London 25 October (BAN/DT) Bangladesh’s eight-place leap forward in the World Bank’s Ease of Doing Business 2020 index from 176 last year to 168 out of 190 countries this year, is the country’s biggest climb in recent years. However, it is still not a massive competitor for its surrounding countries seeing as its SAARC neighbours and peer countries have improved vastly compared to Bangladesh. In India, they have climbed 14 notches to the 63rd rank while Pakistan has climbed 28 to 108 and Nepal 16 to 94th place., All of these figures makes Bangladesh’s improvement a pale comparison, especially since it has a lower rank than all of its SAARC neighbours except for Afghanistan and all the countries that are vying for Foreign Direct Investment and exports such as Myanmar and Ethiopia. This is a perfect example that shows that the Bangladeshi government have a big task ahead of them in order to climb the ranks in the index.
The report is used to present quantitative indicators on business regulations and the protection of property rights that can be compared across countries and over time. It takes different factors into account when calculating the index and this year, Bangladesh was able to make reforms on three fronts, which is the most is has achieved in a decade. However, once again, in comparison Pakistan and Kenya made 6 reforms; Myanmar five; India four; China eight; and Saudi Arabia nine.
The reforms were that Bangladesh made setting up a new business less expensive with the reduction of registration and name clearance fees and removal of the certifying fee for digital certificates. They also made obtaining an electrical connection more efficient for Dhaka, who invested in digitisation and human capital. As well as that, they reduced the amount of the security deposit required for a new connection this year and they have an expanded coverage due to the credit information bureau, which makes it easier to access credit information. This reform in particular was Bangladesh’s most significant improvement because in this category, they were able to increase their ranking by 42 notches to 119.
On the other hand, the country made no progress in categories of enforcing contracts, trading across borders, paying taxes and protecting minority investors. Bangladesh are next to last globally on the enforcing contracts indicator and for them to pay taxes it takes them 435 hours on average, which is a huge contrast to the 273.5 hours spent in South Asia. Concerning trading across borders, Bangladesh is also limited because it will take them 168 hours to submit completed documents at the port and get customs clearance, which is more than twice the time needed in South Asia. In 19 other countries, it only takes a single hour, according to a study. They even declined in one category which is resolving insolvency, seeing as their score dropped from last year.
Therefore, the country can be seen to be very dismal from a lot of viewpoints and since the government is well aware of the scenario it has chosen to set the target of climbing up to double digits in the ranking by 2021, which may seem unrealistic but is possible as proven by India in recent years when it managed a jump of record 30 notches in one year. If Bangladesh is to achieve its growth ambitions and become a higher middle-income country by 2030 and a developed economy by 2041, a fostering business climate is imperative, and the government need to start making changes to its reforms.