#Title

How can we become an attractive investment destination?
CONTINUED FROM PAGE 29
Though our government agencies claim they are very keen and sincere about promoting investment, the ground reality often differs from their claim. Industry experts say that there are many gaps in the comprehensiveness of our policies, as well as in their implementation – particularly when it comes to the private sector and investors. Then there is the problem of some areas of business being over-regulated, while others are not regulated enough.
It should be noted that for investors, the level of convenience in doing business in a country plays a crucial role in them investing there. Most, if not all, investors choose to invest in countries based on how easy it is to do business there, as well as by their global business competitiveness. They assess the clarity of existing policies, reliability of government officials, adherence to rules and regulations and, most importantly, whether there is sufficient security for their investments.
In September 2021, the World Bank discontinued publishing its of Ease of Doing Business index. Nevertheless, foreign investors today still evaluate a country’s investment potential based on its Ease of Doing Business ranking and overall economic climate. Bangladesh ranked 168 out of 190 countries in 2020, which says a lot about the business environment here. For instance, transferring a property title in Bangladesh takes an average of 271 days, almost six times longer than the global average of 47 days. Resolving a commercial dispute through a local first-instance court takes an average of 1,442 days, almost three times more than the 590 days average among OECD high-income economies. According to the World Bank, it takes 150.2 days for a new business to get electricity connection in Bangladesh, whereas it takes 31 days in Vietnam, 30 days in Singapore, 24 days in Malaysia, and 55 days in neighbouring India.
Furthermore, existing foreign investors often complain about bureaucratic tangles in Bangladesh that stand in the way of business operations and obtaining various licenses. Then there are hidden costs in matters related to procedure, policy, law, and infrastructure that seriously weigh upon the cost of doing business. Such barriers include bureaucratic red-tape, poor socio-economic and physical infrastructure, unreliable energy supply, corruption, absence of good governance, low labour productivity, underdeveloped money and capital markets, high-cost of doing business, complicated tax system, frequent changes in policies on import duties for raw materials, machinery and equipment, delays in decision-making, etc. In recent times, frequent power cuts and a gas crisis have been added to the list of challenges – as a result, industries and businesses in Bangladesh have been struggling since, in many cases, their production declined by 50 percent, while their cost of production rose significantly. Businesses also allege that they have to pay for other hidden costs, for example, to get their goods released from ports, which further pushes up their product prices at the consumers’ end.
As unpleasant as it may sound, corruption has spread across every sector in Bangladesh. In the Transparency International’s (TI) Corruption Perceptions Index 2021, Bangladesh ranked as the 147th most corrupt country out of 180 countries.
According to the World Economic Forum’s (WEF) Global Competitiveness Index (GCI) 2019, Bangladesh slipped two notches to 105 among 141 countries. As per the report, Bangladesh’s competitiveness declined in 10 out of 12 categories, where significant deterioration was observed in regards to macroeconomic stability, labour market, ICT adoption, and infrastructure. Beside poor infrastructure, lack of land, acute shortage of power and gas for new industries, finding the right people and getting them to work productively are the biggest problems in Bangladesh today.
Undoubtedly, we have made remarkable progress in expanding primary education, especially in raising the number of student enrolment, and reducing gender disparity. But our education system and curricula do not serve the goal of developing human capital. There is a lack of communication and collaboration between the government, academia, and businesses when it comes to producing quality or skilled individuals for today’s modern industries. To cover the shortage, a good number of foreign professionals and technicians are imported from neighbouring countries.
Business insiders say that establishing and running a business in Bangladesh require overcoming numerous challenges. There is no denying that successive governments have taken several reform measures, but more needs to be done to create a congenial business environment to achieve higher economic growth. If our policymakers are serious about improving Bangladesh’s position in the global marketplace as an attractive business and investment destination, it has to remove the deterrents discussed above that are responsible for the high cost of investment.