Integrated or horizontal approach to business approval
Tuesday, 12 April 2011
Ferdaus Ara Begum
The cost of doing business increases because of time consumed for getting approval of different business processes. Advanced or even several developing countries have initiated integrated and horizontal approach to extending business approval by providing one-stop service centre. In Bangladesh, even it is not clear who is doing what. A clear business process mapping is required so that emerging entrepreneurs do not have to shuttle from one place to another for getting approval for permits and licences, do not waste their time, and their cost of doing business does not increase. As one of the advanced developing countries, Malaysia has been successful in applying integrated and horizontal, rather than vertical, process to facilitate entrepreneurs to get licences and permission. A team, comprising high-ranking civil servants and private representatives, visited several government offices in Malaysia to interact with the officials there on how they have been able to address the situation. The programme allows participants to have close interaction, for effective cross-fertilisation to know problems in the private sector. Malaysia has been able to build a robust and resilient economy. It has embarked on an economic transformation programme (ETP) to propel its economy. Presently, as a middle income country (MIC) country, it wants to graduate itself to a higher income country by 2020. The ETP will help lift the country's gross national income (GNI) per capita from US $6,700 to $15,000 and achieve 6.0 per cent growth rate per annum. Malaysia wants to shift towards a service-based economy with a target to create more than 3.3 million jobs. The ETP was designed rigorously and transparently. To ensure its implementation, a new ETP unit under PEMANDU (Performance Management and Delivery Unit) was established within the prime minister's office. As a result of this effort, Malaysia's ranking improved from 23rd to 21st for doing business 2011 report. PEMANDU has been evolved with a team of 24 highly reputed individuals; of them, 14 are from the selected government ministries and departments, and 10, from leading businessmen. It is headed by the chief secretary to the government of Malaysia. PEMANDU has got specific values and vision. The values are driven by a sense of urgency, pro-active public-private sector collaboration, facilitation and not hampering, no more regulation than necessary, and zero-tolerance for corruption. Two working groups have been set up under PEMANDU to look into efficiency of the public service delivery system and the government policy, impacting businesses. It has several task forces and focus groups to look into specific issues. In order to improve efficiencies, a one-day period for incorporation of companies has been introduced in Malaysia. In Malaysian term, it is known as SSM. It provides customized company information, customized business information, the list of companies in Malaysia, statistical data, the list of companies by state, location and postcode, etc, against some charges. Malaysia Corporate Identity Number or MyCoID is one of the breakthrough services in starting business. This is used as a single source of reference for registration and transaction purposes, with other relevant government agencies. Incorporation of companies and simultaneous registration with the participating government agencies, can be made via the electronic MyCoID gateway. This breakthrough initiative enables the starting of a business within one day. This can be termed as one of the tremendous achievements of the country which can be replicated by others. E-lodgment is SSM's online lodgment system. It enables a company to submit all documents electronically. Entrepreneurs can register their new businesses at SSM within an hour. Business Licensing Electronic Support System (BLESS) is another service portal which is working as a single window to obtain information on business licenceapprovalpermit in Malaysia and facilitates on-line application. The main objectives of BLESS are: depart from silo or vertical approach of developing online systems to that of horizontal approach in which the system cuts across the agencies and provides information and facilities before starting a business, front-end system to licensing agencies, and centralised mechanism to monitor the performance of the service delivery of government agencies Earlier, entrepreneurs there had to move from counter to counter. BLESS helped them to avoid running around to submit applications at different places. With the reduction of costs, BLESS has helped entrepreneurs for on-line submission and payment of fees. Now the process has been simplified and the number of licensing has been reduced drastically. BLESS has provided faster turnaround time with more efficient, on-line electronic processing of government services. It ensures privacy and integrity of information by employing stringent security measures. It guarantees services and information reliability as government agencies share common database. BLESS has given companies the facilities to tracking status of