Every year we expect Bangladesh to do better in doing business index, though unfortunately we get routinely frustrated seeing the country's pitiable performance. In the World Bank's "Doing Business Report 2019" Bangladesh ranked 176th among 190 countries. Even war ravaged Afghanistan improved its position from last year's 183rd position to 167th but Bangladesh moved only one spot up, ranking at 176th from the 177th of the last years'. In Southeast Asia, all other countries did better than Bangladesh, including Pakistan.
Year after year Bangladesh has remained almost at the bottom among the countries ranked by the World Bank in the index of doing business but the policymakers at home seem not to be perturbed by the issue. Ease of doing business in a country matters in the sense that even if all other conditions are found to be in the right context except the ease of doing business, then those supportive conditions will be of no use. Tax rate, collection method of tax, availability of credit for business, interest rates, stability of the local currency against foreign currencies matter a good deal, but if the ease of doing business is not there, then these factors will have little value. Many investors come to Bangladesh with enthusiasm seeing our investment policy but after staying here for some time they get frustrated. They can't move their investment ideas easily, they see obstruction in every step. Bangladesh's policy of one stop service in case of investment proposal is not one stop in real sense, as the investors are to ride out many steps which are not written in the brochure of the one stop service. Obstruction and corruption go hand in hand. The culture of bribery is so widespread that recently one multinational pharmaceutical company decided to close its pharma factory, as it refused to bribe physicians to earn profit from its pharma operations.
Bangladesh attracts foreign investment but that is on paper only. The practical steps an investor needs to take to make his investment operational is still cumbersome and fraught with uncertainties. Also to an extent, the investor himself needs to be corrupt so that he can practise corruption in the steps he needs to follow. In a corruption-ridden society it is very difficult to do good business by honest means. In a sense, in Bangladesh there is a race to do more corruption, doing business through corruption has become a norm, doing business through honesty is an exception.
This is one of the key reasons why foreign investors do not find things congenial here, and as a result, Bangladesh is one of the lowest recipients of foreign direct investment. The ease of doing business index for Bangladesh has gone only backward. In fact, Bangladesh was well ahead of India in this respect only some years back; now India has overtaken Bangladesh by a big margin placing it much ahead of many other South Asian countries. Of the ten criteria the World Bank used to calculate its global ease of doing Business Index, Bangladesh's worst performing area is in materialising contract. Among 190 countries that the Bank has taken into consideration for constructing the index, Bangladesh ranked 189 in this criterion. Does the government think seriously why its performance in this criterion is so poor? Investors, especially foreign ones, see this condition seriously before they decide to invest anywhere in the world. Bureaucratic red tape is blamed for many things going wrong in the area of investment and that of doing business in Bangladesh. Unfortunately, though other countries in our neighbourhood could manage this problem to a great extent, Bangladesh is not only stagnating, its position has deteriorated over time. So many paper works and so many permissions are needed to start a business here! That is one of the reasons why enthusiastic investors even abandon their projects half way through. Many well-to-do middle class people have the money to start small businesses, but because of perceived hindrances in their way of starting such businesses they shelve the idea and instead keep the money either in the banks or buy government sponsored saving instruments. Bangladesh policymakers think they have already achieved much, but they do not look what other countries did in areas where they think they have accomplished fairly. Vietnam after opening its economy much later than Bangladesh now exports goods and services worth $ 236 billion. Thailand receives $58 billion per annum from its tourism industry alone! The fact is that while other countries are running to achieve more, Bangladesh is walking to achieve the same, but Bangladesh names walking as running!
Abu Ahmed is Professor of Economics, University of Dhaka. abuahmedecon@yahoo.com