Entrepreneurship development: Hurdles along the way

Aspiring entrepreneurs in Bangladesh face a mountain of hurdles thanks to the intricacies involved in getting necessary licenses, permits, etc. from the bureaucracy that is anything but pro-business. Let's face it. For entrepreneurship to thrive, one doesn't need endless seminars and roundtable conferences. What is needed is a government that is cooperative and understands the need for smart regulations that is easily accessible for start-up companies and individuals. It is only natural that entrepreneurship has thrived in the developed economies. As stated by entrepreneurship professor Solomon of George Washington University it was only “in the 1970s and 1980s, the concept of entrepreneurship was just being hatched. It's been growing by leaps and bounds since, of course. By contrast, entrepreneurial ecosystems in many other countries aren't established yet. They haven't developed a support system at government agencies, universities or among the private sector.”
Yet despite these problems that are all too prevalent in Bangladesh, one is pleasantly taken aback to find a product originating in some obscure part of Bangladesh on a supermarket shelf in the West. As a columnist wrote recently from Maryland, USA, “at first, I thought it was misspelling! But then, I did not expect this sub-district, the northern-most tip of Bangladesh, one half of the iconic phrase 'From Teknaf to Tetulia' to have anything to do with my neighbourhood grocery in a suburb of Maryland, USA. But there it is, occupying a small part of the tea shelves in Whole Foods, a new brand called Teatulia. As I turned the canister, containing a medley of Teatulia tea, I got half the connection - the tea had come all the way from Bangladesh. As I googled later, the other half was revealed; the tea came from an organic farm in the Tetulia region of the greater Dinajpur district [...] Right now Teatulia occupies only a small space on the shelves of my favourite grocery. But that's exactly how the Bangladeshi garments started their journey twenty or so years ago!”
There it is. Entrepreneurial spirit knows no bounds they say. But for every success, there are hundreds that do not make it but we never get to hear their ending. It is truly unfortunate that policymakers do not take cognizance of the fact that numerous micro and small firms in the country generate most of the jobs.
Unfortunately, many are shutting down businesses or thinking of relocating to other countries with friendlier regulatory regimes. One business in IT industry (that wishes to remain anonymous for obvious reasons) that has of late been recognised for its innovativeness and contributions recently has been hounded and harassed by tax officials.
The management came clean on allegations of tax evasion - a laudable step, one which cost the management weeks of precious time and a huge amount of staff time. The point being made here is that no one contends that the taxman has every right to ask for financial dealings of any establishment, but why go after only the low hanging fruits?
Fledging companies invariably face such hurdles, small time businesses that do not possess dedicated manpower to look after such matters. The other business is involved in making dresses locally and has issues with the government's tax policy favouring imported garments from India and Pakistan. With government charging VAT @5% on the local producers, whereas it charges a mere 1.5% on the importers of readymade dresses - immediately puts local producers, who are by and large small entrepreneurship businesses at a disadvantage.
Doing business has become frustrating for a local consulting firm too. This company does not get any response on the proposals submitted to the government and non-government entities. The management is not willing to throw away their hard-earned reputation for quality and integrity.
So the management keeps away from paying hefty speed money and does not engage in backdoor negotiations. Slowly but surely, this firm is turning to international market and winning bids to work in India and other countries through competitive process. The firm is thinking now to take the business out of the country.
It is therefore not surprising to find Bangladesh ranked 129th out of a possible score of 185 economies surveyed by International Finance Corporation's Doing Business 2013 in terms of Business Environment. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and employing workers.
Hence when Bangladesh ranks 185th trying to get electricity to power up a business, or, when it takes an average of 175 days to register a new business compared to India's 94 days, or 21 days in case of Nepal, it certainly does not inspire confidence for a budding entrepreneur. Is it not time that the government starts to pay attention to the micro and small enterprises? Thousands of these businesses prop up daily and a similar number close their doors to business.

The writer is Assistant Editor, The Daily Star.