Ease of Doing Business: status of 2021

Ease of Doing Business: status of 2021

International Business Forum of Bangladesh (IBFB) and Bangladesh Enterprise Institute (BEI) jointly organized a webinar titled on “Ease of doing business: status of 2021” on TODAY, 17 May, 2021 via ZOOM video conference.

International Business Forum of Bangladesh (IBFB) and Bangladesh Enterprise Institute (BEI) jointly organized a webinar titled on “Ease of doing business: status of 2021” on TODAY, 17 May, 2021 via ZOOM video conference.

Mr. Md. Sirazul Islam, Executive Chairman, Bangladesh Investment Development Authority (BIDA) was present at the webinar as Guest of Honor.

Mr. Jibon Krishna Saha Roy, Director (One Stop Service and Regulatory Reform), BIDA presented the key note paper at the webinar. Ambassador M Humayun Kabir, President, BEI delivered the welcome remarks in the webinar. Mr. M.S. Siddiqui, Legal Economist & Vice President, IBFB, Dr. Muhammad Abdul Mazid, Former Secretary and Ex- Chairman, NBR & Chairman, Finance Committee, IBFB and Dr. A.F.M. Matiur Rahman, Former Secretary & Vice-Chairman, Industry Leadership Committee, IBFB spoke as Designated Discussants.

Mr. Jibon Krishna Saha Roy, Director (One Stop Service and Regulatory Reform), BIDA presented the key note paper at the webinar. Ambassador M Humayun Kabir, President, BEI delivered the welcome remarks in the webinar. Mr. M.S. Siddiqui, Legal Economist & Vice President, IBFB, Dr. Muhammad Abdul Mazid, Former Secretary and Ex- Chairman, NBR & Chairman, Finance Committee, IBFB and Dr. A.F.M. Matiur Rahman, Former Secretary & Vice-Chairman, Industry Leadership Committee, IBFB spoke as Designated Discussants.

Mr. Humayun Rashid, President, IBFB & Managing Director & CEO, Energypac Power Generation Ltd. was the Chairperson of the webinar.

The Doing Business report is not intended as a complete assessment of competitiveness or of the business environment of a country and should rather be considered as a proxy of the regulatory framework faced by the private sector in a country.

In Bangladesh credit is believe to be capital machinery finance and loan given against collaterals. In this globalized world, trade finance (TF) is an essential tool to enable the trade of goods, and increasingly services, allowing local firms and value chains to sell into global markets. Up to 80% of trade is financed by some form of credit, guarantee or insurance.

Trade finance is usually without collateral and the security is inbuilt in trade finance mechanism. It includes (a) Pre-shipment financing, (b) Post-shipment financing, (c) Warehouse receipt financing, (d) Factoring, (e) Supply Chain finance, (f) Leasing (g) guarantee etc. Banks in Bangladesh is far away from these modern financing products.

Factoring is a post shipment export trade finance without any collateral. Factoring has emerged as the most important source of working capital for small and medium sized enterprises (SMEs).

A perfect factoring need global standard common rule for cross border assignment of receivable. The United Nations Commission on International Trade Law (UNCITRAL) has prepared and UN Convention on the Assignment of Receivables in International Trade adapted by the General Assembly of the United Nations in 2001, the Convention provides uniform rules for the cross-border assignments of receivables and to provide uniform rules to facilitate cross-border receivables financing. Bangladesh yet to sign the UN Convention on the Assignment of Receivables in International Trade.

There is a wonderful policy decision of Bangladesh Government for re-export of LPG. On 16th February 2017. Bangladesh can also allow exporters to allow export all possible products in a manner similar to LPG export to our neighbours. It may take advantage of being neighbours of India, China and ASEAN countries.All the countries around us such as India, China, Sri Lanka and all other ASEAN country allow re-export but why the re-export is restricted except LPG may be a surprise question.

In a recent study find that Dhaka airport service is costlier than Kolkata and Colombo. Exporters to find alternate route of delivery of their garments to buyers in west. The alternate ports are Kolkata and Colombo.

The cargos are transported to Benapole land port where Indian tracks are transporting to Kolkata Airport. Some other consignments transported to Chattogram and the shipped to Sri Lanka than the airlift to western customers through Colombo airport. After all these transportation, the services of Kolkata and Colombo airport are practically cheaper than Dhaka airport.

