The government's investment promotion agency -- Bangladesh Investment Development Authority (Bida) -- should ensure prompt response to queries of the business community with well-coordinated decisions across all departments.
Such a suggestion came from a meeting of the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, last week. It said the agency should form a taskforce which would frequently interact with the private sector and potential investors. There is a need for increasing the number of private sector representatives in its governing body, it added.
On its part, the new BIDA chairman said the current age of fourth industrial revolution demands updating the rules and regulations. And one of the BIDA's mandates is to bring in policy changes, if required. He said he would emphasise working towards reducing the cost of doing business.
However, the investment-related scenario in the country is not that much encouraging. What is true about it is that an investor needs up to a year and a half to get approvals from 42 desks of different government offices for starting a business. According to the businesses, it is depriving Bangladesh of the much-needed foreign direct and domestic investments.
The foreign direct investment (FDI) the country receives is insignificant compared to its peers and neighbours. Even Myanmar, with its troubled economy, received four times more than Bangladesh's around $2 billion in 2016-17 fiscal year. India got around $50 billion last year.
Even domestic investments, which had been hovering between 22 per cent and 23 per cent of the gross domestic product (GDP) for a decade, present a gloomy picture.
Realising gravity of the situation, the government has initiated a move to render faster services to investors and improve the country's abysmal ranking in 'ease of doing business' -- 176th among 190 economies.
A cabinet meeting chaired by the Prime Minister approved the One-stop Service Act to provide investors 16 types of services faster and under one roof. But it took the lawmakers 10 months to approve the proposed law, a move that contradicts the spirit of the act.
Since parliament passed the law, investors still know nothing about when they would get the faster services. The investment promotion agency, which is one of the four secretariats that is supposed to provide one-stop services, is still incapable of rendering the required services.
The rules and regulations for implementing the act had already been formulated. The BIDA was supposed to provide the services from June this year, but it had been delayed due to the poor progress made by other government agencies.
It is a pity that the government offices, such as the Registrar of Joint Stock Companies and Firms, land registration, the central bank, the controller of export and import, the revenue board and the authorities of gas, electricity and water are not ready for the one-stop service centre integration.
Some 18 such government agencies and departments were in the process of joining the one-stop centre, but they need several other government offices to get connected to the BIDA.
Once the one-stop centre is operational, an investor may get approvals like registration of a company within one day and maximum 15 days. Similarly, connections to utilities will be given within a week. Only the approval for construction of a building may take 60 days.
Analysts say the one-stop service should start functioning immediately to attract investment and create jobs. Many countries, including China, were facing rising cost of doing business and they want to move their garment, pharmaceuticals, footwear, and food-processing factories to low-cost places, where Bangladesh ranks at the top.
Meantime, in order to facilitate easy investment and smooth business, the investment promotion agency has planned to bring down the number of days required for getting approval from Rajdhani Unnayan Kartripakkha (RAJUK) for construction work to 60 days and electricity connection to 28 days. Currently, it takes 278 days to get RAJUK approval to begin construction work and 404 days to secure electricity connection.
As part of the detailed plan, the BIDA is expected to try to ensure the country's ranking among top 100 economies in the next five years in terms of 'ease of doing business' prepared by the World Bank.
The main objective of the plan is to attract private investment, both domestic and foreign, to make sure that Bangladesh attains the middle income country status by 2021 and high income by 2041.
As per the plan, the BIDA wants to bring down the required number of days for completing all procedures of starting a business only to seven (07) days from 19.5 days required at present. Its reform plan further suggests that registering property, a lengthy task in Bangladesh, must be made easy and simple for investors through online.
The plan includes the central bank's Credit Information Bureau (CIB) to provide detailed information of the client, including collateral debt. The reforms include enforcing contracts to be addressed with top priority. The plan recommends a separate bench of the High Court to deal with the investment and trade issues and also review of the existing legislation to resolve the investors' insolvency issue.
The investment promotion agency also sought rationalisation of the tax provisions on amortisation to attract more investors both from home and abroad. It says the existing tax provisions on depreciation of intangible assets are not investor-friendly in line with the economic advancement.
The third schedule of income tax ordinance, dealing with how assets are recognised and categorised for fiscal depreciation are complex, requires additional documentation, and does not incorporate the current needs of business.
Currently, fiscal depreciation is applied to write down value at a fixed rate throughout the life of an asset which in turn assumes an arbitrary life of all assets falling in the class. For example, industries can enjoy 20 per cent depreciation on written down value of machinery. This means a little more than 21 years will require reaching negligible written down value, which is unrealistic in many situations.
In the circumstances, there is no scope for delay in implementing the one-stop service centre. Improving the ease of doing business is urgent and the BIDA is the primary agency to lead the reforms. However, it would not be possible without the full support of the relevant agencies.
One-stop service centre should be empowered in the real sense so that it could meet the requirements of the investors. Foreign investors will not come until and unless the centre could work efficiently with full authority.
© 2017 - All Rights with The Financial Express