Corruption is the major challenge to doing business, believe 88% respondents in a business status and sentiment survey by Sanem and The Asia Foundation
All businesses from every sector suffered in the April-June quarter of this year due to over two months of nationwide shutdown put in force to curb the spread of the novel coronavirus.
Their perception of the status of business has improved a bit now to yield a yet moderate but better confidence for the July-September quarter, reveals a business confidence survey by the South Asian Network for Economic Modeling (Sanem) and The Asia Foundation.
In a scale of 0-100, the index for overall confidence of businesses for the running quarter stands at 51.06, while the index for their perception of the status of business in the April-March quarter came down to 26.44 compared to the same period a year ago.
Researchers believe a reading up to 25 is much worse and up to 50 is worse. When reading goes above 50 it indicates respondents perceive something better than before but until it crosses 75 the confidence is not high enough.
Representatives of 303 firms, from micro to large ones, from manufacturing and service sectors across Bangladesh were questioned about their confidence on profitability, investment, employment, wage, costs of business, and sales or export. They have expressed their increased confidence for this quarter that has got rid of lockdowns and shutdowns but still suffers uncertainties.
Sub index of their confidence in each of the areas are above 50 at present, except in cost of business which is at 44.8, indicating further deterioration from the previous quarter of shutdown after the pandemic.
Businesses struggling to recover from the shutdown fallout that forced their Business Status Index for the April-June quarter to a level below 30 now say corruption is the major challenge to doing business, which leads to further increase in their costs of doing business.
Some 88 percent of the respondents in the yet biggest business confidence survey in the country have identified as corruption is the main challenge for them to do business.
Both local market and export data were in downtrend before the pandemic had arrived, Business Status Index for April-June came down to 26.44 when situation compared to the same period a year ago. It fell less to 29.48 compared to the previous January-March quarter of this year.
"But there was a sense of feeling good among businesses, which is absent now," said Barrister Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry (MCCI).
She was talking in a webinar arranged by the researchers of the sentiment survey led by Sanem Executive Director Dr Salim Raihan, where Commerce Minister Tipu Munshi was the chief guest and the prime minister's Economic Affairs Adviser Dr Mashiur Rahman spoke as special guest.
Former MCCI president Syed Nasim Manzur, also the managing director of Apex Footwear, told the online event that in the uncertain time costs of both doing business and living as mass reduced as governments are reducing duties and taxes and businesses are selling their stocks cheaper.
Although buyers of Bangladeshi factories are coming back with restored orders, they are offering much lower prices and also are delaying bill payment.
In such a situation, officials at many government offices are asking for more speed money or bribes to offset low frequency in the days of limited-scale operation, said the entrepreneur, while others also seconded him with a call to stop corruption and opt for ways to ease ways to invest, manufacture and sell.
Abul Kashem Khan, Dhaka Chamber's former president and current chairman of business initiative group BUILD, called for more inclusive stimulus alongside making it easier to access.
Large firms' confidence reading is at 53 right now, while it is just above 50 for micro, small and medium businesses.
Only pharmaceuticals, retail and financial sectors' confidence index for cost of business is now either at 50 or little above, while all others — readymade garments, textile, leather and tannery, food processing, light engineering, other manufacturing, wholesale, restaurants, transportation, IT and telecommunication, real-estate and other service — perceive a deterioration in cost situation.
Asif Ibrahim, chairman of The Chittagong Stock Exchange (CSE), emphasised revisiting the perception on strong revival of exports markets.
Dr M Masrur Reaz, chairman of think tank Policy Exchange of Bangladesh, said the economy needs three things now — immediate protection from the pandemic for the sake of sustainable recovery and also an image to the world, resilience of the enterprises so that they can retain jobs, and a revival plan for 3-5 years which would include strengthening domestic and external demands and smoothening supply chain and investments.
Japanese believe Bangladesh has a better policy for investors but they prefer India often only because of the policy stability and predictability there, he informed policymakers.
The special guest Dr Mashiur Rahman spoke on the importance of tax policy rationalisation while commerce minister welcomed the precise surveys of businesses and requested the researchers to extend the topics further up to foreign direct investment.
The Asia Foundation was represented in the webinar by Kazi Faisal Seraj, its country representative here.
The two groups, SANEM and Asia Foundation, announced to conduct and publish the same survey updates in the next three quarters of this fiscal year so that the sentiment can be followed up alongside tracking the status updates.