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Transferring regulatory and promotional functions

Bangladesh is considered as over-regulated in many areas. Unnecessary regulations impose huge hassles on the ordinary citizen's life and maximise cost to firms while minimising benefits to the public. The present government has very appropriately set up a Regulatory Reforms Commission for the benefit of the people, which has already submitted a set of proposals before the CTG.

A.B.M.S Zahur
THE relationship between the government and the private sector is changing due to fast moving global market, and technological and political changes. The private sector in Bangladesh needs to realise its full potential and play its proper role. The role of the government needs redefining, overhauling of the rules and processes of conducting its policy and decision-making functions, and streamlining of the regulations.
Thus, the government intends to accelerate the growth of industry and trade through assigning the major responsibility of promoting industrial investments and exports to the private sector.
This needs transfer of certain regulatory and promotional functions to the important private sector institutions (PSIs), and abolition of certain regulatory functions.
Bangladesh is considered as over-regulated in many areas. Unnecessary regulations impose huge hassles on the ordinary citizen's life and maximise cost to firms while minimising benefits to the public.
The present government has very appropriately set up a Regulatory Reforms Commission for the benefit of the people, which has already submitted a set of proposals before the CTG.
The government is committed to the market economy and is pursuing policies to enable the private sector to play a dominant role in the country's development efforts. Matters relating to the private sector are mainly dealt with by the ministries of industries and commerce.
The RMG sector has proved that the economic growth of the country can be accelerated if some of the regulatory and promotional func-
tions are transferred to the private sector immediately, while some can be transferred within about two years.
All the East Asian countries have industrial and investment promotion agencies to ensure extensive and continuous consultations between the government and the private investors to the extent of coordinating investment strategies.
In those countries, a system has been developed on competition between private sector players, in which the state plays the role of a referee. Bangladesh may seriously consider adopting a similar system to accelerate its growth.
For better coordination and decision making within key ministries (industry, commerce, jute and textiles) it may be advisable to transfer all state owned enterprises out of these ministries and consolidate all policy making and related functions in a single ministry of commerce and industry.
Some of the public agencies, like the office of the CC1 & E, Supplies and Inspections etc., need not exist. Issue of trade licenses by the municipality is not justified, and may be transferred immediately to the district chambers. Import registration and export registration may be transferred to the private sector without much difficulty.
In implementing the transfer, however, we have to consider the welfare of the citizens. Thus, enactment of some laws to ensure fairness of dealings of the PSIs with common men may be necessary. New Zealand enacted such a law, the Fair Trading Act, 1987. We may take some lesson from such an act.
Pending finalisation of the recommendations of the Regulatory Reforms Commission, it may be advisable to consider transfer of some regulatory and promotional functions of the ministries of commerce and industry quickly to private sector institutions to speed up the processes. The following functions may be considered for transfer:
• All functions of CCI & E. A recommendation for abolition of the office was made earlier several times. No action was taken;
• All functions of the offices of
National Productivity Organisation and Bitac may be transferred and the offices abolished;
• All promotional functions relating to exports to be transferred;
• All functions of Bangladesh Small and Cottage Industries Corporation may transferred be in phases;
• To make the Export Processing Zones more efficient the private sector may be involved in important decision-making;
• Functions of the office of Controller of General Insurance may be transferred in a year or so.
It is well known that the government of Bangladesh is oversized. Even with the huge expenditure from public funds people are not getting enough service. It is time that some meaningful step is taken to stop this wastage.
More professionalism is needed to face the challenges of administrative needs. Despite so much hassle we have been able to attain remarkable efficiency in some sectors, like disaster management.
Similar success is possible in the field of trade and industry with the partnership of the private sector provided that the govern-
ment strongly supports the capacity building of private sector institutions.
In consideration of following factors the need for transfer has become urgent:
• Reduction of revenue expenditure and lessening of pressure on the funds for development;
• Decreasing availability of talented students in the government sector due to loss of status and prestige and poor compensation, and increased attraction for private sector jobs due to higher emoluments and better opportunity to utilise innovative skills;
• Increase of capacity of the government to pay higher emoluments to its employees to upgrade the quality of their work; and
• Less harassment of public and less scope for corruption of government officials.
We have good reason to believe that the capacity building of private sector agencies may not take much time, and they would be able to fully participate in the development effort of the government.
A B M.S. Zahur is a fanner joint secretary.