Bangladesh prodded to 'reposition’ itself to improve business climate

The technical advisory committee of the Bangladesh Investment Climate Fund, BICF, has met for the first time with the observation that Bangladesh needs to “reposition” itself to meet the new challenges.

The BICF which was formed in 2007 is running into its second phase to help the government address “constraints related to regulations, industrial infrastructure and sector competitiveness and trade facilitation for greater export diversification”.

Bangladesh targets to be a middle-income country by 2021.

The World Bank Group has partnered with the new state entity Bangladesh Investment Development Agency, BIDA, for this technical assistance project funded by the UK’s development arm, DFID.

The BICF's 12-strong technical advisory body is drawn from bureaucrats, foreign and local investors, regional businesses, women entrepreneurs and professionals, cross-cutting financial sector, media and civil society. BIDA Executive Chairman Kazi M Aminul Islam is its Chair.

Aminul Islam, in the first meeting on Sunday, urged the private sector to raise their issues and help the government pursue its goals.

“We need to reposition ourselves as challenges are different now,” he said, adding that the targets and goals of the SDGs are so “enormous” that challenges are “multi-diversified”.

“We have achieved MDGs, but that does not mean that we’ll achieve the SDGs automatically,” he warned.

“We have to pursue the dual goals -- dealing with the country's goal to be a middle-income country by 2021 and the global goal of SDGs. So we’ll need quality growth which is totally different than the MDGs,” he said.

“We have to stimulate the private sector so that they can create jobs.”

Earlier in January, BIDA announced major reforms in several sectors in its bid to lure in both local and international investments by doing better in the World Bank’s ‘ease of doing’ business ranking.

The new executive chairman set an ambitious goal of improving Bangladesh's ranking in the index to below 100 from the current 176 in the next five years.

BIDA will introduce ‘one stop shop’ by next year and will have offices in all divisional headquarters to take the investments to the Upazilla and district level.

BICF Senior Economist Masrur Reaz, who is member secretary of the advisory committee, said BIDA’s target is “doable”.

“This is not impossible”,’ he said. “If they can do that, it’ll be a massive signal to the world that Bangladesh is working hard to change the business environment.”

“Bangladesh aspires very rightly to be a fully middle-income country,” Reaz said, but for that to happen, it needs to achieve some targets including creating 2.2 million jobs per year from the current level of 1.2 million.

Also, he said, the exports should be nearly $55 billion from the current $31 billion. “It also needs to break some barriers including diversifying the export basket."

The economist explained the BICF programme and said it has “three pillars”.

“Pillar 1 is to improve the core business operating environment, pillar 2 is to support private investment in industrial infrastructure and pillar 3 is to enhance sector competitiveness and export diversification.”

Reaz said they have done the initial analysis of what needs to be done to improve in the ease of doing ranking.

“BICF will continue to identify what is needed to be done in light of the ground reality. We will take another look in two years to see what new needs to be brought in."

Changing mindset is the key

Among the members of the advisory body, President of the Dhaka Chamber of Commerce and Industry Abul Kasem Khan, President of the Foreign Investors’ Chamber of Commerce and Industry Rupali Chowdhury, Director of the Chittagong Chamber of Commerce and Industry Mahfuzul Haque Shah, CEO of IDLC Finance Limited Arif Khan, Adviser to Business Initiative Leading Development Asif Ibrahim, bdnews24.com Editor-in-Chief Toufique Imrose Khalidi, and President of the Metropolitan Chamber of Commerce and Industry Nihad Kabir were present.

They said implementation would be the major challenge of the BIDA’s reform plans and identified the “lack of coordination” among the government agencies as the main bottlenecks.

They insisted on changing the mindset and attitudes of the government officials in delivering services.

Mahfuzul Shah said he is “frustrated” as his long-standing concerns have not been addressed.

“I personally raised the issue of bottlenecks in the Chittagong port over the last five to six years, but those were never addressed,” he said, highlighting “the absence of coordination” between the NBR and the authorities in the country’s biggest port.

“We make plans, but practically do not see those getting implemented,” he said, “I have lost hope.”

The CCCI director said he cannot see how the export targets could me achieved if things continue to be as they are now.

Toufique Khalidi said the attitude of those tasked with delivering services has to change. “We cannot accept both -- their attitude or incompetence and their being corrupt.”

“It is important for civil servants– whom Mr Islam (BIDA chairman) or others like him lead -- to understand that they are there to serve... and that the people on the other side of their desks are actually buying their service, not begging them for any favour,” he said.

Asif Ibrahim said top bureaucrats always get excited and want to make it happen when it comes to any reform.

“But when it comes to implementation, (the lack of) inter-ministerial coordination stands in the way,” he said.

“On the ground, there are some sort of resistance when it comes to introducing new things. Change of mentality would be the first thing that needs to be addressed,” he said.

Nihad Kabir said she found that government officials tasked to give approvals do not always go by the law. She sought a high-powered “ombudsman” where one can lodge a complaint.

Arif Khan lauded the BICF’s initiative as “important and timely”.

He, however, said officials on the ground will do better when they will know that there is a political aspiration about those reform issues.

BIDA Chairman Aminul Islam said they understand that their target is “a business which is not as usual and failure is not an option”.