Trust, right reforms can set the stage for long-term growth

The private sector is struggling with many issues, which are already known and have been building up for years. Solving them will take time, but one thing is clear: rebuilding trust within the business community is essential. 

With a population as large as ours, creating new jobs and saving the ones that have been lost should be the government's top priority. If we can focus on keeping existing jobs and creating new ones, we could see improvements in the long run.

While issues like the energy crisis are clear, the tax system is also a big problem. The National Board of Revenue (NBR) and the way taxes and audits are handled make things harder for businesses. The current system isn't friendly to taxpayers, which has kept the country's tax-to-GDP ratio stuck. 

Many people also aren't declaring their assets correctly, which has led the NBR to introduce policies that are making things worse for businesses. It's time to rethink these old approaches. Businesses should not be forced into paying taxes in such an aggressive way. 

Working with the business community

One of the most important things we need now is more dialogue with the business community. Right now, discussions between the interim government advisers and the private sector people are happening on a personal level, but there isn't enough institutional engagement. The government needs to engage in a more structured way, maybe through a platform like the Better Business Forum, which was active during the 2007 caretaker government. 

It worked by forming committees with representatives from different industrial sectors. These committees helped identify problems and took quick actions to solve them.

I've been part of such committees under the Dhaka Chamber of Commerce and Industry, where we set targets with clear timelines: three days, seven days, one month, and three months. Based on the private sector's recommendations, actions were taken quickly, showing that the government and businesses can work together to get results. 

If we can set up something similar today, many of the current problems could be solved over time. In short, better collaboration with the private sector is essential.

Reforms are necessary

Without a strong private sector, the economy can't move forward. Business owners know how to boost trade, investment, and overall business activity. But it seems that there's a gap between their practical needs and the decisions being made. Private sector involvement is needed in every part of institutional and policy reforms. For example, tax reforms are being discussed, and an advisory committee has been set up. But these reforms need to be carried out quickly. 

Many good ideas about easing the process of doing business have been submitted over the years. Groups like the FBCCI, Dhaka Chamber, Metropolitan Chamber, and Chittagong Chamber have given solid recommendations, but these ideas are often ignored. If the government focuses on implementing these ideas, we could see quick improvements.  

These reforms range from simplifying tax laws to improving infrastructures and cutting down on bureaucratic obstacles.

Making business easier

The government's main goal should be to create a business-friendly environment. This means making it easier for people to invest their savings and achieve their business goals. The government should support this process, not stand in the way. 

But right now, starting a business in Bangladesh is tough. In the past, the World Bank's "ease of doing business" rankings often put Bangladesh at the bottom, highlighting how hard it is to run a business here. Too often, it feels like business owners are being treated like criminals, which damages trust. 

We need to move away from this "ruler and subject" mindset. The people own the country and pay taxes, but bureaucrats still act like they're above the people. This has to change. Every business owner contributes to the economy in some way, and they should be treated as partners in progress, not as subjects to be controlled. This outdated mindset, inherited from the British colonial era, needs to be broken now.

Reducing government waste

The government also needs to reduce waste. It shouldn't be running businesses. Instead, it should focus on industries that are crucial to national security, but not on managing companies like textile factories or airlines. For example, Bangladesh Biman could still be a state-owned company, but its shares could be sold to the public. 

Many other state-owned companies could be privatised, bringing in money and reducing the burden on taxpayers. Government subsidies to loss-making state companies should also be reduced.

Improving logistics, infrastructures

Bangladesh is falling behind when it comes to infrastructure, especially in logistics. Trade bodies like the Dhaka Chamber and Chittagong Chamber have been working to improve this, and a logistics policy has already been created. But the problem is that it hasn't been implemented well. The country's logistics and transport systems are not competitive, and this is hurting businesses.

Transportation costs in Bangladesh are much higher than in other countries. They range from 24% to 48% of the cost of a product, while globally, it should be under 15%. The World Bank has worked on improving the logistics sector, but many of these initiatives have been delayed. 

Inflation and high transportation costs are major concerns. Several factors contribute to these problems, including corruption within the transportation sector. The cost of logistics and transport is unnecessarily high, which raises the price of goods and services, making it harder for businesses to stay competitive. 

These costs can be reduced with the right focus, but only if the government and private sector work together to implement the right reforms.

Energy crisis: Finding long-term solutions

The current energy crisis, especially with gas and electricity, is another major concern for businesses. While temporary fixes may help, the real solution lies in long-term strategies. One option is to use more coal for power generation. 

Bangladesh has large coal reserves, enough to meet the country's energy needs for the next 75 years, even with an 8-10% growth in demand. But instead of using this resource, the country is relying on expensive imported gas and liquefied natural gas (LNG). This is only going to raise costs in the future.

Some people worry about the environmental impact of coal, but after the Ukraine-Russia war, even countries like Germany have turned back to using coal for energy. Bangladesh, with its low carbon emissions, could do the same. 

Solar power is another option, but it isn't enough on its own to meet the country's large-scale energy needs.