Dhaka yet to do lots for ease of doing business

Bangladesh still needs lots to do in terms of ease of doing business as there are number of constraints in promoting investment, especially foreign, as the quality of employees and increased wages are top among the challenges faced by companies operating in the country.

Time-consuming customs procedures, complicated customs clearance procedures, and restrictions on foreign remittance are other major challenges for businesses in Bangladesh.

Besides, obstacles for the manufacturing sector include high procurement cost and difficulties in local purchase of raw materials and parts.

These survey findings of the Japan External Trade Organisation (Jetro) on Business Condition of Japanese companies operating in Asia and Oceania with focus on Bangladesh were revealed at a program at Pan Pacific Sonargaon Dhaka recently.
Jetro country representative Yuji Ando released the report that finds around 65 per cent of Japanese companies doing business in Bangladesh would be able to make a profit in 2022.

Speakers present at the programme identified a number of fields that constraint business and investment growth in Bangladesh. They observed Bangladesh needs to advance in country credit ratings for attracting more foreign investment.

President of the Metropolitan Chamber of Commerce and Industry (MCCI) pointed to unfriendly policy of renewing trade license every year a major hurdle for companies, rather introducing renewal of trade licence every five years for reducing hassles faced by investors. ‘Investors will pay annual fee to the government at a time for three or five years or annually,” he added.

Requesting the government for bringing down tax at source, he also sought cut in corporate tax rate gradually.

Among others, Md Khorshed Alam, executive director of the Bangladesh Export Processing Zones Authority, Taro Kawachi, managing director of the Bangladesh Special Economic Zone, Myung-Ho-Lee, vice-president of Shoo-Ho-kai, Shah Mohammad Mahboob, director-general of the Bangladesh Investment Development Authority, and Tareq Rafi Bhuiyan Jun, secretary-general of the Japan Bangladesh Chamber of Commerce and Industry, spoke.

The report said, Bangladesh was ranked the fourth in terms of business confidence for 2022, jumping five points from the previous year and the country is predicted to be the third in profit growth among all countries and regions.

At present, 68 per cent of Japanese companies are planning to expand their businesses in the next one to two years and two per cent of them want to relocate to another country after withdrawing investments.

The number of Japanese companies doing business in Bangladesh increased to 320 mainly because of the country’s continuous economic growth in the past decade and huge business potentials.

Some 54.6 per cent of companies are willing to expand the function of sales, 45.5 per cent plan to go for the production of high-value products, and 27.3 per cent for making general-purpose products.

More than 15 per cent of companies intended to expand research and development activities to drive their business growth.

The survey report describes Bangladesh as the top place for export-oriented industries, with the ratio of exports to total sales by Japanese companies standing at 65.4 per cent.

Calling upon the government for further improvement of the business environment for more competitiveness and to attract future investment, Yuji Ando mentioned: "This is the time for Japanese companies to expand in Bangladesh and procure from local sources."

Asif A Chowdhury, president of the Japan Bangladesh Chamber of Commerce and Industry, said the government should address the problems faced by the Japanese companies to attract investors from the country.

SA/