We will be reaping the benefits in 2022: Salman

Excerpts of the interview of Salman F Rahman, private sector adviser to the prime minister. The virtual interview was taken by The Business Standard's Executive Editor Sharier Khan, Deputy Executive Editor Shakhawat Liton and Senior Reporter Jebun Nesa Alo on Wednesday.

How do you perceive the changes in the business sector as an advisor to the prime minister and what is your vision?

The way our private sector progressed in the last 10 years is almost unimaginable as nobody would have thought that it would be possible. The full credit of this goes to the prime minister because of her vision and her plans to implement the policies.

And of course, the credit goes to the private sector. I always said that if the private sector of Bangladesh can get a favourable environment, they can show what they can do.  What hon'ble prime minister has done is that she created a favourable environment where our private sector has performed. And we all know about that performance as that is recognized worldwide.

After coming to power in the last term two years ago, prime minister gave me the responsibility about the ease of doing business index. For many years, we were roaming around 170, 171 or 172 positions in that index. In the first year, we took some steps and because of that we moved up six or seven notches. Which was remarkable. Another achievement in that year was when the World Bank said that we were among the top 20 reformers. This year our target was to come to 120 or 115 position. It was very achievable. But because of the pandemic it took was six months to understand the situation. We have started our work again. The prime minister has set up the target of coming down to a double-digit ranking.

What is holding us back from achieving that target?

There are two aspects of it. For a long time, we had no idea what is the marking system of this index. When they told us that we were behind Afghanistan I simply could not believe. Then I tried to understand the marking system and found that we are lot better than Afghanistan in different sectors but our categories did not follow the official marking system. We were falling behind in presenting ourselves according to their framework to get the marks. 

The second thing is that they have got two systems. One is that you will do the reforms. They will see that you have amended the laws, created other opportunities, and they will give you marks for these. Then they also take feedback from the stakeholders. They survey about the facilities that the stakeholders are actually getting. Here we have a serious lacking. Because our stakeholders or private sector have a practice of making shallow general comments. For example, they are asked about if they had any individual case and how long it took them to get the verdict. Now if you did not have any case you would probably say that no I did not have any case so I cannot answer you. But what they generally say that you cannot get any verdict in three to four years in Bangladesh.

I know that there are problems in our justice system. But they wanted to know a specific answer not a general observation. That is why I have told Bida to talk with the stakeholders like businessmen, chartered accountants, lawyers, members of the civil society etc. They have to understand that the way the answers to their questions makes our progression useless.

In 2006, when the World Bank for the first time ranked us, our ranking was 65. But last year, we were positioned in 177 or 176. How did we fall? Does the bureaucratic bottleneck bear any responsibility for that?

When they gave us the ranking of 65 that was the starting point. It was like a benchmark. Then they introduced the system of marking. There were of course problems in bureaucracy. But we have made many reforms. For example, there is category of starting a business. There they ask that when you go to registered joint stock to form your company how long it takes, what is the cost and what is the process. Now when you go to the registered joint stock, they take your papers and examine them and then the give you the certificate of incorporation. This process is not so slow in our country; we could get the papers ready in a relatively quick time. But the cost is pretty high. That is why we do not do well in this category. Now, for trade license we have to go to the municipality. Here, the time they consume is enough to put us on 176 in the ranking. Here, you know, they would not give you license without bribe.

Is it possible to make this bureaucracy business-friendly?

That has already been done. We decided that the Office of Registrar of Joint Stock Companies and Firms will give the trade license. Then the municipalities said trade license is a source of their income. If you take it away from us, our official income will decrease. Then we said that let the joint stock company office collect the money on behalf of the municipalities. It will reduce the complexities and consume less time. This is now has been agreed. 

Now we have made all the process online. If you now upload all your documents, you can incorporate a company in Bangladesh within two hours.

Recently we have found that the One Stop Service is not yet so favourable yet. Still there are some hurdles.

It's taking time. But many services have already been included in One Stop Service. Tomorrow we have a programme in Bida where probably 7 or 12 services would be incorporated into its OSS.

What about land registration?

Land registration has seen the biggest improvement. Now you can get the registration in only seven days. I myself have registered land for Beximco in seven days.

When a service goes online, it becomes more transparent. Huge work is taking place concerning this.

Please, enlighten us about the online process. Is there any kind of data service?

Let me tell you. Bida, Beza, Bepza and the high-tech parks have the one stop services. Hon'ble prime minister said to take it all in one platform where customers can get all the services in one website. Probably Bida will be the central website that you will go. If you visit Bida website, you will have options to go to other websites to. All will be there. 

We have a problem on enforcing contracts in land registration. We had a meeting with the law minister the day before yesterday. The World Bank marking system has an option of small cases with small disputes. If you have a dispute of two times more than the per capita income, say a small dispute of Tk5 lakh, how long it takes to solve it. Now we were reforming the system for big disputes which involve large amount of money like Tk10 crore or Tk50 lakh. That was because we did not know the marking system. That is the reason behind the fall in ranking from 65 to 176. Because they don't want you to reform the entire judicial system, the marking is based on small dispute of two times more than the per capita income.

We have a law named small causes court act for resolving these disputes. But if we implement the law, we will never get any mark from the index because there are so many complexities in the law. It would not solve the problem. Then we decided to make the law simple. The law minister said in the meeting that it will also be complex. Then he said that to dissolve dispute he with his executive power along with the Chief Justice will make a separate dedicated court like small claim court which will meet the demand of the World Bank. This will be issued within fifteen days. If we can make this reform, my ranking is now at the lowest, from 189 we will come down to 48. It will be a permanent system. The law minister said the reformation of small causes acts would be going on along with this and that will be incorporated here later. Here, I want to thank the law minister for his help.

