The data released by Standard Chartered Bank on the economic situation in Bangladesh is promising on the one hand, and challenging on the other. The report cites the export market, the remittance of expatriate workers and government investment as the three main forces of the economy. Even if the current trend of government investment and expatriate income will continue, it will be big problem to sustain the growth of export revenue.
The report of Standard Chartered Bank highlights various aspects of business problems in Bangladesh. The policy makers of the government boast about the development highway in the country, but the authorities have not taken any effective steps to fill the ruts in that development highway. As a result, we are take one step forward and two steps backwards in trade and business.
Reasons that increase business costs have been identified, including corruption, inefficient bureaucracy, lack of funding, inadequate infrastructure, high tax rates, lack of education for workers, low morale and policy stability. It is difficult to survive in the global economic competition ignoring any of the reasons. Before coming to power, the Awami League declared 'zero tolerance' against corruption.
But after 12 years in power, the amount of corruption has not decreased, rather has increased. Corruption has been linked to the incompetence of government officials. If there is corruption, inefficiency will increase. Again, if there is corruption, the morality will also deteriorate.
No matter how much the policy makers brag about the development, we are lagging behind in the certain vital modes of business - roads, railways, ports and air transport. Apart from China and Vietnam, it also costs high to transport goods in containers from India and Sri Lanka to Bangladesh, and it also takes more time to unload goods at the port.
In addition to these problems, the challenges that Bangladesh will have to face in the transition from a least developed to a developing country will further increase the cost of doing business. That is why the businessmen have emphasized policy support of the government such as reduction of tax rates.
Another reason for traders' concern is that due to transition to a developing country, the existing tariff facility on exports will be lifted from 2026. This could reduce exports by 14 per cent. Vietnam, Bangladesh's rival in the readymade garments sector, has already signed free trade agreements with the European Union (EU) and several other countries. As a result, the country will get tariff benefits in those countries. On the other hand, Bangladesh may have to pay 10 to 15 per cent duty, which will further increase the cost of business.
The government must now find a strategy to meet this challenge so that Bangladesh does not lag behind in the global competition. If the tax rate is higher than that of the neighbouring or rival countries, the price of the product will also fall and in the end it will put pressure on trade and commerce. In that case, the government should start talks with the countries concerned about tariffs now and take a practical decision to reduce the cost of trade. Establishing good governance in business does not require additional government expenditure or manpower. We require proper implementation of the existing laws to establish good governance.
The report of Standard Chartered Bank did not say only negative things. The fact that the wheel of the economy was in motion due to the policy support of the government during the Covid period was also commendable.