It is highly disconcerting that the latest study conducted by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and the Policy Exchange Bangladesh (PEB) has said, starting a business, flow of regulatory information, infrastructure, paying taxes and other issues salient to business and investment became more difficult in Bangladesh during the outgoing FY24.
The study was conducted based on a matrix of 11 key indicators that measures the health of the business environment of the country. Compared to the previous fiscal year, the aggregate composite business climate score dropped to 58.75 from 61.95 in FY23. This is just one recent study report from MCCI and PEB. This must be a wakeup call for our policymakers that, despite efforts to enhance our business climate, realities continue to be far different to expectations.
Although there have been some improvements in a few indicators, the negatives outweigh the positives inexplicably. The great concern in conducting business was the fact that the country scored dismally in credit availability. Because getting bank loans is much harder as the banks are extra cautious due to their high burden of non-performing loans.
A positive business environment is enabled by action on policies rather than sitting on them. Reforms have been talked about for decades but only recently some of them have been implemented because of the insistence from the international lenders like International Monetary Fund (IMF). While a lot of hope has been placed on foreign direct investment, it is alarming to see domestic private investment not rebounding. The MCCI recommends improving infrastructure and logistics, strengthening financial systems, enhancing legal and regulatory frameworks, and particularly, bolstering institutional governance.
Unless the problems are treated with seriousness, it will be increasingly impossible to unlock the nation’s economic potential. In particular, if good governance can’t be re-established, many key indices will keep slipping.