Efforts falter on slow reforms
Bangladesh has posted impressive numbers in the last 10 years, be it GDP growth, per capita income, external trade, foreign exchange reserves and many more.
Yet, the country's sorry state of economic reforms and poor corporate governance have put it at the 176th position out of 190 countries in the 2019 edition of the World Bank's Ease of Doing Business rankings, which was released on Wednesday.
Even the war-torn Afghanistan, troubled Pakistan and Myanmar are well ahead of Bangladesh.
India, which has carried out reforms to facilitate economic activities, was up 23 notches in the rankings to 77th. The neighbouring country has targeted to be amongst the top 50 countries in the next three years.
Two years ago, Bangladesh also set a task of making it to the top 100 in the next five years, meaning the country has to move up at least 15 spots each year to reach the target.
But, it managed to climb only one notch in one year. In contrast, Afghanistan advanced 16 spots to 167th.
Without improving the ease of doing business, Bangladesh's aspiration to draw foreign and local investments will never be achieved, analysts said.
Bangladesh's investment to GDP ratio stands at 31.23 percent, according to the data from the Bangladesh Bureau of Statistic.
In contrast, Bhutan's ratio is 57.62 percent, the highest in South Asia, followed by Nepal at 43.01 percent, Sri Lanka at 32.29 percent and India at 32.04 percent, a recent report of the International Monetary Fund (IMF) showed.
The government has set a target to raise the investment-GDP ratio to 34 percent by 2020.
The Bangladesh Investment Development Authority (BIDA) has taken a major initiative to ease doing business but no qualitative improvement is visible yet, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
“I don't blame the BIDA as the job is related with a number of ministries and agencies. If the ministries and other authorities concerned do not cooperate with the BIDA, the situation will not improve.”
Private investment did not accelerate significantly in the one decade as the government has failed to create a business-friendly environment and develop infrastructure. Without an increase in private investment the economic growth may not sustain in the long run.
“The scenario will not improve unless the Prime Minister intervenes,” said Mansur, also a former top official of the IMF.
Bangladesh's soft infrastructure -- which refers to all the institutions that are essential to the economy and the quality of life such as government, health, education, financial and legal systems -- has not improved at all, according to Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.
“Physical infrastructure has slightly improved in the last few years whereas soft infrastructure hasn't -- this is a major hindrance in doing business.”
Big businesses can achieve their goal at any cost but the small ones cannot as they have financial limitations, he added. Time has not passed yet to improve the country's ranking in the ease of doing business, said Kazi M Aminul Islam, executive chairman of the BIDA.
“Nothing can change overnight. It will take time to change the scenario. I believe in the near future Bangladesh will reach the double-digit ranking.”
It is true that two years ago the BIDA has taken a massive action plan after consulting with all ministries, relevant agencies and private sector stakeholders in order to reform some policies and provide services to entrepreneurs and investors.
“Still, I don't want to blame anybody because these two years were the initial stage,” said Islam, also a former top bureaucrat.
Investors in the economic zones do not face any bureaucratic hassles, said Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority.
“If the entities concerned become sincere and change their mindsets, Bangladesh will improve in the rankings rapidly,” he added.
