India’s stunning jump in World Bank’s business ranking sends ‘a lesson to Bangladesh’: Trade bodies

India’s stunning improvements in the World Bank’s ‘ease of doing business’ index has sent a message to its neighbour Bangladesh which is struggling at the bottom of the list, businesses here say.

Nurul Islam Hasibbdnews24.com
Published : 12 Nov 2018, 04:54 PM
Updated : 12 Nov 2018, 05:37 PM

They say despite many advantages Bangladesh cannot woo foreign investments as expected due to the poor image it has in the world.

The Bangladesh Investment Development Authority or BIDA launched reform initiatives to improve the ranking in 2017.

According to the latest ranking released recently, India has climbed 23 positions to rank 77 among the 190 countries in the World Bank’s doing business report.

Bangladesh languishes at 176, which is just one position up from the last year.

India has improved its rank by 53 points in the last two years, a jump that has not been achieved by any economy comparable with India in size and scale.

“This ranking is important for building images to investors,” President of the Dhaka Chamber of Commerce and Industry (DCCI) Abul Kasem Khan told bdnews24.com.

“If we can improve at least 10 to 15 positions in the ranking in a year, then we can tell the world that we are working to create conditions for investors,” he said.

Abdul Matlub Ahmad, President of the India-Bangladesh Chamber of Commerce and Industry (IBCCI), said Bangladesh has so many advantages such as manpower cost, geographical location, language, but still it cannot draw investments as expected.

“If we cannot do better, then businesses will go to many other countries in the region including India,” he told bdnews24.com.

Abul Kasem Khan

Abdul Matlub Ahmad

The ‘Doing Business’ assessment provides measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.

India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators.

But, the most dramatic improvements have been registered in the indicators related to 'Construction Permits' and 'Trading across Borders'.

The World Bank has recognised India as one of the top improvers for the year. This is the second consecutive year for which India has been recognized as one of the top improvers.

India is also the first BRICS and South Asian country to be recognised as top improvers in consecutive years.

“In India, a major reason for improvements is small and medium enterprise’s financing scope. They stressed a lot on that. They made it simpler through banking channels,” Abul Kasem, the DCCI president, said.

In his view, Bangladesh could improve immediately if some easy and small changes were made.

“Such kind of analysis has not happened here. I think we can easily improve 10 to 15 notches if we can identify those issues and make the small changes required,” he said.

“We did not take any strategic steps in that way. Afghanistan which is ranked 167, better than Bangladesh, did it,” he said, adding that, a clear and easy process is needed to lure in investors.

“We have to keep in mind that when we don’t get investment it means it’s going elsewhere else,” he said, adding that good thing is that the government has realised the need to change things.

“It's heartening that Bangladesh government realised the need for doing better in this ranking, though only recently, and for that one-stop service centre is going to be started soon,” he said, referring to the BIDA’s reform initiatives.

But he said lack of coordination, understanding and priorities among the ministries is standing in the way of implementing those initiatives.

“The PM office is the highest body where we get the solution to every problem that means we are not getting the service from the respective ministries. So somewhere there is a lack of coordination”.

Matlub Ahmed said India’s remarkable improvement is the culmination of the efforts of the various implementing departments at state, central and municipal governments.

For the first time, a nodal department — the Department of Industrial policy and promotion (DIPP) —was appointed to lead the initiative. They are implementing Prime Minister Narendra Modi’s vision to rank among the top 50 in the doing business ranking.

“India made it a priority to ease the process of doing business from the state level to central. Companies are getting contracts on the spot at big summits at state level. There is no red tape. It’s paying off,” Matlub said.

He said the departments and ministries are working tirelessly to implement reforms.

“It’s like a group of mini-states under one central state. Each state individually promotes investment and businesses. It’s almost like a private sector government,” he said.

“Those states play a catalytic role and they give all the facilities for business development. They are hosting summits and the provincial chief ministers play their roles like the chief of the investment board."

He said India has been developing its infrastructure required for businesses for long. And now with the reforms, it is doing better in ease of doing business ranking. “We have just started. The process has not completed yet.”