Business Environment · Economy of Bangladesh

Business at the district level in Bangladesh

Business at the district level in Bangladesh

Md. Joynal Abdin

The Daily Independent on August 03, 2010

Bangladesh is earning 5-6 per cent GDP growth with all the natural disasters, political unrest, poor infrastructure, energy shortage, lack of utilities, corrupt bureaucracy, and so many negative factors. That we are maintaining the stated growth rate is our very remarkable success in the last decade. We can achieve it without any government support or major industrial initiative. But 5-6 per cent growth is not enough for us to be graduating within 2021. We need at least 8-10 per cent growth for the same.

Currently the growth is mainly contributed by one single export sector along with small and cottage industries in grass-roots level. Recent environment in the most contributing sector i.e. readymade garment is not well, labour unrest in this industry is harming us twice destroying existing resources, delaying shipment of current work and harming our image abroad. So those who are responsible for this unrest, whether the RMG owner’s or workers or outsiders the government should identify and take active measures to stop it. On the other hand, government should actively think about the micro industries located in district headquarters to bring them under SME financing and facilities. Currently SME Foundation and Bangladesh Bank are operating SME lending programmes. So I would like to draw the kind attention of the responsible person to these large dominating micro enterprises.

Recently Asia Foundation has completed a survey on the business environment in district headquarters and role of local government and government agencies in their economic development. We appreciate the Asia Foundation and sponsors for their realistic business friendly and pro-private sector development initiative.This is a very important tool to understand local government’s role in private sector development, whether they are performing right or wrong?

This is a very rich document for the businessmen to compare their areas with other alternative areas in light of various factors of doing business, to gain knowledge on best local practices for improving their competencies in same business. It will help a businessman to identify the district with better enabling environment for his/her business as well as particular strength and weakness of each district.

It will not only help businessmen but also the Government’s policy makers to monitor the performance of different districts and make adjustment as needed, particularly to measure performance of local government officials in private development. It will enable government quick and perfect policy implementation for ensuring a business friendly environment in each district.

Some bureaucrats questions that, why government will take care of the private sector? It is their business, they are operating it for own profit, so why government will finance them? Why private sector development is important? The answer is simple that private sector is the engine of Bangladesh’s economic growth, employing highest number of population, ensuring livelihood to mass people and paying 84 per cent revenues to the government earnings. So government has to play its role accordingly to ensure a congenial environment for the business community.

So many important findings have come up from the Asia Foundation Economic Governance Indicators report. If we would like to think with most important five findings then these will be as follows:

1. Dominance of micro-enterprises: This report shows that, 79 per cent of the enterprises have a maximum three (3) employees. That means micro enterprises are dominating our district level business entities. We have SME foundation to look after, to facilitate, to promote, to advocate in favour of Small and Medium Enterprises. But we are missing a large number of micro enterprises while making policies for granting loan, recommending into the budget input, advocating policy formulation. This report opened up our eyes to think with baste majority of district level business enterprises i.e. micro enterprises. So government and relevant agencies should come up with their helping hand for these vast majorities of micro enterprises.

2. Dominance of trading: This report shows us that 70 per cent business entities in district level are involved with trading either wholesaling or retailing. They are performing role of channel of distribution but their output in GNP is minimal. So government has to think about how more district level entities can be involved with manufacturing business rather than trading. Manufacturers bring foreign currencies by exporting their product and promote economic growth significantly. So we need more manufacturing units in district level.

3. Low number of women entrepreneurs: This report opened up a bitter fact to us that only 0.46 per cent that is less than half per cent business initiatives in district level was owned by women. This is very disappointing new for us. Where half of the populations are women in this society, we have glorious history of women leadership, today the leader and opposition leader of the parliament including minister for home, foreign affairs, women affairs and deputy leader of the parliament are women. In such a women-friendly society why women are not coming forward as entrepreneurs? Government policy makers have to think about the matter actively so that women in district level feel encouraged to become an entrepreneur. Otherwise half of the population will remain out of the economic growth as well as out of the economic freedom.

4. Clear dominance of proprietorship: The report mentioned that 97 per cent entities are proprietorship owned by a single person. This is because we are still first generation and poorly educated businessmen. Government policy for partnerships, franchising, licensing, joint ventures, and venture capital is till absent or inactive. So local government interfaces have to be active enough to facilitate those forms of business.

5. Cost of doing business: Till now we have low entry cost, land access cost, formal costs, and labour cost but we are facing a higher amount of informal costs like bribe, extortions, and poor infrastructure, higher transportation cost, law and order and dispute settlement cost. To ensure a pro-private sector development, business friendly environment, government has no alternative but to control these informal costs of doing business in Bangladesh.

Finally we hope the government will take active initiative to create and maintain a business friendly environment in district headquarters so that people get employment there and human pressure on the capital city decreases, traffic jam is reduced and so many relevant problems solved.

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