Environment Conducive to Doing Business | 2017-12-06 | daily-sun.com

Environment Conducive to Doing Business

Shaikh Rezanul Haque (Manik)

    5th December, 2017 10:29:09 printer

Environment Conducive 
to Doing Business

Shaikh Rezanul Haque (Manik)

Nowadays “doing business” is a much talked about phenomenon in the arena of trade and commerce across the world, so is in Bangladesh. In economic parlance doing business means how an all environment of a country is conducive enough to continue ongoing businesses or a new entrant to the business can launch a commercial or industrial venture easily and smoothly without any trouble worth mentioning.

Given the overall atmosphere of Bangladesh, business and the resultant commercial activities thereof are not up to the mark, let alone congenial one. Bangladesh has registered 177th place out of 190 countries in the world in the latest “Doing Business Index” down a step from last year’s position. While many of us blame it on our poor infrastructure and energy deficiency, the main reason is our corrosive and rusty institutions: bureaucracy, banking system etc. The problem dates back to our colonial background, exclusive characteristics and unfriendly attitude towards businesses, not to say, hostile outlook. Despite having good intentions, the government is striving to reform bureaucracy or present setting erroneously by appointing retired bureaucrats, not innovators, business expert or academics.

When India stepped up 30 positions from 130 to 100 within a year, staying in the same zone without undergoing a radical overhaul of the polity, it is indeed a matter that calls for a little explanatory note.  What happened in India in the last one year? It is simple: the political leadership instructed the bureaucracy to accomplish in way the regime required to promote India onto global stage. It is again the political leadership of Bhutan and Nepal, the other close door neighbours of ours, where the regimes defined their goals and the public servants consolidated their ties with businesses accordingly and that is vital. Bhutan and Nepal rank much higher than we do: 75 and 105 respectively. If Sri Lanka did not have a quarter-century long civil war which ended only eight years ago, probably it would have scored a better position than its current 111. Even Pakistan – a country which we outpaced in economic growth – ranks 147, making our agony intense. These examples are enough to conclude that we are hiding some of our perennial defects and sending the patient to the wrong doctors.

Are all our regulators hostile to business? Not necessarily, although they lack farsightedness and courage to carry on reforms lest their positions should become uncertain. But the main lead must come from the political leaders. The success story of India is a tale of transformation from the Licence Raj to deregulation, openness and business friendly market economy approach.  On the contrary, the ghost of hassling others in the name of being so loyal to regulations persists in almost all our state-owned agencies. And police verification in all cases appears to have been a source of rent seeking and harassment.

A fresh graduate who doesn’t have uncles in high positions needs at least two basic things to start a business: electricity and bank credit.  As the data show, that both actions take not more than a month in India, much to our frustration, securing a credit line Bangladesh takes as long as five months, while getting electricity takes around six months. Nonetheless, the top brasses of our functionaries boast of the above accomplishments! Isn’t this enough to explain why India jumped up 30 places and we are still floundering in the quagmire of regulations and hopeless performance? If a confirmed defaulter can manage a big loan in less than five days, why should it take five months for an entrepreneur to commence a new business? It simply suggests that doing business in Bangladesh is not easy for a new or under-privileged one. Rather, it is heavenly for the few, especially those who are privileged and precariously painful for fresh entrepreneurs, particularly women.

Had doing business been so hard in Bangladesh, it would not have had 7-plus growth. The loan defaulters and the privileged class are optimising their objectives of abnormal profit maximisation astronomically, making it difficult for others and also for foreign investors to do business.


This is starkly reflected in the amount of FDIs as a share of GDP – it has remained as low as low as around one percent of GDP since 2009. The government in order to attract investment, especially foreign investment formed Board of Investment (BOI) which proved unworkable and subsequently died but re-emerged as Bangladesh Investment Development Authority (BIDA), What BIDA has done so far is commendable but it lacks authority in many areas to make the reforms.  In this context, it is desirable to constitute a separate ministry to exclusively handle investment.

An increase in ministry may not seem unpalatable in a developing country like ours. But two elected ministers with firm political will, if appointed to the portfolios of investment and revenue collection, can bring landmark changes in the country’s economic scenario through rapid industrialisation and employment generation.

If we make a list of top businesses in Bangladesh, we will find a number of conglomerates, “courageous defaulters” and “patriotic money launderers” – economists define them as an oligarchy.


While doing business is a fun for them, they have made it equally difficult for anyone with better price. These people are so influential that they have already resisted the government’s long promised VAT law. They can also twist rules and regulation in their favour. One such example is the proposal of more directors from one family for longer tenure for directors in banks - an attempt obviously to ruin corporate culture in the banking industry. This is certainly a self-contradiction of the government which is otherwise is committed to corporate culture and market economy.

Let us give a second thought to our position (177).  The countries below Bangladesh such as Congo, Chad, Libya, Afghanistan, Yemen, Somalia, South Sudan and the like are mostly known as “failed states”. They are tormented by desultory war, civil war, terrorism and militancy.


If we ignore these outliers, Bangladesh is placed in the lowest rung of the index. And that is totally unacceptable. Serious reformative measures directed by political leaders are indispensable to save the nation from becoming a nation that is unfriendly towards business, plagued by unhealthy competition, suffering from massive unemployment problem.

The writer is Rtd. Dy. General Manager (BSCIC), Khulna.
mail: rezanul112@gmail.com