One-stop service caught in red tape | The Daily Star
12:00 AM, June 05, 2018 / LAST MODIFIED: 02:10 PM, June 05, 2018

One-stop service caught in red tape

Bangladesh lags behind its peers in the region when it comes to foreign direct investment (FDI). That hardly comes as a surprise given the amount of bureaucratic red-tape hurdles a prospective investor has to surmount before launching a business operation. As pointed out in a front-page report of this paper on June 3, “an investor needs up to a year and a half to get approvals from 42 desks of different government offices for starting a business, which according to the businesses is depriving Bangladesh of the much-needed foreign direct and domestic investments.”

The high cost of doing business remains the single biggest stumbling block to getting more investments from foreign sources. We find that neighbouring Myanmar, despite all its economic problems, got around USD eight billion in FDI (Bangladesh pales at USD 2.23 billion) and unfortunately, we have continued to drag our feet in streamlining our services so that the process of getting permissions is brought under one roof. Although it has been a year (May 8, 2017) since the government made a move to render many services to investors faster by bringing 16 types of services under one roof, through the passing of One-Stop Service Act 2017, the passage of the Act itself took a further 10 months.

This is why Bangladesh was placed 177th out of 190 economies in the “Doing Business 2018: Reforming to Create Jobs” report, brought out annually by the World Bank. Among the eight South Asian countries, Bangladesh topped only Afghanistan that ranked 183rd in the report. We scored 131 under the category “Starting a Business” (last year it was 122). The number of procedures involved was nine and the average time needed was 19.5 days. When it came to “Dealing with Construction Permits”, Bangladesh ranked 130th and we scored 61.97 out of 100 for dealing with construction permits. The number of procedures involved was 14.2 and it took a mindboggling 269 days to get them. Getting electricity remains a major stumbling block where it takes an investor nearly 429 days and nine procedures to complete. Registering property takes about 244 days.

Bangladesh Investment Development Authority (BIDA) remains handicapped in its roll-out of fast services despite the Act being passed into law. Apparently, things were supposed to get moving from June of this year but that has not happened. It is not just BIDA that needs to get its act together. Investors need to be able to get expedited services from a host of other agencies like Registrar of Joint Stock Companies and Firms, land registration, Bangladesh Bank, controller of import and export, the utility companies that provide gas, electricity and water. There has to be integration amongst all these agencies if we are talking about providing an effective “one-stop service”. Indeed, according to reports, there are no less than 18 government agencies that are still waiting in the wings to get on board the one-stop service.

So it all boils down to the willingness of civil servants to get the process moving along. Although much can be blamed on the slow pace in which the wheels of government move in the country, it goes against the very spirit of the current government's vision for a future Bangladesh. We have to be more proactive in solving these nagging problems if the vision of 100 special economic zones earmarked for development is to bear fruit anytime soon. If we wish to ensure a business-friendly regime, a string of reforms need to be initiated, including streamlining the registration process of companies, reducing the time and money needed to get licenses, and reducing the time it takes to get ownership of land.

That a prospective investor has to navigate 42 steps before starting a business is reason enough not to invest in Bangladesh. Other countries in the region have moved much faster than Bangladesh and we should understand that our international ranking is something that prospective investors look at before setting up shop here.

It is imperative that the reform plan undertaken by BIDA moves on the fast track through better interagency coordination and intense monitoring of reform efforts. We should seriously rethink those steps that have made starting a business more expensive by increasing the cost of business at the Registrar of Joint Stock Companies and Firms. The idea is to reduce the costs involved in starting a new venture, not increase them. And why must there be four different secretariats providing one-stop service? Why can't we have one super secretariat where investors can go to get their services? This agency can play the role of a coordinator with the other secretariats. The bottom line is, whichever agency becomes the principal authority to expedite and provide solutions to foreign investors, it must be given sufficient power and clout to tackle the bureaucracy in other departments. Otherwise, the country will continue to suffer from an image problem internationally.

Syed Mansur Hashim is Assistant Editor, The Daily Star.

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