Lower position in 'ease' of doing business index
Saturday, 13 September 2008
The lower position of Bangladesh in the latest joint report of the World Bank (WB) and the International Finance Corporation (IFC) on the ease of doing business in some 181 countries, merits consideration. This serves as a pointer to the need for doing a great deal more to improve the country's image as a destination for investments. The decline by about six notches or coming down to 110th position from the previous year's 104th may not signify much of any significant change either way -- positive or negative -- about doing business in this country. But the Bangladesh's latest position in the index does certainly show that despite some purposive steps taken by this caretaker government to change things for the better, the situation, far from improving, has deteriorated to some extent. The facts about 231 days being still needed in Bangladesh on average to get construction permits, 302 hours, required per year for paying taxes, 28 days for exporting and 32 days in importing and, very notably 245 days in just registering property, are no good features of the investment situation in Bangladesh.
Such a situation is, thus, still very unattractive in convincing or persuading investors--specially the foreign ones --that Bangladesh is a worthwhile investment destination. The indicators of business conditions are nowhere so impressive as to attract major investment operations in the country. The same need to improve -- substantially -- for creating a major stimulus among the investors. Two well-known initiatives by the government namely the Better Business Forum (BBF) and the Regulatory Reforms Commission (RRC) were launched last year. The aim of the BBF was to bring together the government functionaries at the highest level and the business leaders, under a consultative and institutional framework to scrutinize what could be done about facilitating businesses and to recommend measures to that end. The RRC was given the task of doing away with obsolete and business-hazarding laws and to introduce new ones where these would come in support of businesses. But both of them have de facto remained rather limited in their activities so far.
Nearly a year after the formation of the BBF which created some enthusiasm when it was set up, progress particularly in areas of implementation for changing really the ground-level situation appears to be far less than what was anticipated or needed. According to media reports, BBF made 126 recommendations for the short, medium and longer terms. The six short-term proposals were fulfilled but only half of the 56 medium-term (1-2 months) proposals had been implemented, while 64 others of the longer-term proposals remain pending for either further review by the BBF or implementation. Thus, the task list of the BBF is not getting shorter from speedy acting upon them when the same is vitally necessary to better the business and investment climate.
In many ways, the RRC's relationship with the BBF is a complementary one. Full implementation of many of the reforms recommended by the BBF depends on the rewriting, annulment, substitution, amendments or enlargement of laws pertaining to different areas of business activities. The RRC, since its inception, formulated 11 interim reports and sent them for approval and implementation to the respective ministries. But out of them only two reports have 'reportedly' been 'implemented'. This suggests the very tardy progress in meeting its objectives. Even the continuity of the work of the RRC, beyond next month, has not been assured as yet. An extension of its tenure by executive order is needed sooner than later to signal a strong continuing pro-active commitment to the business-related reforms. At the same time, it has to be ensured that the implementation of reforms that have been recommended by the BBF do not get muddled up, from bureaucratic bottlenecks.
Such a situation is, thus, still very unattractive in convincing or persuading investors--specially the foreign ones --that Bangladesh is a worthwhile investment destination. The indicators of business conditions are nowhere so impressive as to attract major investment operations in the country. The same need to improve -- substantially -- for creating a major stimulus among the investors. Two well-known initiatives by the government namely the Better Business Forum (BBF) and the Regulatory Reforms Commission (RRC) were launched last year. The aim of the BBF was to bring together the government functionaries at the highest level and the business leaders, under a consultative and institutional framework to scrutinize what could be done about facilitating businesses and to recommend measures to that end. The RRC was given the task of doing away with obsolete and business-hazarding laws and to introduce new ones where these would come in support of businesses. But both of them have de facto remained rather limited in their activities so far.
Nearly a year after the formation of the BBF which created some enthusiasm when it was set up, progress particularly in areas of implementation for changing really the ground-level situation appears to be far less than what was anticipated or needed. According to media reports, BBF made 126 recommendations for the short, medium and longer terms. The six short-term proposals were fulfilled but only half of the 56 medium-term (1-2 months) proposals had been implemented, while 64 others of the longer-term proposals remain pending for either further review by the BBF or implementation. Thus, the task list of the BBF is not getting shorter from speedy acting upon them when the same is vitally necessary to better the business and investment climate.
In many ways, the RRC's relationship with the BBF is a complementary one. Full implementation of many of the reforms recommended by the BBF depends on the rewriting, annulment, substitution, amendments or enlargement of laws pertaining to different areas of business activities. The RRC, since its inception, formulated 11 interim reports and sent them for approval and implementation to the respective ministries. But out of them only two reports have 'reportedly' been 'implemented'. This suggests the very tardy progress in meeting its objectives. Even the continuity of the work of the RRC, beyond next month, has not been assured as yet. An extension of its tenure by executive order is needed sooner than later to signal a strong continuing pro-active commitment to the business-related reforms. At the same time, it has to be ensured that the implementation of reforms that have been recommended by the BBF do not get muddled up, from bureaucratic bottlenecks.