Monday, October 14, 2019

Call for focus on private sector in policymaking to speed up growth

  • Staff Correspondent,
    Published: 2018-12-14 01:23:28 BdST

The current policies are not sufficient for Bangladesh to achieve the expected economic development, experts have said and suggested a greater focus on private sector in reforming the policies.

The observations and advices came in the third meeting of the Technical Advisory Committee of the Bangladesh Investment Climate Fund in Dhaka on Thursday.

Bangladesh will need to post an average 11 percent economic growth if it wants to be a middle-income country by 2020, M Masrur Reaz, Senior Economist at the World Bank Group, said at the meeting.

“Currently the policies that are in place will not support this growth, thus it is imperative to facilitate modernised policy support to ensure this growth.

“Much of the action needs to take place in the private sector. Private sector needs to engage intensively and extensively in reform process,” Masrur said.

He presented an overview of the BICF 2 programme. He pointed out slow action by the agencies that provide utility connections as a primary reason behind lower-than-expected result in the improvement of Bangladesh on the World Bank’s ‘Doing Business’ ranking.

The country’s position is 176th on the list now, lowest in South Asia.

“However, we expect that the disaggregated reform results will come more into play in 2019 and improve next year’s rankings as long as line agencies also incorporate the reforms,” The World Bank economist said.

Bangladesh needs more economic zones as well as investors to progress further, World Bank Group Senior Economist Ali Zafar said, noting that BICF provided technical guidance on master planning and on how to structure economic zones, investment promotion and capacity building.

He also emphasised Public-Private Partnership or PPP, saying it is the model of the future.

“So Bangladesh needs to prepare the groundwork to move to PPP model,” he said.

The Metropolitan Chamber of Commerce and Industry President Nihad Kabir said private sector orientation should be part of the foundation courses for civil servants.

The government should further incorporate private sector associations and bodies in the decision-making process to further ensure private sector support for the government, according to her.

Nihad also said the government needs to proactively ensure there are incentives for sectors beyond garments to diversify the export basket.

She emphasised a more comprehensive dispute resolution system to encourage foreign investors.

The World Bank Group’s International Finance Corporation or IFC and the Department for International Development or DFID of the UK are supporting the committee. Editor-in-Chief Toufique Imrose Khalidi said the government should introduce a deep civil service reform. He also stressed the importance of bringing in political consensus on greater reform issues.

When IFC officials and others pointed out that the investment facilitation issues needed approval from 22 ministries, Khalidi responded: “Many countries do not even have 22 ministries. Our problem is the size of the government. It’s too big and inefficient.”

“Why would you need 20-22 signatures for clearing shipments at ports?”

“Our civil service must be reformed and the political parties should include the issue in their manifestos for the coming general election.”

The meeting heard that New Zealand ports cleared 99.2 percent of goods in 30 minutes while Chattogram Port needed an average eight days.

World Bank Group’s Private Sector Specialist Mohammad Lutfullah said logistics was the component missing to integrate all the broader components under industrial infrastructure.

“Without improving logistics infrastructure, country cannot grow export diversification. In next three years, warehousing demand will increase by 63 percent,” he said.

Abul Kasem Khan, President, DCCI, suggested enacting a public-private dialogue model to realise reforms.

In summary, Bangladesh Investment Development Authority Executive Chairman Kazi M Aminul Islam concluded that he would ensure institutional reforms and capacity within BIDA and beyond.

“I doubt whether any other government agency had worked on ‘Ease of Doing Business’ before BIDA started its work. Work in ‘Doing Business’ is in the core of all of our efforts now,” he said.

He expressed keenness to engage the private sector in reform initiatives, saying more private sector knowledge, insight and experience should be brought to BIDA.

BIDA will look to set up more dialogue platforms such as BUILD, which was directly supported by BICF.

He noted that the government recognises that PPD is an important and critical platform to improve the investment climate of Bangladesh and said these dialogue initiatives can also come from the private sector.

World Bank Group Private Sector Specialist Nusrat Nahid, former DCCI president Asif Ibrahim, International Chamber of Commerce President Mahbubur Rahman, Mahfuzul Haque Shah, a former director of Chittagong Chamber, and Policy Research Institute Executive Director Ahsan Mansur also attended the meeting.