approval of the cases of the applicants, on-line notification of approval and one-payment procedure for multiple licences within the agency. It has also given the opportunity for automatic extraction of company profile from the Company Commission of Malaysia. In the first phase, the scope of BLESS is limited to Klang Valley of Malaysia and sectors covered under it, are manufacturing, construction and hotel. The authorities concerned there are planning to graduate to phase-I and phase II soon for renewal of licences covering sectors like tourism services, health services, training and education, logistics, distributive trade, etc. Eventually, they would like to involve 73 agencies where 400 licences are required. The country is willing to complete the next two phases by 2013. Bangladesh is not much behind and is trying to address such issues by promoting automation of several business services. One successful example is the office of the Registrar of Joint Stock Company (RJSC) which was set up in Chittagong in 1947 under Companies Act of 1913. The office was shifted to Dhaka in 1962. The RJSC now provides services under Companies Act 1994, Societies Registration Act 1860, Partnership Act 1932 and Trade Organisation Ordinance 1961. RJSC is the first organisation that has come under full automation in Bangladesh. Earlier, clearance was one of the big headaches for the private sector. Now this has been simplified with registration, return filing, issuance of certified copies, winding up and struck, all being done automatically. From January 2010 to December 2010, the number of on-line paid registration was 8684, in which the number of four-hour registrations was 1827, one-day, 2392, three-day, 1474, five-day, 1042, and ten-day, 1194. A total of 8581 companies were approved, and 34, rejected. Bangladesh has now been termed as one of the top ten reformers in the world in starting business. Aggressive reforms have eased way for doing business in Bangladesh and lifted the country's overall ranking by four places to 107th in the world. Bangladesh now needs to implement an integrated and horizontal approach so that an entrepreneur can be facilitated to get everything from one place. In order to achieve its goal set at Vision 2021 to raise the level of contribution by industry to the country's gross domestic product (GDP) to at least 40 per cent, all efforts do need to be devoted to simplifying business licencing process. Here, the example of Malaysia can be a good lesson for Bangladesh. (The writer is Additional Secretary of the Dhaka Chamber of Commerce & Industry and can be reached at e-mail: nothing_man2000@yahoo.com)
The cost of doing business increases because of time consumed for getting approval of different business processes. Advanced or even several developing countries have initiated integrated and horizontal approach to extending business approval by providing one-stop service centre. In Bangladesh, even it is not clear who is doing what. A clear business process mapping is required so that emerging entrepreneurs do not have to shuttle from one place to another for getting approval for permits and licences, do not waste their time, and their cost of doing business does not increase. As one of the advanced developing countries, Malaysia has been successful in applying integrated and horizontal, rather than vertical, process to facilitate entrepreneurs to get licences and permission. A team, comprising high-ranking civil servants and private representatives, visited several government offices in Malaysia to interact with the officials there on how they have been able to address the situation. The programme allows participants to have close interaction, for effective cross-fertilisation to know problems in the private sector. Malaysia has been able to build a robust and resilient economy. It has embarked on an economic transformation programme (ETP) to propel its economy. Presently, as a middle income country (MIC) country, it wants to graduate itself to a higher income country by 2020. The ETP will help lift the country's gross national income (GNI) per capita from US $6,700 to $15,000 and achieve 6.0 per cent growth rate per annum. Malaysia wants to shift towards a service-based economy with a target to create more than 3.3 million jobs. The ETP was designed rigorously and transparently. To ensure its implementation, a new ETP unit under PEMANDU (Performance Management and Delivery Unit) was established within the prime minister's office. As a result of this effort, Malaysia's ranking improved from 23rd to 21st for doing business 2011 report. PEMANDU has been evolved with a team of 24 highly reputed individuals; of them, 14 are from the selected government ministries and departments, and 10, from leading businessmen. It is headed by the chief secretary to the government of Malaysia. PEMANDU has got specific values and vision. The values are driven by a sense of urgency, pro-active public-private sector collaboration, facilitation and not hampering, no more regulation than necessary, and zero-tolerance for corruption. Two working groups have been set up under PEMANDU to look into efficiency of the public service delivery