -- by the World Bank (WB) and the International Finance Corporation (IFC) which declared their results last Wednesday, placed Bangladesh in the 107th position among 178 countries in terms of conditions existing for doing business. Bangladesh held the 102nd position in such a listing last year; it has apparently slid by some five percentage points in the present year. But in reality, the actual conditions can be thought of as remaining static in many areas while the same improved considerably in other areas. The survey was influenced largely by data collected in 2006, a year of great turbulence in Bangladesh. But such turbulences have ceased for some nine months now except a few isolated cases . Besides, the incumbent government has done quite a lot since its take-over to bring about reforms in operating vital infrastructures such as the Chittagong port. It is also engaged in reform activities pertaining to business in different areas and the good outcome of the same may be experienced in the near future.
Nonetheless, the latest WB- and IFC-conducted survey on business conditions shows that Bangladesh needs to go a long way in improving its business climate to encourage stepped-up investments in its economy. The survey report has pinpointed the areas where the drawbacks are. The government can examine the focus areas of the survey and act on them on a time-bound basis to achieve substantial improvements in relation to each of them before it leaves office. Considering its commitment to various reform-oriented programmes and also its resolve in taking them up and completing them, it should be nothing so difficult for the government to carry out the needed reforms in a short period of time. Doing of this will not only earn for it much appreciation, the same will mark a significant contribution made by this government toward acceleration of economic activities in the medium and longer terms.
It should not prove to be difficult if the government decides to act specifically on the issues such as the unusually long time spent on issuing a license, for enforcing a contract, for registering property, etc. For examples, it may take 252 days to get a licence in Bangladesh, 28 days for exporting and 32 days for importing, completing of 41 procedures and spending of 1442 days to enforce a business contract and eight procedures and 425 days to register a property. All of these hassles can surely be addressed to much shorten the time period in obtaining or doing them respectively. The same will then be looked upon as facilitators by the investors and help them to take positive decisions to invest in this country. The government only needs to examine carefully the excess of bureaucracies in these matters. It would surely be found on a careful scrutiny where the excesses are. The same can be eliminated and procedures and other bureaucratic steps much reduced to bring about remarkable improvements in making far less time consuming the pre-investment activities.
There are also policies such as the fiscal and monetary ones which can encourage or discourage investments depending on how these are perceived. Thus, in these areas also, the government can do quite a lot by further fine-tuning fiscal and monetary policies to persuade the investors.
Nonetheless, the latest WB- and IFC-conducted survey on business conditions shows that Bangladesh needs to go a long way in improving its business climate to encourage stepped-up investments in its economy. The survey report has pinpointed the areas where the drawbacks are. The government can examine the focus areas of the survey and act on them on a time-bound basis to achieve substantial improvements in relation to each of them before it leaves office. Considering its commitment to various reform-oriented programmes and also its resolve in taking them up and completing them, it should be nothing so difficult for the government to carry out the needed reforms in a short period of time. Doing of this will not only earn for it much appreciation, the same will mark a significant contribution made by this government toward acceleration of economic activities in the medium and longer terms.
It should not prove to be difficult if the government decides to act specifically on the issues such as the unusually long time spent on issuing a license, for enforcing a contract, for registering property, etc. For examples, it may take 252 days to get a licence in Bangladesh, 28 days for exporting and 32 days for importing, completing of 41 procedures and spending of 1442 days to enforce a business contract and eight procedures and 425 days to register a property. All of these hassles can surely be addressed to much shorten the time period in obtaining or doing them respectively. The same will then be looked upon as facilitators by the investors and help them to take positive decisions to invest in this country. The government only needs to examine carefully the excess of bureaucracies in these matters. It would surely be found on a careful scrutiny where the excesses are. The same can be eliminated and procedures and other bureaucratic steps much reduced to bring about remarkable improvements in making far less time consuming the pre-investment activities.
There are also policies such as the fiscal and monetary ones which can encourage or discourage investments depending on how these are perceived. Thus, in these areas also, the government can do quite a lot by further fine-tuning fiscal and monetary policies to persuade the investors.