MNCs favour predictable govt fiscal policy

The need to facilitate multinational corporations (MNCs) by ensuring a predictable and supportive operational environment is becoming increasingly urgent. A recent meeting between MNC representatives and the Chief Adviser highlighted several pressing concerns that warrant immediate government attention. More than a dozen MNC representatives emphasised the importance of predictability in fiscal policies and the need to improve the overall ease of doing business. Their calls for action underline persistent challenges, including a lack of sufficient consistency in government policies and barriers that hinder seamless business operations. Among the core issues raised, the demand for predictability in licensing and taxation stood out prominently. The MNC representatives also advocated for streamlining procedures through a more effective one-stop service at the Bangladesh Investment Development Authority (BIDA) and improving the country's credit rating to attract foreign direct investment (FDI). While these concerns are interconnected and geared to fostering a business-friendly environment, predictability in government policies emerged as the cornerstone for enabling sustainable operations. Predictability is crucial for businesses to plan effectively. Stable and transparent policies empower firms to devise long-term strategies for production, marketing, and expansion. Frequent policy shifts, on the other hand, create uncertainty, making it nearly impossible for businesses to develop coherent operational plans. Such unpredictability not only hampers business performance but also erodes investor confidence.

 The need to enhance the services of BIDA through an effective one-stop service is long awaited. Establishing such a service can significantly reduce bureaucratic delays and inefficiencies, making it easier for businesses to navigate regulatory requirements. This step would not only streamline operations for existing investors but also enhance Bangladesh's appeal to prospective investors, particularly in an increasingly competitive global market. Equally important is improving the country's credit rating. A higher credit rating signals a stable economic environment and boosts investor confidence, encouraging FDI. Addressing this issue requires coordinated efforts devoted to strengthening macroeconomic fundamentals, reducing political risks, and demonstrating consistent policy implementation. This task has become particularly urgent in view of the latest downgrading of credit rating for Bangladesh by the Moody's.

The meeting also dwelt on other critical factors affecting business operations in the country. Deteriorating law and order, which disrupts supply chains, was a significant concern. A stable security environment is essential for maintaining efficient operations, particularly in industries reliant on robust logistics and distribution networks. Energy security was another major issue raised. Frequent energy shortages have long been a bottleneck for both local and foreign firms, affecting productivity and operational costs. The MNC representatives urged the government to prioritise energy infrastructure development to ensure reliable and affordable access to power, a key enabler of industrial growth. A fair and equitable business environment was also a subject during the discussions. The MNCs voiced their concerns over what they perceived as discriminatory practices in determining tax burdens and market shares. Such disparities, they argued, create an uneven playing field, deterring foreign investors and undermining healthy competition.

The concerns raised by the MNCs underscore the urgent need for policy consistency and supportive business environment that will not only ease their business operations but also catalyse broader economic growth of the country.