system and the government policy, impacting businesses. It has several task forces and focus groups to look into specific issues. In order to improve efficiencies, a one-day period for incorporation of companies has been introduced in Malaysia. In Malaysian term, it is known as SSM. It provides customized company information, customized business information, the list of companies in Malaysia, statistical data, the list of companies by state, location and postcode, etc, against some charges. Malaysia Corporate Identity Number or MyCoID is one of the breakthrough services in starting business. This is used as a single source of reference for registration and transaction purposes, with other relevant government agencies. Incorporation of companies and simultaneous registration with the participating government agencies, can be made via the electronic MyCoID gateway. This breakthrough initiative enables the starting of a business within one day. This can be termed as one of the tremendous achievements of the country which can be replicated by others. E-lodgment is SSM's online lodgment system. It enables a company to submit all documents electronically. Entrepreneurs can register their new businesses at SSM within an hour. Business Licensing Electronic Support System (BLESS) is another service portal which is working as a single window to obtain information on business licenceapprovalpermit in Malaysia and facilitates on-line application. The main objectives of BLESS are: depart from silo or vertical approach of developing online systems to that of horizontal approach in which the system cuts across the agencies and provides information and facilities before starting a business, front-end system to licensing agencies, and centralised mechanism to monitor the performance of the service delivery of government agencies Earlier, entrepreneurs there had to move from counter to counter. BLESS helped them to avoid running around to submit applications at different places. With the reduction of costs, BLESS has helped entrepreneurs for on-line submission and payment of fees. Now the process has been simplified and the number of licensing has been reduced drastically. BLESS has provided faster turnaround time with more efficient, on-line electronic processing of government services. It ensures privacy and integrity of information by employing stringent security measures. It guarantees services and information reliability as government agencies share common database. BLESS has given companies the facilities to tracking status of approval of the cases of the applicants, on-line notification of approval and one-payment procedure for multiple licences within the agency. It has also given the opportunity for automatic extraction of company profile from the Company Commission of Malaysia. In the first phase, the scope of BLESS is limited to Klang Valley of Malaysia and sectors covered under it, are manufacturing, construction and hotel. The authorities concerned there are planning to graduate to phase-I and phase II soon for renewal of licences covering sectors like tourism services, health services, training and education, logistics, distributive trade, etc. Eventually, they would like to involve 73 agencies where 400 licences are required. The country is willing to complete the next two phases by 2013. Bangladesh is not much behind and is trying to address such issues by promoting automation of several business services. One successful example is the office of the Registrar of Joint Stock Company (RJSC) which was set up in Chittagong in 1947 under Companies Act of 1913. The office was shifted to Dhaka in 1962. The RJSC now provides services under Companies Act 1994, Societies Registration Act 1860, Partnership Act 1932 and Trade Organisation Ordinance 1961. RJSC is the first organisation that has come under full automation in Bangladesh. Earlier, clearance was one of the big headaches for the private sector. Now this has been simplified with registration, return filing, issuance of certified copies, winding up and struck, all being done automatically. From January 2010 to December 2010, the number of on-line paid registration was 8684, in which the number of four-hour registrations was 1827, one-day, 2392, three-day, 1474, five-day, 1042, and ten-day, 1194. A total of 8581 companies were approved, and 34, rejected. Bangladesh has now been termed as one of the top ten reformers in the world in starting business. Aggressive reforms have eased way for doing business in Bangladesh and lifted the country's overall ranking by four places to 107th in the world. Bangladesh now needs to implement an integrated and horizontal approach so that an entrepreneur can be facilitated to get everything from one place. In order to achieve its goal set at Vision 2021 to raise the level of contribution by industry to the country's gross domestic product (GDP) to at least 40 per cent, all efforts do need to be devoted to simplifying business licencing process. Here, the example of Malaysia can be a good lesson for Bangladesh. (The writer is Additional Secretary of the Dhaka Chamber of Commerce & Industry and can be reached at e-mail: nothing_man2000@yahoo.com)