Reforms urgent before graduation

Complicated work procedures at government offices that retard service delivery is a legacy hampering the country's growth since its birth. The call for revamping and streamlining it by all concerned is also not new. But the self-serving, archaic system is so deeply entrenched that it still lives on. As a precondition for extending their development support, the UN bodies and various multilateral lending agencies have been recommending changes including reforms in this rigid  civil service procedures. Now criticism against this anti-progress, anti-growth bureaucracy is being raised even by countries and overseas business houses who have been tested partners in Bangladesh's development initiatives since long. Notably, some South Korean business houses first took an active interest in the country's textiles sector when the Readymade garment was a fledgling industry in the 1980s. Naturally, like other development partners, they have a stake in Bangladesh economy's better performance  so that overseas investors including their own companies might continue to show interest in doing business with Bangladesh.

In this connection, the South Korean ambassador to Bangladesh at a recent seminar styled 'Korea-Bangladesh Economic Cooperation' in Dhaka organized by the 'Foreign Investors' Chamber of Commerce and Industry' pinpointed some areas in the bureaucracy as well as policy that are acting as barriers to foreign direct investments (FDIs) in the country. For instance, the customs clearance procedure and visa rules for foreign investors were the areas that came under close scrutiny. In fact, it is a colonial notion that businesses whether local or foreign should experience the ordeal of a protracted approval procedure involving multiple desks and an inordinate amount of time before a cargo is cleared or a permission is issued. Those were not business-friendly times when such arcane rules and procedures were conceived and practiced. But despite all the calls for change and reforms, the systems thrives to the detriment of business at home as well as others who are willing to invest in Bangladesh. Though many local businesses might have resigned to comply with the existing order of things, why should one expect the same kind of allegiance from an overseas investor?

Given the long and tardy bureaucratic procedures to get any business deal done, the usual short-term visa for a stay of, say, 90 days, is definitely not a welcome approach to a prospective overseas investor. It was exactly such barriers to effective partnership with foreign businesses that figured prominently at the discussion event in question. Alongside the procedural aspects, some policies that successive governments adopted from time to time have often amounted to stymieing the economy's overall competitiveness with regional and international peers. The higher tariffs against imports, for instance, have proved to be disincentive for overseas businesses intending to invest in the country.  So, it is no surprise that at 0.75 per cent, Bangladesh's FDI-to-GDP ratio is the lowest in the region with India's at 1.7 per cent, while Southeast Asia's Vietnam at an impressive 4.7 per cent. These are the areas that call for urgent addressing from the government. As expected, the Korean diplomat's observations on these existing bottlenecks that slow down the pace of service delivery and thereby impact Bangladesh's business competitiveness could not have come at a better time, particularly when the country's graduation from the LDC category is on the doorstep. Needless to say, once exemptions from various tariff and non-tariff barriers that Bangladesh have been enjoying so far as a member of the LDCs are gone with its graduation, adequate preparedness should be there to face the challenges of a highly competitive global marketplace.

To survive and prosper in such conditions, it is the quality of the products and efficiency of a business trying to sell those will count. Now with all such non-business-friendly bureaucratic hangovers from the past still functional, the question arises if the government is really serious about entering that aggressive phase of business post-graduation. In the circumstances, time in hand must be utilized most expeditiously to enact required reforms before the graduation train arrives.