Ferdaus Ara Begum
Bangladesh today stands at the doorsteps of enormous opportunities, backed by its strong demographic profile and growth trajectory. The country has bagged extensive recognition in recent years, whether it is through inclusion in the JPMorgan Frontier Five, Goldman Sach's Next 11 or BBVA's Emerging and Growth-leading Economies' (EAGLEs) Nest Countries. In 2011, McKinsey research identified Bangladesh as the next sourcing hotspot for ready-made garment (RMG), making the country a very big global player. In the last 15 years, Bangladesh's share of apparel exports to Europe and the US more than doubled, securing Bangladesh's No. 3 position among importers of the European Union 15 (EU-15) and the No. 4 position among US importers. Bangladesh's GDP growth rate is the 38th fastest in the world, and in 2009 the PricewaterhouseCoopers ranked Dhaka the 9th largest city in terms of growth in the world. These figures speak of the enormous opportunity that lies in front of us as a nation.
Bangladesh's primary growth aspiration at the moment hinges on private investment. Increasing private investment not only offers the fastest solution to economic growth and job creation, but is also the most sustainable of all approaches to poverty alleviation. Among the macro-economic indicators and targets as per the perspective plan ( 2010-2021) of Bangladesh, the share of gross investment should reach 38.8 per cent from 24.4 per cent of the benchmark FY 2009 while the target for FY 2015 it is 32.5 per cent as the percentage of GDP. The export target is US$ 82.0 billion against the import target of US$ 110.5 billion.
Fuelled by the globally escalating costs of production, investors are now looking for alternative destinations for their investments. As China, which has long been able to attract much of the world's investment, fails to remain cost-competitive, countries like Vietnam, Thailand and India are stepping up to take the challenge of attracting these investors. There is no reason why Bangladesh, with its large domestic market, low production costs and hard working labour force, cannot seek to capture a large part of the investment currently looking for alternative destinations.
Capturing this investment is important for Bangladesh in meeting its dream of becoming a middle income country. Increased investment in Bangladesh means more productive jobs for our growing labour force, which in turn means higher incomes, lower unemployment and an end to poverty. It means an opportunity for Bangladesh to prosper, grow and develop, while simultaneously becoming a major force in the world economy. It implies a chance for Bangladesh to make its mark on the world stage and unleash the potential that has lain dormant for almost 40 years.
But capturing this investment means that Bangladesh must provide investors with an attractive and efficient business environment. This requires coordinated actions of all parties-government, private sector and civil society - in identifying the constraints that impede the private sector growth and thereby enable Bangladesh to attract investments, both domestic and foreign, to reap the benefit of economic growth and development.
Coordinated action in improving the investment climate is all about public-private sector engagement in designing, enacting and implementing policy reforms, and building trust as a by-product of that engagement. Many developing countries have demonstrated exemplary feats in ensuring coordination between the government and the private sector. In Cambodia, the Government-Private Sector Forum (G-PSF) has achieved a status equal to the cabinet meeting. Over the years, G-PSF has helped the private sector advocate more successfully for itself and is an effective engine of reform for ensuring Cambodia's business-enabling environment, warranting direct involvement of the Prime Minister and the Minister of Finance. Similar success stories can be traced to Uganda where the Presidential Investors Advisory Council (PIAC), chaired by the Prime Minister, has been embedded into the government's decision-making and has generated reforms in agriculture, mining, energy, ICT and education among other areas. In Liberia, the Cabinet-Level Business Reform Committee has implemented various microfinance and administrative reforms to aid business start-up. The business report published in October 2012 by the World Bank has ranked Liberia among the top 50 reformers in the world, pushing it up by five places from 149 to 154 among 185 countries.
In Egypt, the Federation of Economic Development Associations (FEDA) is an umbrella organisation that represents small and medium-sized enterprises. In 2008, the FEDA identified and advocated against 132 Ministry of Industry and Trade regulatory decrees, dating back to Egypt's old command economy. 84 of these decrees were removed. As a result, for example, manufacturing businesses were no longer prevented from importing less expensive scrap metal or machine tools.
Aiming for "hard" outputs such as policy reforms can cause valuable "soft" outputs to arise too - in terms of good governance, trust and social cohesion. An institution which brings together both the public and private sector, allows businesses to challenge government corruption, which in turn puts pressure on them to improve corporate governance. Mauritius is one example of public private coordination having led directly to a new code of corporate conduct. The Vietnam Business Forum is one of the several examples of structured dialogue improving the public image of businesspeople. While entrepreneurs in Vietnam had traditionally been viewed as greedy and untrustworthy, their contribution to society is now recognised in an annual "Entrepreneurs Day".
In Turkey YOIKK is a coordination council structured for reforming the investment climate launched in 2001 and reviewed in 2012. The council conducts its agenda through ten technical committees working on specific issues with participation of both public and private institutions. YOIKK is described as a successful story of public-private partnership on international platforms. Indonesia and Malaysia are some other examples where public private partnership has been successful.
In Bangladesh, the government has established the PSD Policy Coordination Committee, chaired by the Principal Secretary, with a view to eradicating constraints facing the private sector growth and providing a favourable investment climate. This has created an avenue for the private sector to unite and step up to take the challenge, by working together with the government and with one another to promote more business in Bangladesh, and therefore more growth, jobs and incomes.
The Business Initiative Leading Development (BUILD) is the private sector's response to this challenge. It is a joint initiative of the Dhaka Chamber of Commerce & Industry (DCCI), the Metropolitan Chamber of Commerce & Industry (MCCI) and the SME Foundation (SMEF), and is Bangladesh's permanent private sector-led business reform champion. BUILD is a sustainable platform for action-oriented business reforms that simplify the process of business in Bangladesh, by working closely with the government. BUILD features regular and ongoing coordination efforts with the government to identify constraints to private sector growth and develop appropriate solutions to these constraints. The process is backed by research and analysis, conducted in partnership with academics, researchers, universities and think tanks, and features strong strategic advocacy and communications to ensure that, together, the private and public sectors can make positive and demonstrable changes that can unlock our nation's potential.
BUILD creates a platform for the public and private sectors to work together to reach the right solutions for the country. Increasing interactions between the government and the business community will lead to mutually beneficial policies, combating problems and identifying solutions that help our economy grow. BUILD is an organisation that will work from government to government and pave the way for consistent policies and stable investment climate.
BUILD is an opportunity for business in Bangladesh to make a difference and change lives. Most of the issues, we work on, benefits Bangladesh's innumerable small and medium enterprises (SMEs), the primary engines of growth and job creation, by making it easier, faster and cheaper for them to do business. As Margaret Mead, cultural anthropologist, correctly puts it "Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it is the only thing that ever has." Indeed, BUILD secretariat, by harnessing the power of private sector, aims to play a fundamental role in making a positive impact on stimulating investment and creating jobs and thereby bringing to fruition our dream of a brighter and more prosperous tomorrow for Bangladesh.
The writer is Chief Executive Officer (CEO) of the Business Initiative Leading Development (BUILD), which is a joint initiative of the Dhaka Chamber of Commerce and Industry (DCCI), the Metropolitan Chamber of Commerce and Industry (MCCI) and the SME Foundation (SMEF).