The state of business in Bangladesh in terms of its overall performance, despite odds, has been good in recent times. Among the odds, the key impeding elements are those that need government intervention by way of facilitation. It is here that the role of infrastructure becomes extremely crucial.
Putting in place the required infrastructure is both time- and cost-consuming. Successive governments stuck to this negative rationale to shield their positions while in power, and whatever that was in place could barely match the soaring demands for, say, electricity, gas, roads, specialised industrial parks and so on. As a result, the cost of doing business has always been on the rise. Coming to corruption and inefficient bureaucracy, one may find that these are but the two sides of the coin, each complementing the other. While corruption breeds inefficiency, inefficiency may not necessarily breed corruption. But in our case, it is a vicious mix. It is not only instrumental in routinely harassing business people but the common people as well who may have no links to business at all.
Inadequate infrastructure, corruption and inefficient bureaucracy were found to be the key bottlenecks in scores of studies and surveys conducted at home and abroad. According a World Economic Forum (WEF) survey, 21 per cent of businesses in Bangladesh identified inadequate infrastructure as the top barrier in doing business. Corruption was identified as the second problem by 20.7 per cent of the respondents, while 15.3 per cent of the respondents found inefficient government bureaucracy severely affecting business environment. Now, looking at the percentage of the stakeholders who rated these problems as the top three, one may tend to see that the sequence may change depending on the nature of businesses to which the respondents belong. However, the fact that poor or inadequate infrastructure has featured most prominently among these three goes to show how this deficiency cuts across all business segments as a common malady.
Viewed from this perspective, it is the government that at the end of the day remains answerable for not doing what it was to do to help businesses to grow and at the same time take steps to do away with harmful practices. It is commonly believed that much of the inadequacies and accompanying vices are, for the most part, augmented by inactivity of the government or its lackluster moves.
Of the other deterrents to doing business in the country, political instability, inadequate access to financing, discontinuity in government policies, lack of trained workforce figured prominently. In this context, it may be pertinent to argue that the impact of much of these inadequacies could have been felt less had infrastructure been in place, at least in critical areas such as electricity and gas, transport and communication, specialised industrial parks and economic zones etc.
Experts at a discussion meeting last week in the capital said a qualitative development of infrastructure would be one of the major challenges for the country to get sufficient local and foreign investment needed to attain its desired goal. Besides, enhancing the government's project implementation capacity, creating skilled workforce and ensuring transparency should also get priority, they said. They came up with the observations while speaking at a discussion on 'Road to 2030: Strategic Priorities' jointly organised by the Dhaka Chamber of Commerce and Industry and the Economic Reports' Forum. DCCI president Abul Kasem Khan while presenting the keynote paper on the issue, said, 'Bangladesh needs $20-$22 billion investment annually only in infrastructure if we want to become the 30th largest economy by 2030.' He said the country achieved 7.0 per cent gross economic growth and the pace of the growth needs to be increased from here to attain 10 per cent by the year 2030.
For achieving the growth, the government has to make public-private partnership functional and to attain increased foreign direct investment and quality investment in infrastructure. Mentioning that slow pace of infrastructure development as one of the major challenges, he said that the country's allocation for infrastructure development should be increased to 6.0-8.0 per cent of the GDP from the existing allocation of only 2.85 per cent.
Speakers attending the meeting stressed the point saying the way the government is spending money would not work unless there is strong focus on the efficient use of resources. Growth is also held back by insufficient investment in quality education and skills development, they said.
It is true that there has been a rise in investment in infrastructure over the years. The amount reached $6.0 billion in 2016-17 from $2.0 billion in 2011-12. Bangladesh's infrastructure spending stands at only 2.85 per cent of GDP, which is 10 per cent in Vietnam, 9.0 per cent in China and 5.0 per cent in India, the Philippines and Sri Lanka.