Ease of Doing Business Index

Ease of Doing Business Index

Md. Joynal Abdin

The Daily Sun on March 20, 2019

Ease of doing business ranking / index is one of the most discussed issues among the economies around the world. Probably it is one of the World Banks powerful reports that got attention of the governments around the world. Private sector is creating pressure on respective government to ensure required reforms to do better in ease of doing business index. Entrepreneurs / investors are taking decisions of respective investment in a country based on the ranking of that country in ease of doing business report. Countries like Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, C?te d’Ivoire, Turkey and Rwanda etc. took the issue seriously and introduced remarkable number of reforms to facilitate businesses. As a result, these countries performed better in the 2019 Doing Business Ranking. It is worth mentioning that, the BRIC economies namely Brazil, Russian Federation, India and China introduced a total of 21 reforms, with getting electricity and trading across borders etc. as the most common areas of improvement. Bangladesh government has deputed Bangladesh Investment Development Authority (BIDA) to coordinate ease of doing business reforms and a very high level committee at the Honourable Prime Minister’s Office is working to propose, monitor reforms required to do ease of doing business. But we are yet to get any result out of this movement here in Bangladesh. Before getting into further details of ease of doing business let try to have a look what it actually is.

 Doing Business Report presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies around the world. It holds a slogan every year. For example slogan of the 1st Doing Business Report in 2004 was ‘Understanding Regulation’ similarly slogans of the other editions were ‘Removing obstacles to growth’ in 2005, ‘Creating jobs’ in 2006, ‘How to reform’ in 2007, ‘Comparing Regulation in 178 Economies’ in 2008, ‘Comparing Regulation in 181 Economies’ in 2009, ‘Reforming through difficult times’ in 2010, ‘Making a difference for entrepreneurs’ in 2011, ‘Doing Business in a More Transparent World’ in 2012, ‘Smarter Regulations for Small and Medium-Size Enterprises’ in 2013, ‘Understanding Regulations for Small and Medium-Size Enterprises’ in 2014, ‘Going Beyond Efficiency’ 2015, ‘Measuring Regulatory Quality and Efficiency’ in 2016, ‘Equal Opportunity for All’ in 2017, ‘Reforming to create jobs’ in 2018 and finally it was ‘Training for Reform’ in the Doing Business Report of 2019.

If we would like to analyse all the themes of Doing Business Reports during the last 16 years, it started with Understanding Regulations in 2004. It is because before selecting one particular country, sector, or products an entrepreneur must understand applicable regulations of that particular country or sector or products. In absence of a congenial regulatory environment doing business is quite difficult and failure could be the ultimate destination. Therefore Understanding Regulations, the initial slogan of Doing Business Report 2004, was very much justified. Later on Removing obstacles to growth, Creating Jobs, how to reform etc. all slogans were very much identical, justified and torch bearing. Very recent slogans like Reforms to create jobs, Training for reform are very much indicative and timely direction.

Doing Business Report Analyses 11 indicators affecting the life of a business. These are starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and features of labour market regulation.

According to the Doing Business Report 2019 Bangladesh raked at the 176th position among 190 countries. If we would like to know indicator wise ranking of Bangladesh then we see, Bangladesh’s position in starting a business is 138, dealing with construction permits is 138, getting electricity is 179, registering property is 183, getting credits is 161, protecting minority investors is 89 (only single digit performance), paying taxes is 151, trading across borders is 176, enforcing contracts is 189 (worst performing indicators), and resolving insolvency is 153.

From the above rankings it is quite clear that, enforcement of contracts is quite difficult here in Bangladesh. It is because we have a long history of case jam in every avenues of our judiciary. We have many types of windows to look after the criminals based on his / her nationality, race, political faith, economic power, muscle powers so on and so forth. We have to enact and enforce an equal treatment for every local or foreign investor so that, enforcement of contract become 100 per cent transparent, quicker, effective and less costly. Without an even playing filed for local and foreign investors, we will fail to get attention of foreign investors to come and invest here in Bangladesh.

Registering property, getting electricity, trading across border etc. issues has to get highest priority to perform in ease of doing business index better than our existing position. Our bureaucratic society has a tendency to make the report controversial by asking number of respondents, sample size determination process, sample selection criteria etc. methodology relevant issues. But it is worth mentioning that getting electricity connection to a small rice / oil mill in a village is a very difficult task till date. It took such a long time that the entrepreneur became old by this processing time if he / she cannot give some illegal processing fees in every table. Similarly, trading across border needs such a long list of documentations licences and NoCs that it requires dedicated specialised professionals to maintain it. How an SME products will be exported after compliance of too many legal, procedural and documentary requirements. The entire process has to be eased up for the sake of private sector development, job creation, and inclusive development of the society.

Bureaucracy has a tendency to keep everything in their grip, as though the country will be destroyed if an entrepreneur is allowed to run his / her businesses without too many licences and permissions from them. As a result many reform movements did not get into the sunlight earlier. Most complex situation arises when a former bureaucrat enters the cabinet and gets chance to make laws and respective regulations. Toughest and most complex laws cannot give us assurance of inclusive development till it is not easy to adopt by the mass people.

We have one hope from the current government with so many cabinet members are from the private sector leadership like honourable commerce, industry, finance, land, public works, jute & textiles ministers. Hope they will look after the ease of doing business with a soft corner from respective ministries and Bangladesh will take a justified ranking in upcoming Doing Business Reports in the year 2021 or 2022.

Why ease of doing business is essential? It is essential to grow a dynamic private sector in any economy. Without a dynamic private sector creating jobs, maintaining economic growth, ensuring inclusive development is impossible. Without inclusiveness development will not be sustainable in any society. Therefore Doing Business captured a record 314 regulatory reforms around the world between June 2, 2017, and May 1, 2018. Worldwide, 128 economies introduced substantial regulatory improvements for making it easier to do business in all areas measured by Doing Business. If everybody eases up respective regulations to make business easy and we remain steps behind, nothing will happen by offering too long list of fiscal and non-fiscal incentives to the local and foreign investors because rent seekers will charge a substantial amount to provide all these fiscal and non-fiscal incentive to the applicants.

It is time to digitalise the processes for making thing easy and transparent. If stakeholders cannot avail the benefits in a hassle-free manner, has to entertain the rent seekers then no government initiative can offer uniform result to make an inclusive and sustainable financially developed Bangladesh by the year 2041 or beyond. Vision 2021, 2030 and 2041 will not have any impact on the daily life of mass and ordinary people of Bangladesh.