Reducing business costs
Saturday, 9 August 2008
A foreign investor who decides to set up an industry in Bangladesh may count on cheap labour to give him an edge over rival producers in other parts of the world. This factor should have worked as a powerful pull factor in drawing a far greater amount of foreign direct investments (FDIs) into Bangladesh. But this has not been happening and the same led to a search for the reasons.
The reasons were pinpointed in several studies and reports issued by donor organisations and foreign investors' bodies respectively. The factors namely are corruption, poor law and order, unreliable power supply, the high interest rates on borrowing, weak state of the present infrastructures, inadequate fresh infrastructures, government's fiscal policies, etc.
The point is this country will not transform itself into an attractive investment destination until these major stumbling blocks on the path of stepped-up investment operations are well addressed. The private sector has little or nothing to do with treating the above conditions which are holding back investments. It is for the government to act quickly and vigorously in relation to each of the factors.
Nothing substantive has been done so far to reform the institutional arrangements for minimising bureaucracy and dealing with cases of procrastination or dilatory policy measures or supports by government officials that are major disincentives for entrepreneurs. In the realm of power supply, nothing of value was done to ensure uninterrupted power supply to industries and services. The implementation of various schemes for additional power generation and improvement of transmission and distribution capacities are progressing at a snail's pace.
Thus, the real improvement of the rate of investment depends crucially on urgent steps taken by the government in response to the factors working against investment not in piecemeal fashion but simultaneously in a package form.
Nurul Huda
Baridhara, Dhaka.
The reasons were pinpointed in several studies and reports issued by donor organisations and foreign investors' bodies respectively. The factors namely are corruption, poor law and order, unreliable power supply, the high interest rates on borrowing, weak state of the present infrastructures, inadequate fresh infrastructures, government's fiscal policies, etc.
The point is this country will not transform itself into an attractive investment destination until these major stumbling blocks on the path of stepped-up investment operations are well addressed. The private sector has little or nothing to do with treating the above conditions which are holding back investments. It is for the government to act quickly and vigorously in relation to each of the factors.
Nothing substantive has been done so far to reform the institutional arrangements for minimising bureaucracy and dealing with cases of procrastination or dilatory policy measures or supports by government officials that are major disincentives for entrepreneurs. In the realm of power supply, nothing of value was done to ensure uninterrupted power supply to industries and services. The implementation of various schemes for additional power generation and improvement of transmission and distribution capacities are progressing at a snail's pace.
Thus, the real improvement of the rate of investment depends crucially on urgent steps taken by the government in response to the factors working against investment not in piecemeal fashion but simultaneously in a package form.
Nurul Huda
Baridhara, Dhaka.