At last, National Board of Revenue (NBR) has, in principle, decided to allow setting up private inland container depot under Dhaka Customs House to ease congestion at air cargo village at Dhaka Airport.

The off- dock policy should be prepared by experts instead of official of NBR. The proposed 100 Free Trade Zone many create opportunity of competitive service to exporter from within the country with the setting up of ICT type service from some of the Free Trade Zone. This service should be allowed from all the proposed 100 Free Economic Zone of the country.

Transports Internationaux Routiers (TIR) is a convention of International Road Transport is governed under the TIR Convention, 1975. The TIR Convention facilitate the cross border carriage of goods by road from one customs office of departure in one country to a customs office of destination in another country, through as many countries as required, without any intermediate frontier check of the goods carried, unless customs authorities decide otherwise.

Bangladesh to become regional transit and investment hub focusing the Chinese, Indian and ASEAN market in order to gain form fortune of neighbor of such big markets. It should also promote BBIN initiative to promote connectivity and immediately ratify the TIR convention. At the same time steps should be taken to step of trade facilitation and reduction of customs tariffs and supplementary duties etc. Bangladesh can take the benefits of TIR convention only with internal reforms and readiness to serve the region as trading hub such as the Netherlands, Singapore or Dubai.

China has recently ratified the TIR Convention to become the 70th contracting party in 2016. China and India have ratified the UN TIR Convention but Bangladesh not yet signed it although has given transit to India. India ratified the convention after announcement of Chinese B&R initiative to become regional hub before China takeover the market.

The National Board of Revenue (NBR) issued SRO on Customs Ruling (Advanced)-SRO No. 188-AIN/2016/37/Customs on June 2, 2016. But the authority has given few ruling fixing the customs duty at higher slab reportedly to increase the revenue although advance ruling has been developed for fair assessment of customs in order to facilitate the doing business.

and distribution functions for client companies. Some 3PL services focus on specific segments, like product sourcing or freight shipping. Others fill multiple needs, like warehousing and distribution to end users. Bangladesh should amend the law and allow service of Supply Chain Management (SCM) and handle outsourced procurement, transportation and distribution functions for client companies. 3PL companies need huge investment, technology and global experience.

There are few global 3PL companies have set up in Bangladesh and active in bulk supply of food grain and others. Their scope of service is very limited to certain government jobs. They are supplying heavy equipment for some mega projects like Padma Bridge and Ruppur nuclear plant as special cases. These transportations require special types of vessels and vehicle for internal transportation.

Bangladesh customs and other law do not permit 3PL companies to support garments and other business to take service of 3PL companies for import and export. It is possible through The Free Trade and Warehousing Zones (FTWZ) is a special category of Special Economic Zone and governed by the provisions of the SEZ Act and the Rules. Free Trade Warehousing Zones (FTWZ) are fostering the growth of the logistics market in India and helping identify it as an independent sector by the government.

Bangladesh must allow FDI in the logistic sector amending the law and policy.

NBR already nominated some Pharmaceutical companies for Authorised Economic Operator (AEO) facilities on trial basis and let us hope for successful implementation of the reform. In this program, consignments passing from origin to destination within such a chain would benefit from an integrated cross-border simplified procedure, where only one simplified declaration with minimum information would be required for both export and import purposes. Now the major challenge is the mutual recognition of AEOs. Mutual recognition arrangements of AEO of one country is mutually accept by customs of other countries.

Container Security Devices (CSD) plays a crucial role in ensuring the integrity of the container along the supply chain and facilitating trade and Customs processes. Cargo security can be enhanced through the use of both mechanical and electronic seals.On 27th October 2019 to widen its coverage for transportation of export-import goods at all customs houses and all the mode of transports such as cargoes, covered vans, trucks, railway wagons and cargo vessel hatches apart from containers. The exporters are opposing the rule but it should be strictly implemented in order to maintain the security and above all the trust and confidence of overseas buyers.

The efficient and integrated organisation of such activities is often referred to as global logistics or supply chain management (SCM), and it has become the core of global competitive power. Among the innovations which have effectively attracted the people’s attention are Supply Chain Management (SCM) and third party logistics (3PL). 3PL companies handle outsourced procurement, transportation

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