Ease of Doing Business: Bangladesh slips a notch in WB ranking

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Bangladesh has gone one notch down in the World Bank’s ranking of ease of doing business mainly due to the hurdle businesses face here at the start of their operations.

The WB’s Doing Business report 2018 released yesterday showed that Bangladesh achieved slightly more points than last year’s but still its ranking slipped for fall in some indicators in addition to starting business.

Starting business here is difficult, particularly because the initial spending on getting licence, permits, is very high, according to the report.

The country holds 177th position among 190 economies while it ranked 176th last year going two notches up from the previous year.

Among the eight South Asian countries, Bangladesh is only ahead of Afghanistan that ranked 183th in the “Doing Business 2018: Reforming to Create Jobs” report.

Bhutan is the best in the region at 75th position, followed by India, 100th, Nepal, 105th, Sri Lanka, 111th, the Maldives, 136th, and Pakistan, 147th.

Last year, in the WB ranking, Bhutan was placed at 73, followed by Nepal, 107, Sri Lanka, 110, India, 130, the Maldives, 135, and Pakistan, 144. This means this year among the South Asian countries only India’s ranking improved.

Bangladesh scored 40.99 out of 100 this time. Its score on 10 indicators was 40.84 last time.

Zahid Hussain, lead economist at the WB, Dhaka office said, “Other countries moved much faster than Bangladesh and consequently our ranking slipped down a notch despite slight improvement in our distance to frontier (DTF) score”.

The biggest fall is on Starting-a-Business indicator due to an increase in the registration cost before starting a business. There has been a significant improvement regarding dealing with construction permits, but this is not enough to offset the deterioration in starting a business.

“We need to move much faster in implementing the reform action plan” being developed by Bangladesh Investment Development Authority through better interagency coordination and more intensive monitoring of reform efforts.

Bangladesh should address the issues, on which its ranking is close to the bottom like getting electricity, enforcing contracts and registering property, Zahid said.

Every year, the WB’s Doing Business report sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.

The report points out changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Bangladesh’s grade registered major fall on — starting a business, 131 from last year’s 122, getting credit, 159 from 157 last year, protecting minority investors, 76 from 70, paying tax, 152 from last year’s 151.

Scores on some other indicators — registering property, enforcing contract, trading across borders — remained same.

However, on some other indicators, Bangladesh’s position improved like getting electricity.

The score on dealing with construction permits has gone up by a significant 8 percentage points this year.

The top five countries on the list are New Zealand (score 86.55), Singapore (84.57), Denmark (84.06), Korea (83.92) and Hong Kong (83.44). The worst five performers are Somalia (19.98), Eritrea (22.87), Venezuela (30.87), South Sudan (32.86), Yemen (33).

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