The country is yet to see tangible results from the merger of two entities -- the Board of investment (BoI) and the Privatisation Commission (PC) -- into an integrated new outfit even after one year of its birth. The new organisation is still trying to set its own house in order with policy reforms and bringing coordination among stakeholders, according to an FE report late last week.
The objective of the new entity -- Bangladesh Investment Development Authority (BIDA) was to facilitate investment through One-Stop Service (OSS). But absence of a relevant law, it is yet to launch such full-fledged service.
The BIDA is empowered to privatise loss-incurring state-owned enterprises (SOEs) worth up to Tk 1.0 billion on its own initiative. It has not taken any initiative to offload any such entity in the last one year since its inception.
The BIDA authority, however, says policy reform is a priority of the agency to improve the country's doing-business indicators in World Bank (WB) report. A total of 110 reforms are required to improve the country's doing-business status in WB rankings in order to introduce OSS.
For this purpose, the government needs to amend the Companies Act which is a prerequisite for removing bottlenecks affecting investment. Coordination of different entities including Registrar of Joint Stock Companies and Firms and power-supply board is also necessary for expediting the process of policy reforms.
BIDA set a target to improve some of the country's doing-business indicators by May 2018. It planned to improve the country's position to 99th from 176th by 2020 and upgrade its position at least 20 positions every year. In the latest WB doing-business report, Bangladesh ranked 176th out of 189 economies across the world.
During the last one year of its existence, BIDA-received Foreign Direct Investment (FDI) rose to US$ 2.9 billion from $2.2 billion and local investment proposals to $13.5 billion from $ 10 billion. A number of investment proposals are underway, including automobile, agro-machinery, plastic waste and active pharmaceutical ingredients (API). BIDA claims it is moving ahead with a plan to establish economic corridors with all facilitates including medical facility, residences of workers along with many workplace facilities.
Back in March this year, BIDA pledged to launch a full-fledged and functional one-stop service (OSS) in next six months for the foreign investors. It was supposed to be functional this month. But nothing is being heard about it so far. On its part, BIDa claims the government is at the final stage in formulating OSS Act and it will be available soon. Until OSS takes a final shape, analysts say, the BIDA can only sign Memorandum of Understanding (MoU) with the other ministries to work together on investment promotion.
However, once the OSS is launched, investors need not come to the BIDA office and around eight other organisations to get approval for making investments in Bangladesh. All they will need to do is to file application online. Approval from BIDA, along with some eight other organisations, including the land and environmental authorities, will be provided based on the application.
The BIDA was supposed to conduct studies on 10 different sub-matrices related to ease of doing business. It was scheduled to finalise a plan of action in consultation with stakeholders including ministries, private sector, trade bodies and experts from local and international development agencies. Each implementing ministry and agency will have an implementation plan.
According to the draft action plan, the ministries and agencies will have to improve the fields where the country lagged behind in doing-business status including regulatory affairs, taxation, starting a business, getting credit and electricity, enforcing contracts, number of procedures in starting business, protecting minority investors and trading across borders.
Currently, BIDA is housed in an under-construction building in the capital's Agargaon. The place, with no reception counter to attend investors, is not an investor-friendly one. After getting the new law passed, the single-point service centre would be established at the new BIDA office with financial support from the WB and the International Finance Corporation (IFC).
BIDA claims even the current system has brought down significantly the time for getting utility services. An investor is now getting power connections in 28 days and the construction permit by 60 days, which were earlier 400 days and 269 days respectively. There were instances that some companies had to wait for more than two years to get electricity connections and wait for four to five years for starting their operations in Bangladesh after submitting applications.
As there are many ministries involved in the process, a "cooperative" approach and "accountability" of each ministry as a team member would be needed. Each ministry must be committed in a way that its performance can be monitored.
Land scarcity is indeed a big problem for the investors to set up new industries. BIDA aims at addressing this particular problem. Keeping in mind the barriers often put by ministries to productive use of public land by setting up industries, the proposed law stipulates formation of an execution committee of investment-related projects. It will take decision on land use in meetings with all stakeholders so that no barrier remains at a later stage.
The state-owned enterprises (SoEs) have large areas of land at their own premises. Reportedly, BIDA is chalking out a plan on how to meet the investors' demand for land once they make registration for investment. The lands of the SoEs have in-built facilities like roads, gas and electricity and investors may utilise these quickly. One wing of the new body is handling investment proposals while another will line up land and take steps for allocation to the genuine investors.
There is no denying that only hundreds of readymade garment industries would not lead Bangladesh to a high-income country by 2041. To attain the target, per capita income has to be increased to $12,000 from the present $1,450, and it's a huge ask.
In order to elevate the income level and lead the country to a high-income one, Bangladesh requires huge investment, both domestic and foreign. In this regard, BIDA has to play an all-important role.