Despite an immense opportunity, the recent foreign direct investment (FDI) doesn't look up to the mark due to some non-fiscal barriers. On the contrary, the current unemployment rate of Bangladesh is 4.20 per cent and about 2.0 million fresh graduates have been joining the unemployed per annum putting much pressure on the local job market.
Therefore, this is the right time to redress FDI obstacles once for all and commit to streamline the entire process towards lifting the indicators prescribed by the ease of doing business (EODB) of the World Bank Group (WBG). The WBG reviews the score annually based on 11 indicators like Starting a Business, Employing Workers, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, Resolving Insolvency and finally Contracting with the Government. However, the scores of our business rivals like China, India, Vietnam, Pakistan, Cambodia are 31, 63, 70, 108, 144 respectively in EODB-2020 review, where Bangladesh secured 168 position this year --- up by eight notches from 176 in 2019 --- out of 190 economies in the world.
Now to raise the FDI ranking, the ease of doing business index has to be brought under double digit putting all efforts as it is undoubtedly the major instrument to create employment and supply currencies as fuel to the national exchequer. Thus, it will be unwise if we cannot streamline all the tiers mostly of the day-to-day operations in trade (e.g. export & import), which is the most important indicator among others set by the WB's EODB.
Again, Bangladesh ratified the WTO's Trade Facilitation Agreement (TFA) to make cross-border trade paperless, contactless and faceless. The trade applications focus on expediting the automated customs clearance and delivery (import) or dispatch (export) from/to the port. But the country needs robust improvement and action plan or corrective action plan (CAP) for WTO, TFA alongside cross-border e-commerce measures for greater score of EODB as competitors are more aggressive over these issues. It is linked with the World Bank's two indicators stipulated earlier like paying taxes, trading across border under broader aspect of dealing with day-to-day operations.
The implementation of TFA will create a significant opportunity to improve the speed and efficiency of border procedures, thereby reducing trade costs and enhancing participation in the global value chains as well.
So, without adaptation, we will lag behind others in the race of FDI attraction although we offered plenty of fiscal and non-fiscal benefits for foreign investors which made us less costly in doing business in the world. However, the full implementation of all aspects of the TFA will be the biggest challenge for us with our elevation as a lower middle-income nation. Meanwhile, in compliance with WTO, TFA, Bangladesh has already formed a committee called the National Trade and Transport Facilitation Committee (NTTFC) comprising representatives from relevant ministries, departments and trade bodies under the chairmanship of the Commerce Minister. In this area, the NBR has been playing an important role in improving their regulatory and operational affairs towards ease of doing business.
The writer is a trade logistic analyst.