Bangladesh needs to improve its ranking in the World Bank’s Ease of Doing Business index in order to achieve double digit GDP growth in the years ahead, analysts said yesterday.
The country’s ranking jumped eight notches to the 168th in the 2020 index from the 176th in the previous year.
“But there is no scope to be complacent,” said Shafiul Islam Mohiuddin, the immediate past president of the Federation of Bangladesh Chambers of Commerce and Industry.
“We have to achieve double digit GDP growth and Bangladesh has a long way to go,” he said.
After the Rana Plaza collapse, a large number of export-oriented industrial units completed retrofitting, but they have yet to manage desired funds spent on the upgradation due to bureaucratic tangles, Mohiuddin said.
“We have to avoid such complexity in the interest of ease of doing business,” he said at a seminar styled “Ease of doing business: way forward” at the Westin hotel in the capital.
The Bangladesh Chamber of Industries (BCI) organised the event.
The WB has not accepted some development reports from Bangladesh related to the index, said Md Mosharraf Hossain Bhuiyan, chairman of the National Board of Revenue.
The country’s ease of doing business index would have shown better ranking than the existing one had the multilateral agency accepted the reports, he said.
The speakers said the SME sector, especially light engineering and agriculture processing industries, could play a vital role in realising the untapped potential of the country.
Anwar-Ul-Alam Chowdhury Parvez, president of the BCI, while presenting a keynote, said Bangladesh has been posting good GDP growth for the last few years, but there have been some sorts of challenges to move the economy forward.
More than 40 percent of the total workforce is unskilled, which should be addressed by the authorities, he added.
He said around 75 percent of the national exports enjoy duty-free market access as Bangladesh is a least developed country, but the preferential treatment will be withdrawn between 2024 and 2027.
“So, Bangladesh should sign free trade agreements with different countries to cope with the challenges,” he said.
The global market of light engineering is worth around $7 trillion, but the country’s export earnings from the sector stood at only $319 million in fiscal 2018-19.
The same situation prevails in the agro-processing industry: the sector fetched $908 million from the global market of $1.6 trillion.
On the other hand, Bangladesh’s peer countries – Thailand and Vietnam –export agriculture products worth around $40 billion and $35 billion respectively.
The country should also focus on halal goods as the global market of the products will reach $10.51 trillion by 2024 from $2.7 trillion in 2016, according to Parvez.
All major economic indicators, including export, import, remittance and foreign direct investment, show that Bangladesh now enjoys the middle-income country status, said Rokia Afzal Rahman, vice-president of the International Chamber of Commerce Bangladesh.
“But shortage of skilled labour is a serious concern for the economy. And we should address the issue,” she said.
The light engineering sector is doing well, she said, adding: “We can allow back-to-back letters of credit for the light engineering sector to help it expand further.”
The agriculture processing industry as well as the halal goods sector also needs support from the government, said Rokia, also a former caretaker government adviser.
“Our demographic dividend will be depleted by 2035. So, we should complete our development programmes within the period,” said Md Abul Kalam Azad, principal coordinator for SDG affairs at the Prime Minister’s Office.
The government allocated Tk 100 crore for start-ups in the current fiscal year, but there is a question how much of the fund has so far been disbursed, said Selima Ahmed, a lawmaker and also the president of Bangladesh Women Chamber of Commerce and Industry.
“Drawing up new policy or giving budget allocation is not enough. The government should implement its policy and use allocated funds successfully,” she said.
Commerce Minister Tipu Munshi said it was unfortunate that the country is on course to falling to the third position in global apparel exports from the second place.
“We have to start the process of signing FTAs on an emergency basis,” he said.