According to the global standard Bangladesh does not belong to the league of highly competitive countries attracting investors. But neither is it a laggard trailing behind the tail enders. Slow but steadily, it is moving forward in the competitive business landscape in the world. This achievement has been made against several severe constraints which speaks volume for the resilience of the economy. The latest Global Competitiveness Report issued by the World Economic Forum (WEF) based on a survey has placed Bangladesh at 109th position which is one notch above the last placement in the Global Competitiveness Index (GCI).
A reasonable rate of growth of GDP (Gross Domestic Product), tolerable inflation, a stable foreign exchange rate, increasing flow of remittance, untapped investment potentials and a vibrant private sector are some of the favourable factors contributing to a healthy, if not a robust, business environment. All categories of entrepreneurs and business houses have demonstrated patience, persistence and innovativeness in making business and industries a success. Every year there are a good number of new comers among successful entrepreneurs drawing national and international accolade. From an import-dependent country Bangladesh economy has slowly become export oriented based on manufacturing and high-tech services.
The obstacles to higher competitiveness are, however, persistent and continue to hobble business. Top among the obstacles is inadequate infrastructure. Twenty-one per cent of the business units assessed in Bangladesh as part of the global competitiveness survey 2014-2015 identified inadequate infrastructure as the top barrier of doing business. In the last six years perceptions on general infrastructure noted little change. Although supply of electricity improved somewhat, infrastructure was relegated to the worst category among obstacles due largely to poor state of road transport. Congestion at sea ports has seen very little progress. The loss of money due to delay caused by poor transportation and communications hurt all kinds of business on regular basis. Though the government has been trying to improve infrastructures the efforts have so far been unable to close the gap between supply and demand. Expert analysts and the business community are unanimous that without adequate infrastructures quick progress in the GCI will remain elusive for Bangladesh.
Corruption has been identified as the second most critical obstacle to business competitiveness. There has been a slight improvement in corruption perception as a result of which it has dropped from first position last year. About 20 per cent of business surveyed has pointed this as an acute problem. In spite of commitment by the government, containing corruption has been a slow process and proved difficult to root out or rein in because of its all pervading nature. The fact that it has become institutionalised in many places makes it almost intractable. The slow and long procedures of disposal of corruption cases have not helped to improve the situation.
Corruption has been followed by inefficient governance as the next obstacle to business competitiveness. About 15 per cent of business houses and entrepreneurs identified absence of good governance as a constraining factor. Lack of good governance at desired level and degree involves delay in decision making and poor coordination among government agencies. Inexperience and over-cautiousness of government functionaries involved are considered to be the main reasons behind inefficient governance. Over centralisation of authority also contributes to this to some extent, according to many.
In the list of obstacles to strong competitiveness business political instability has been identified in the Report as the fourth negative factor. Political instability leads to policy paralysis and sporadic concentration by the government on priority programmes. Political turmoil caused by strikes, siege and street demonstrations make business unsafe rendering its future uncertain. Damage and destruction caused by political unrest adds to the cost of doing business. Though political unrest occurs occasionally it contributes to instability negatively impinging on business environment and prospects. Perhaps Bangladesh economy in recent years has been adversely affected by political instability more than on account of other obstacles. Its most insidious impact has been on business confidence. Only a consensus about the modus operandi among major political parties can bring about a positive change in this regard.
Access to financing at reasonable rates of interests, tax regulations, tax rates and restrictive labour regulations have been mentioned in the Global Competitiveness Report as other obstacles in Bangladesh. But it is the top three or four factors mentioned above that are considered as the most intractable problems for doing business in Bangladesh. An impression has gained ground that there is a lack of sustained determination to control or reduce the negative consequences arising out of the main obstacles at the top. It is high time for taking concrete measures to remove this perception.
