Experts called for making Regulatory Impact Assessment Policy to reduce unpredictability of rules and regulations that stymies investment and innovations in the country.
Conducting a regulatory impact assessment before introducing any new regulations would help reduce the possibility of introducing poor-quality regulations and thus reduce the risk of inconsistent legislation, they said at a roundtable on 'Regulatory Unpredictability in Bangladesh' organised by Policy Research Institute in Dhaka Monday.
"Regulatory unpredictability is a major issue that comes in the way of private-sector development in Bangladesh," said Dr. Ahsan H Mansur, Executive Director of PRI, in his keynote presentation.
"Regulatory unpredictability increases the cost of doing business, reduces productivity, discourages both foreign and domestic investment and causes uncertainty with regard to economic and investment decisions," he added.
While identifying the sources of regulatory unpredictability, Dr. Mansur noted that rules and regulations are often announced without prior notice, consultation or impact assessment.
He also pointed that inadequate coordination between government agencies leads to conflicting rules and regulations. Rules and regulations are also formulated in ways that leave wider room for different interpretations by the administrators and the business houses, he added.
In addition, he also identified lack of effective grievance mechanism, insecure property rights and difficulty in finding information on existing rules and regulations as major breeders of regulatory unpredictability in the country.
Dr. Mansur also pointed out that emerging industries associated with rapid technological changes are creating new regulatory challenges for the government.
"Innovations will obviously take place. But the laws and regulations have to be modified according to changing nature of innovations," the economist said.
"Just as good regulations and good policies ensure efficient functioning of markets, policy certainty, stability and predictability can be critical for facilitating investment decisions," said Dr. Zaidi Sattar, Chairman of the Policy Research Institute.
"In Bangladesh, we are passing through a long period of sluggish private investment, which is hovering around 20 to 21 per cent of GDP. In this atmosphere, uncertainty in tax or tariff policy or in incentive packages for exports, imports or domestic production could result in the withholding of investment," he added.
Addressing such scenario, experts at the event called for providing prior notice and carrying out consultation or impact assessment with relevant stakeholders on upcoming laws and regulations.
Providing such opportunities to businesses to contribute to rule-making will not only improve the quality of the regulatory design but also reduce regulatory surprises, they observed.
At the same time, Regulatory Impact Assessment Policy can be adopted mandating the use of RIA and specifying the modality and quality-assurance modalities, experts said.
Affirming the need for greater consistency in terms of rules and regulations, Senior Secretary of the Legislative and Parliamentary Affairs Division Md. Shahidul Haque said one law or regulation should not come into conflict with other laws or regulations.
Former adviser of the caretaker government Dr. Mirza Azizul Islam, who chaired the event, stressed a more effective role of judicial system in addressing the issue of effective grievance mechanism, noting that inordinate delays in dismissal of cases create lot of uncertainties.
It was also observed at the meet that discretionary enforcement by government officials can be addressed by periodic review of regulations while lack of grievance mechanism can be addressed by enacting a law.
Lead Private Sector Specialist of the World Bank Syed Akhtar Mahmood, former Commerce Secretary Suhel Ahmed Choudhury and former President of Dhaka Chamber of Commerce and Industry Asif Ibrahim also spoke on the occasion.