Do you think other organisations like the city corporations are being able to run with Bida maintaining the same speed?

I will say that there is a mix situation. Some ministries are very fast, while some are slow. My comment is- what I have seen that there is a change in the mind set at the top level. Now they fully understand that we have to improve in the business index. But unfortunately, the mind set has not changed in the mid and lower-level. Another problem is the IT and PPR. 

We face problem when we see that our software is ready but they are lagging. Then the problem arises. But overall, if you ask me if I am satisfied or not about the progress so far, my answer is 'yes.' Specially, considering the pandemic situation.

Do you think the target that the prime minister has set for 2021 will be achieved?

Yes. Inshallah!

Another thing I undertook after taking the responsibility besides the ease of doing business index is the public private partnership authority which has been yielding results. We have G2G with Japan and Korea and some works have been done here. And I am very happy today because of two reasons. The first mother vessel has entered the Matarbari channel. This is a landmark as the completion of the Padma Bridge structure. This is a game changer for Bangladesh.

What kind of investment we can expect in 2021 despite the pandemic? What are in the pipeline that you can share with us?

We are still in the transition period so I would not mention any specific figure. The vaccine will arrive in January. The second thing for which I was happy is the Oxford Vaccine has been approved by the UK government. So, it will arrive in our country very soon.

Now, coming back to your question, there are two or three areas where we can expect investments. One is the Japanese investment. They are building an economic zone in Araihazar. The ambassador of Japan also shows his enthusiasm about that and said that it will be one of the best economic zones in Asia. This is where I think big investment will come. There are also a lot of investment proposals in the pipeline. People are looking for investing in Bangladesh. But because of the pandemic and travel restrictions and the economic stress in their countries I am not sure 2021 will be the best year for investment. But I think 2022 and 2023 will be good years.

Along with that we are observing domestic investment. There is a huge interest among the Bangladeshi businessmen. There are some large investment proposals.

In which sectors?

In almost every sectors. In white goods after Walton, many young entrepreneurs are coming with new ideas. A company is setting up a factory for electric cars in the Bangabandhu Shilpa Nagari with Chinese technology for both domestic consumption and export. 

Another thing I want to mention is the platform that we have created for the freelancers. This is a huge sector. Recently, the World Economic Forum and Oxford or Cambridge University has reported that after China we have the largest online workforce. We have integrated them with the formal economy. I have done some work here as part of my responsibility.

What I am basically trying to do is making the environment friendly for the investors, businessmen and citizens. And the citizens are having the benefits of the online system.

Digital media or internet has been a part of our everyday life. What do you think about the internet speed in Bangladesh?

Bangladesh has almost 4,900 unions. The fiber optic backbone has been linked to almost 3,000 unions. There is no problem of internet speed in these unions. But there are some areas with problems. We are working on that.

What big things are waiting for us in 2021? What is your opinion?

The biggest thing we have to look for in 2021 is the mass vaccination. And you should congratulate the government. If Indian government approves the vaccine in next two to three days, our government would approve it in the next seven days. That means we should have the vaccine in Dhaka within 10 to 15 days. And we will start the vaccination programme.

So, can we say that we are going to start vaccination programme in January? Are we prepared?

Yes. Your paper has done a very good report on that. So, that is the biggest thing going to be happened. If the vaccination is done worldwide and also in our country that will bring us to the normal situation. 

The second thing is that the works on special economic zones will start at a high speed. Infrastructures will improve tremendously. There is another thing of which no one is talking about. There were a lot of criticism. That is the decision of capping the interest rate. Many people were saying that it is a wrong decision. The banking would be hurt. But what happened is the opposite.

But what happened is just the opposite. You see, liquidity has increased and everybody has accepted the 9% interest rate. For the business community, it is fantastic.

You said that foreign investment may remain sluggish, but domestic investment may rise in 2021. How do the business communities feel about that? Will they take more bank loans and go for business expansion next year?

Absolutely. Two things happened simultaneously here. The interest rate was capped and the Securities and Exchange Commission got a total new leadership. It got new chairman and members. Now you look at the vibrant stock market and the arrival of Robi in the market. And the bond, Sukuk arrived in the market. 

The bottom line is financial elasticity, financial diversity increased a lot. I feel there will be a lot of different opportunities for Bangladeshi businessmen in 2021. On top of this, we launched Taka bond with the IFC (International Finance Corporation) in London Stock Exchange. IFC now saying they have much more appetite for more Taka bond. 

I think 2021 will have domestic investments, and we will be reaping the benefits in 2022. You will see the investment rate will be going up considerably. 

The other thing we are working on now, which is very important, is SME. When the government announced the stimulus, we discovered that there was no complete record about them to reach out to them with the support. The enterprises are not well organised.

Foreign reserves are now in a good health. What do you think about giving loans for infrastructural development from the reserves?

The finance ministry has already said the decision about it will be finalized before the next budget. The background of the topic is the prime minister told us to examine whether we can give infrastructural loans from the reserves. Subsequently, two groups emerged supporting and opposing the move. 

The government at this moment does not have any final decision on it.

What do you think about corruptions as business development obstacle? What are the sectors likely to grow fast in 2021?

I am not defending corruption in businesses here. There are two types of corruption – corruption at the highest level, and the second one is at the lower level.

We do not have the first one. No foreign or local businessmen would claim that he or she had to bribe for getting licence. The lower tier of corruptions is at customs or land offices. Digitisation or providing the services through online will solve it.

Who will clean up the mid-level and lower level corruptions?

Since the highest level of the system is clean, the lowest tier will be purified gradually and automatically.

Thank you for your time and the interview.

Thank you, too.