Improvement in 'Doing Business' ranking
Sunday, 7 November 2010
Bangladesh's track record in facilitating business has never been anything that could make its people proud. The reports of the international agencies published from time to time have always pointed their finger at the hurdles impeding business initiatives, new and old. But not this time. The country has been successful, at least, partially, to take a break from the past tradition and make some improvements on its scorecard. The findings of the Doing Business Report (DBR)-2011, prepared and released jointly last Thursday by the World Bank and its private sector lending arm, the International Finance Corporation (IFC), are testimony to that fact.
Aggressive reforms, particularly, to cut down the time of starting of business through online registration and reduction in property transfer tax, has helped the country to improve its overall ranking by four places and is now placed among the 10 top reforming nations in the world in 2010. It has made the most impressive improvement among the South Asian countries barring the island nation of the Maldives that improved its scores by 11 points to offer the second best doing-business environment in South Asia after Pakistan. Despite the fact the country could not do better in most other indicators employed by the DBR to assess the doing of business environment in 183 countries, its major improvement in areas of the start-up of new business is very significant considering the fact the smooth entry of new business enterprises is considered a critical factor for strong economic growth.
The reduction of the time for starting a new business from 44 days to 19 days by far is not a mean achievement. The online registration of companies and simplification of the official procedures have helped the authorities bring down the time. The local officials of the global lenders while releasing the report have rightly given credit to the last caretaker government for initiating the reforms and the incumbent government for continuing a part of the same. However, the improvement in DBR ranking of the country raises a few questions about the government's wisdom to abolish the Regulatory Reforms Commission (RRC) and the Bangladesh Better Business Forum, two entities formed by the caretakers to help strengthen reforms and ensure better private-public interaction. Had those bodies be allowed to operate with right kind of support from the government or new such bodies with the same type of functional responsibilities would have been set up, Bangladesh's doing business ranking could have been a few notches up.
However, the indicators applied in the DBR do not cover all the areas that make the entry and operations of business entities hurdle-free, particularly in the case of Bangladesh. It does not take into account the extra bucks that the businesses are made to spend to grease the palms of the officials and the powerful people in the administration to get things done or the crises of power and gas that have been plaguing the operations of the existing industrial and commercial units and thwarting the entry of the new ones. Besides, there exist procedural bottlenecks in many other areas that are yet to be straightened out to make the business operations easy and comfortable, particularly for small and medium enterprises and the ones operated by women entrepreneurs. So, there is little room for complacency if the government and the businesses as well want to better their 'Doing Business' record in a comprehensive manner. Together they would have to work hard and remove many hurdles.
Aggressive reforms, particularly, to cut down the time of starting of business through online registration and reduction in property transfer tax, has helped the country to improve its overall ranking by four places and is now placed among the 10 top reforming nations in the world in 2010. It has made the most impressive improvement among the South Asian countries barring the island nation of the Maldives that improved its scores by 11 points to offer the second best doing-business environment in South Asia after Pakistan. Despite the fact the country could not do better in most other indicators employed by the DBR to assess the doing of business environment in 183 countries, its major improvement in areas of the start-up of new business is very significant considering the fact the smooth entry of new business enterprises is considered a critical factor for strong economic growth.
The reduction of the time for starting a new business from 44 days to 19 days by far is not a mean achievement. The online registration of companies and simplification of the official procedures have helped the authorities bring down the time. The local officials of the global lenders while releasing the report have rightly given credit to the last caretaker government for initiating the reforms and the incumbent government for continuing a part of the same. However, the improvement in DBR ranking of the country raises a few questions about the government's wisdom to abolish the Regulatory Reforms Commission (RRC) and the Bangladesh Better Business Forum, two entities formed by the caretakers to help strengthen reforms and ensure better private-public interaction. Had those bodies be allowed to operate with right kind of support from the government or new such bodies with the same type of functional responsibilities would have been set up, Bangladesh's doing business ranking could have been a few notches up.
However, the indicators applied in the DBR do not cover all the areas that make the entry and operations of business entities hurdle-free, particularly in the case of Bangladesh. It does not take into account the extra bucks that the businesses are made to spend to grease the palms of the officials and the powerful people in the administration to get things done or the crises of power and gas that have been plaguing the operations of the existing industrial and commercial units and thwarting the entry of the new ones. Besides, there exist procedural bottlenecks in many other areas that are yet to be straightened out to make the business operations easy and comfortable, particularly for small and medium enterprises and the ones operated by women entrepreneurs. So, there is little room for complacency if the government and the businesses as well want to better their 'Doing Business' record in a comprehensive manner. Together they would have to work hard and remove many hurdles.