Email Marketing is not dead! Try Probaho, a homegrown ESP from Bangladesh ▶ Join Now

The State Of The Ease Of Doing Business In Bangladesh: The Art Of Discouraging Entrepreneurship and Investment

Bangladesh is blessed with the gift of youth, experts have been pointing this out for decades. With youths comprising a major portion of the population, Bangladesh has the opportunity to reach newer heights and make its economic cycle run faster than ever.

But have we been really preparing our youths to live up to their potential and to utilize their vigor? Sadly, the answer is a resounding no.

Last year we had a labor force of around 6o million people consisting of people aging 15 and above. And we have failed miserably to create jobs for these youths. For the eighth consecutive year, the unemployment rate remained stagnant at the 4th percentile (4.2% in 2017). About 2.6 million people were jobless during 2017. The percentage is even higher among the graduate young population.

For most university graduates in Bangladesh, government and private jobs are the first choices to earn a livelihood. But young people face a lot of hurdles in their quest to land a satisfactory job. Simply put, without powerful connections in the hi-ups, it remains a challenging affair for a large portion of young people to get a job unless fortune does you an unexpected favor.

An alternative: start your own business. Work for yourself and create opportunities for others. It is, perhaps, a better choice.

Unfortunately, that too isn’t an easy ride. A while ago, our estimation suggested that it takes around 19 days to finish the initial steps to start a business, such as—obtaining trade license, registration with the Registrar of Joint Stock Companies, and so on. It hasn’t changed since as the World Bank’s Doing Business report showed for 2018. And these are just preliminary steps.

According to the Daily Star, a (foreign) investor has to go around 42 desks to get different types of approval before starting a business, which can consume as much as one and a half year of her/his time.

This is a self-destructive attitude for a country that is trying to push its economy up.

A number of reasons can be blamed for this situation. Inefficient bureaucracy and red-tape, lack of coordination between government agencies, failure to effectively automate the process are to name but a few.

The results are dire. More and more people are opting for jobs, keeping the unemployment rate unchanged. Private investment, as a percentage of the GDP, has been hovering around 22% to 24% over the last six years and is not showing much promise. In the startup space, international investors continue to shy away from Bangladesh despite the fact that the country shows huge growth potential.

In the World Bank’s annual Ease of Doing Business index, Bangladesh was ranked 130 among 190 economies in 2014. It then kept on being downgraded for the subsequent years finally standing at 177 in 2018. WB has pointed out a number of reasons for the consecutive lower ranking including the growing cost of opening a business, complicated tax return procedure, and so on.

These bottlenecks are also hurting Bangladesh’s global image as an investment frontier. In 2016-2017 fiscal year, total foreign direct investment amounted to $2.5 billion. Although a record high in Bangladesh, the figure fell awfully short compared with the foreign investment made in neighboring economies like Myanmar and Vietnam which received foreign investments of $9 billion and $12.60 billion respectively.

The government has attempted to remedy the deadlock.

In May 2017, it proposed a draft bill that sought to expedite the starting of a business by centralizing the process to four key secretariats—Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA), Bangladesh Export Processing Zone Authority (BEPZA), and Bangladesh Hi-tech Park Authority (BHTPA).

The bill, labeled One-Stop Service Act, is supposed to provide services under 27 categories under one roof including land registration, construction permit, etc. But it took 10 months to finally approve the bill in the parliament in February this year.

But some five months have passed since then, but the bill still hasn’t come into effect. Executive Chairman of BIDA, Kazi M Aminul Islam, said that the implementation has been delayed due to poor coordination between the government agencies that need to work together in order to provide faster services.

Although the OSS can be a start to eliminate the bottlenecks, it isn’t the only solution. Critiques say the purpose of the bill will remain unachieved unless firm authority is ordained to BIDA which would allow it to control other agencies directly and actually accelerate the process.

Businesses are a significant part of a country’s economy. People should be able to do business and the process of starting a business should be simple, easy and inexpensive if the economy is to keep on running. People should be able to start businesses fast and without much hassle.

If we can harness the full potential of the labor force, especially our young people, it will yield us a rewarding population dividend. Otherwise, we will be left with an immense liability of a jobless population.


1. Bangladesh Bureau of Statistics
2. United Nations Conference on Trade and Development

Rahatil Ashekan is an undergraduate student at the University of Dhaka studying Accounting and Information Systems. He works as a reporting intern at FS and writes about startup, travel, and e-commerce. You may reach him at [email protected].

In-depth business & tech coverage from Dhaka

Stories exclusively available at FS

About FS

Contact Us