The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and the Policy Exchange Bangladesh (PEB) in a joint survey said the prevailing business climate in the fiscal year 2023-24 has worsened, much to the disappointment of the business community. The survey was conducted and scored on a matrix of 11 key indicators that measure the physical condition of the business environment of the country.
According to media reports, the areas covered include initiation of business, land availability, access to legal information, infrastructure, labour regulations, dispute resolution, trade facilitation, tax payment, technology adoption, credit availability and environment regulations and standards.
There have been talks about reforms for decades. Only recently some of them are being implemented too because of the insistence of foreign money lenders like the International Monetary Fund (IMF). Though a lot of hope has been placed on the Bangladesh Investment Development Authority (BIDA) to bring foreign direct investment (FDI), it is alarming to see that domestic private sector investment is not rebounding.
The survey reflects the reality of the business environment prevailing in the country. It needs to be heeded primarily because it is conducted by entities that have credibility in the business community. It may also serve the policy makers to act on. Because these are not areas of contention rather they are bottlenecks that need to be resolved.
Reportedly, the business environment has suffered in the current fiscal year compared to last fiscal. The overall score has slipped down to 58.75 in 2023-24 from 61.95 in the previous fiscal. This has come about because of securing bank loans was much harder as the banks are amid liquidity shortages and extra cautious because of their high burden of non-performing loans (NPLs)
Unless the problems are treated with the seriousness they deserve, it will be difficult to unlock the nation’s economic potential. It needs strengthening of the financial system that involves the enhancement of legal and regulatory frameworks, boosting institutional governance and re-establishment of good governance. Unless good governance re-establishment, many key indices will keep slipping.
