Bangladesh has reasons to be elated by the outcome of this year's ' Ease of Doing Business' report of the World Bank (WB). For, it has moved eight notches up in the Doing Business Index -- an unprecedented single-year improvement. Yet the celebration over the achievement may not be that high-pitched one because others in South Asia save the conflict-torn Afghanistan and peer countries have done far better. Moreover, in majority of the areas that have notable impact on business activities, Bangladesh still lags far behind and it needs to make improvement at a fast pace to catch up with competing nations and materialise the dream of achieving the double digit ranking improvement.
However, there should be no reason for considering the progress as insignificant one because the country was stuck at the bottom of the ladder. The improvement in ranking by eight notches does highlight the fact that the relevant issues are being addressed more seriously than before at the policymakers' level. The government claims to have initiated legal and other reforms that are linked to the business activities, and the improvement in ranking, according to the policymakers, has much to do with the upbeat. However, the country's future scorecards would prove how effective the reforms have been.
Undeniably, piecemeal reforms, in most cases, do fail to deliver results up to the desired level and also in a sustainable way. For instance, the 'Ease of Doing Business' report shows that Bangladesh has done remarkably well in ensuring access to credit; it climbed 42 steps in a matter of only one year. Despite this big improvement, the private sector credit had grown well below the targeted level during the last one year or so. This was because of the existence of various other obstacles to business and investment activities.
Bangladesh's performance in seven other areas that the WB index in question takes into consideration has not been satisfactory and situation in at least four of those has been pretty bad. The country needs to make notable improvement in these areas and beyond if it really means business in the task of ensuring a climate conducive to business and investment. The truth is Bangladesh can do it. If neighbouring India, which has a situation almost identical to that of Bangladesh, and Pakistan a worse one, can climb 14 and 28 steps respectively in the WB index, there should be no reason why Bangladesh cannot make similar progress.
The country needs to make wholesale regulatory reforms along with a thorough change in the attitude of the bureaucracy. Reforms in regulatory measures would make things easy for businesses and a cooperative bureaucracy even easier. The areas of reforms are many. The relevant authorities will need to select priority areas and act on those. However, reforms would be of no meaning if the quality of governance is not improved and graft goes unchecked at all levels.
The government could cut fees, charges and other costs in relation to procuring permissions, contracts and certificates, but it is equally important to eliminate other hassles, financial or otherwise. Once that is done, the country would find the act of scaling up the 'Ease of Doing Business' and similar other ladders smooth and easy.