The Bangladesh Investment Development Authority (BIDA) started functioning on September 01, 2016 amid much publicity by replacing two defunct statutory bodies, namely the Board of Investment (BoI) and the Privatisation Commission (PC). One of the arguments put forward by the initiators of that move was that BoI and PC had become stagnant after remaining in operation for over three decades, and so should be replaced by a new entity having new name and new identity in order to infuse new dynamism into the country's investment-cum-privatisation scenario. But in effect, what the initiators really did was to replace two former bureaucrats at the helm of BoI and PC by another one as the head of BIDA. Even the officials of BoI and PC, mostly comprising deputed civil servants, were absorbed in the new authority. And now after three years of media hype and clamour surrounding the new body, the results are visible for everyone to see. The whole exercise has pretty much boiled down to the Shakespearean quote: "What's in a name? That which we call a rose by any other name would smell as sweet."
Let us recall what was said during the initial stages of BIDA by concerned officials. During a national consultation with stakeholders at a five-star hotel in Dhaka in November 2016, the BIDA officials led by its executive chairman bragged to the media that their target was to put Bangladesh among the top 100 countries in the 'Ease of doing business' index of World Bank and raise the GDP (gross domestic product) growth rate to double digit within 2020. The country's ranking in the doing business index at that time (2016-17) was 176. But instead of improving, it fell to 177 during 2017-18, and then everything was back to square one when the ranking rose to 176 in 2018-19. Consequently, the standing of Bangladesh in the 'ease of doing business' remains the same since BIDA took over as the country's investment authority. The latest ranking has been even worse in the sense that Bangladesh now has the dubious distinction of being the worst performer in South Asia. Significantly, Bangladesh's best ranking in the index was 115 in 2008, but it made a steep fall from 130 in 2013 to 172 in 2014.
Let us now examine the performance of Bangladesh in the 10 out of 11 indicators evaluated across 190 economies in 2018-19. Overall, Bangladesh's score was a dismal 41.97 out of 100 against the regional average of 56.71 for South Asia. The first indicator was 'starting a business', which is measured by the procedures, time, cost and minimum capital to start a limited liability company. Bangladesh's ranking in this criterion was 138. The second indicator was 'dealing with construction permits', which is measured by the procedures, time and cost to complete all formalities to build a warehouse, and the quality control cum safety mechanisms in the construction permitting system. Bangladesh's ranking in this criterion was again 138. The third indicator was 'getting electricity', and Bangladesh's ranking in this indicator was 179. The fourth indicator was 'registering property', which is measured by the procedures, time and cost to transfer a property and the quality of land administration system. Bangladesh's ranking in this area was a terrible 183. The fifth indicator was 'getting credit', which is measured by the movable collateral laws and credit information systems. Bangladesh's ranking in this yardstick was 161.
The sixth indicator applied by the World Bank was 'protecting minority investors', which is gauged by minority shareholders' rights in related-party transactions and corporate governance. Bangladesh's ranking in this criterion was 89. The seventh indicator was 'paying taxes', which is assessed by payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes. Bangladesh's ranking in this criterion was 151. The eighth indicator was 'trading across borders', which is measured by the time and cost to export the product of comparative advantage and import auto parts. Bangladesh's ranking in this indicator was 176. The ninth indicator was 'enforcing contracts', which is measured by the time and cost to resolve a commercial dispute and the quality of judicial process. Bangladesh's ranking in this indicator was 189, one of the worst in the world. And the tenth indicator was 'resolving insolvency', which is measured by the time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency. Bangladesh's score in this yardstick was 153.
Let us now look at some other commitments made by the BIDA top brasses that remain unfulfilled. Soon after taking over, the BIDA boss asserted that "the investment environment in Bangladesh will witness a big change soon". But apart from launching some fragmented one-stop services, hardly any change has been observed in the investment procedures. Even the BIDA website is not being updated regularly, let alone run it in a professional manner; it contains mostly out-of-date news items and notifications. Investment promotion materials including books, brochures and multimedia materials produced by BIDA also remain inadequate. There has been minimal impact of the numerous road-shows, seminars and conferences organised by BIDA at different spots of the globe. As a consequence, private investments as a percentage of GDP (gross domestic product) has remained stuck at 23 per cent since 2016-17.
The BIDA executive chairman had pledged at a meeting with chamber leaders back in October 2017 that it would recruit half its manpower from the private sector to become more business-friendly. But no visible move has been observed yet in this direction. Many observers feel that this dependence on bureaucrats and ex-civil servants for running the country's investment authority appears to be the biggest contributing factor in the failures of both BIDA and its predecessors. It is high time the government realised this and took remedial measures for the sake of bringing dynamism in the country's investment authority and making it more business-friendly for private investors.
Dr. Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly.