Politicisation of business associations: A barrier to economic progress

Over the past decade and a half, especially in the last ten years, business associations have largely failed to play an effective role in safeguarding the interests of businesses. They not only neglected the concerns of business owners but also remained silent on the economic damage taking place in the country.

The primary reason for this failure lies in their partisan allegiance, which has progressively weakened most business associations. Consequently, predatory groups have gained strength, siphoning off billions of takas from banks.

While the primary responsibility for curbing such predatory practices rests with the relevant government authorities, the business associations' failure to fulfil their roles has ultimately harmed genuine business owners. These associations have been unable to advocate for easier access to loans or take a stand in support of businesses facing financial losses.

However, not all business associations were ineffective or partisan during this period. A few genuinely attempted to fulfil their responsibilities.

Broadly speaking, over the past one to one-and-a-half decades, the country's business associations have been at their weakest. The main reason for this decline is the ruling party's strategy of reshaping these associations to align with its own interests. 

This has involved appointing loyal individuals to key positions, regardless of their knowledge of policy or expertise in business.

In some cases, individuals with little more than a basic trade licence – or no real business operations at all – have assumed leadership roles in business associations. These individuals, accompanying the prime minister on foreign trips, used these opportunities for self-promotion and, in some instances, to engage in illegal activities.

Business associations have been reduced to extensions of political offices, neglecting the very businesses they were meant to protect

Rizwan Rahman, Former president, DCCI

Some have even leveraged their positions in prominent business associations, such as becoming directors of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), to gain access to prime ministerial delegations and advance their personal business interests. 

For instance, a CNG pump owner represented a district chamber and served as an FBCCI director for ten years. His primary qualification was his role as vice-president of the district Awami League. There are countless such examples, reducing the country's top business association to little more than an extension of the ruling party's office.

There was a time when the FBCCI actively criticised government policies, including fiscal and monetary frameworks. Sadly, that critical voice has disappeared in recent years.

Concerns have also been raised about the transparency, efficiency, and accountability of the Directorate of Trade Organisations (DTO) and the Ministry of Commerce, which oversee trade associations. Many companies that exist only on paper have been approved as associations or chambers by the DTO.

The leaders of these associations often show little interest in trade organisations or the businesses they represent. Instead, they focus primarily on vote-buying and selling. Previously, this entire process was controlled by a handful of so-called business mafias.

These associations frequently fail to hold annual general meetings (AGMs), neglect to submit tax returns, forgo audits, and avoid conducting leadership elections. Essentially, they operate as fake organisations that, through political influence, dominate the electoral field and trade associations.

The question now arises: should individuals with close ties to the government be entrusted with leading trade associations? My view is that those who can effectively highlight business issues and safeguard the interests of businesses, while maintaining a good relationship with senior government officials, may certainly be given such responsibilities. However, they must not act as government sycophants; they must be honest and competent.

Moreover, anyone wishing to represent associations in trade organisations must establish and operate them in compliance with their founding principles. The Directorate of Trade Organisations (DTO) must cease approving fake associations. These associations must hold AGMs and elections annually to ensure accountability.

Additionally, in some organisations, individuals use various tactics to cling to the president's position beyond their designated term. Such practices must be curtailed, and these individuals should be required to retire at the end of their tenure.

TBS senior correspondent Reyad Hossain interviewed Rizwan Rahman over the phone