Global competitiveness and cost of doing business
Sunday, 13 September 2009
THE contents of two recently-published global reports, one on the global competitiveness and the other on the cost of doing business, have hardly anything encouraging for the businesses in Bangladesh. Despite the fact that the Global Competitiveness Report for this paper, prepared by the World Economic Forum (WEF) points out some improvement in the country's ranking in 2008, it, quite unambiguously, lists the absence of necessary infrastructure facilities as the 'main hurdle' to growth of businesses with power situation being at its worst. According to another report prepared by the World Bank (WB) and its subsidiary, the International Finance Corporation (IFC), on the cost of doing business, Bangladesh slipped to 119th position in 2008 from its 115th position in 2007.
The WEF and the WB-IFC have been publishing such reports every year showing the comparative situations in a large number of countries as far as businesses and investments are concerned. Bangladesh's performance in those areas has been much like the situation in the past: if there were some improvements in one or two areas in a given year, the situation would invariably deteriorate in more areas next year. Such a development is rather frustrating for all concerned since Bangladesh had earlier been the trend-setter about reforms in South Asia. The basic reason for its going down in the 'cost of doing business' ranking is that its pace of reforms has slowed down, of late. But other countries have expedited the same.
The problem of inadequate infrastructure as has been mentioned in the WEF report has been hurting both normal business and investment activities for long. But with the passage of time, the sufferings have intensified. The power and gas supply shortage has been exacting a heavy toll on the economy with existing industries unable to run to their full capacity and prospective investors withholding or canceling their investment plans. The years of inaction to improve the power and gas supply situation has now forced the incumbent government to go for some cost-intensive measures to beef up power, if not gas, production. Besides, the problems of transportation of goods to, and from, the country's main port, Chittagong and inadequate port facilities and corruption have been putting a damper on business and investment activities. It would not be out of place to mention about the time-consuming and cumbersome process involved in starting a new business, tax payments in case of external trade etc. Though the situation improved remarkably in handling of cargoes at the Chittagong port during the tenure of the caretaker government, it is, of late, showing signs of a reversal.
The businesses and investors are exposed to the problems highlighted in the WEF and WB-IFC reports in their everyday life. The difference is that they do not do any research work on their own plights. The trade bodies have been consistent in their demand for removing the major hurdles to business and investment activities. But it is the job of the government to implement necessary reforms and put in place policies appropriate to healthy growth of business and investment. Mere lip service or rhetoric would not be of any help for improvement of the ground-level situation. The authorities concerned with active cooperation of the businesses must do what is needed to improve business and investment climate in the country.
The WEF and the WB-IFC have been publishing such reports every year showing the comparative situations in a large number of countries as far as businesses and investments are concerned. Bangladesh's performance in those areas has been much like the situation in the past: if there were some improvements in one or two areas in a given year, the situation would invariably deteriorate in more areas next year. Such a development is rather frustrating for all concerned since Bangladesh had earlier been the trend-setter about reforms in South Asia. The basic reason for its going down in the 'cost of doing business' ranking is that its pace of reforms has slowed down, of late. But other countries have expedited the same.
The problem of inadequate infrastructure as has been mentioned in the WEF report has been hurting both normal business and investment activities for long. But with the passage of time, the sufferings have intensified. The power and gas supply shortage has been exacting a heavy toll on the economy with existing industries unable to run to their full capacity and prospective investors withholding or canceling their investment plans. The years of inaction to improve the power and gas supply situation has now forced the incumbent government to go for some cost-intensive measures to beef up power, if not gas, production. Besides, the problems of transportation of goods to, and from, the country's main port, Chittagong and inadequate port facilities and corruption have been putting a damper on business and investment activities. It would not be out of place to mention about the time-consuming and cumbersome process involved in starting a new business, tax payments in case of external trade etc. Though the situation improved remarkably in handling of cargoes at the Chittagong port during the tenure of the caretaker government, it is, of late, showing signs of a reversal.
The businesses and investors are exposed to the problems highlighted in the WEF and WB-IFC reports in their everyday life. The difference is that they do not do any research work on their own plights. The trade bodies have been consistent in their demand for removing the major hurdles to business and investment activities. But it is the job of the government to implement necessary reforms and put in place policies appropriate to healthy growth of business and investment. Mere lip service or rhetoric would not be of any help for improvement of the ground-level situation. The authorities concerned with active cooperation of the businesses must do what is needed to improve business and investment climate in the country.