High inflationary expectations, volatile exchange rate, and wage hike will make the confidence level fall slightly in the first half of next year
The overall business confidence for the July-December period this year is expected to increase slightly, compared to the same period of the previous year, according to the Business Initiative Leading Development (BUILD).
In a report published on Monday, BUILD claimed the growth in confidence is mainly due to improvements in employment, telecommunication, electricity and gas supply, financing from sources other than banks and in ease of acquiring licenses and permits.
However, high inflationary expectations, a volatile exchange rate, and wage hikes will make the confidence level fall by a small margin in the first half of 2020, the report added.
BUILD, a joint initiative of the Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry (MCCI) and Chittagong Chamber of Commerce and Industry (CCCI), published the report at a hotel in Dhaka.
According to the fourth edition of the Bangladesh Business Confidence Survey, macroeconomic uncertainty, unofficial payment, costly logistics and taxation issues will worsen the business environment next year.
While presenting the results of the survey, Nusrat Jahan Tania, economist at BUILD, said that the overall Business Confidence Index is perceived to reach 10.87 points during the July-December period this year from 10.32 points in the corresponding period of the previous year.
"The index is set to drop to 10.84 points from January to June in 2020," she added.
The standard average point is set at 10 for the survey. BUILD carried out the survey between March and August 2019, covering 250 businesses across the country to understand the perception of business enterprises about the existing state of the business environment.
At the launching ceremony of the report, entrepreneurs asked policymakers to reform the business environment to actually ease doing business in the country – not just for improvement on an index.
They also expressed their resentment at various government offices for taking extra time on tasks like registering, approving, and handing over ownership of a business.
Commerce Minister Tipu Munshi, chief guest at the event, agreed to the existence of unnecessary delay in many government offices.
He also expressed annoyance at the office of the Registrar of Joint Stock Companies and Firms (RJSC) – under his ministry – for taking six months to hand over shares of a company owned by Tipu's friend to his friend's son.
Former finance minister Abul Mal Abdul Muhith, said that the government should expedite the process of transferring shares, properly valuating shares, developing the bond market and checking default loans in the banking sector.
Speaking at the event, Commerce Secretary Jafar Uddin said that the government cannot do everything alone, without the help of the private sector. He also suggested that the government must reduce the interest rate for entrepreneurs to improve the business environment.
Md Sirazul Islam, executive chairman of the Bangladesh Investment Development Authority, stressed fighting corruption to improve the business environment.
Among others, MCCI Vice President Golam Mainuddin, BUILD and MCCI President Mahbubul Alam, BUILD CEO Ferdaus Ara Begum, and head of the Department for International Development in Bangladesh Judith Herbertson also spoke at the event.