Corruption remains the biggest barrier for doing business for majority of enterprises in Bangladesh, the Centre for Policy Dialogue (CPD) said today.

However, the severity of its impact has been gradually shared with other structural and newly emergent problematic factors, CPD Research Director Dr Khondaker Golam Moazzem said while presenting the report titled "Bangladesh Business Environment 2022: Findings from the Executive Opinion Survey" at its Dhanmondi office on Sunday (29 January).

CPD Executive Director Fahmida Khatun was also present at the event.

"The current situation is unstable. We have the pressure of inflation on one side, then there is the crisis caused by the Ukraine-Russia war, also there are geopolitical factors for which even big economies are going through recessions," Fahmida Khatun said.

"Many international organisations like World Bnak, the IMF have forcast that it will linger till 2024. Many big economies will enter recessions. The whole world is stuggling, people in Bangladesh are also stuggling with food price, fuel inflation. Individuals as well as businesses are facing pressure due to this," she added.

"The other major problematic factors include inadequate infrastructure, limited access to finance and inefficient bureaucracy, The emerging factors include inflation, foreign currency instability and policy instability – hence the challenges are multiplied through new factors," the report said.

The research found in its survey that 64.6% think corruption is the biggest obstacle to doing business in the country.

CPD carried out the "Executive Opinion Survey (EOS)" from April-July 2022 in partnership with the World Economic Forum (WEF).  The objective of the survey was to appreciate the perception of entrepreneurs and businessmen on the state of business competitiveness and factors and institutions responsible for long-term growth, especially during the post-pandemic period.

According to the report, the business environment in the country did not show any considerable progress during 2021-22 – either it was stagnated, or it was deteriorated compared to the previous year.

"Institutional inefficiencies and weaknesses have further worsened though some improvement has taken place sporadically," it added.

The CPD report also said that Bangladesh's financial sector needs major overhauling.

"Financial sector needs major overhauling which could be initiated as part of complying with the International Monetary Fund's (IMF) loan conditionality – amendment of bank company act, lifting the cap on lending rate to ensure better access of SMEs, transparency in outstanding loans, the effective oversight role of the central bank, Security and Exchange Commission (SEC) and Insurance Development and Regulatory Authority (IDRA)," the report said.

The report said that the competitive environment in businesses has further deteriorated due to the lack of proper practices of corporate governance, weak regulatory oversight and lack of corporate ethics.

"The Competition Comission, the Consumer Rights Protection Division of MoC, Central Bank, the NBR and Ministry of Finance should play due role in ensuring competition in the market," CPD said, adding, "Companies playing the role of "dominant market player" need to be regularly monitored in their operations in different segments of markets and supply chains."

An inclusive supply chain in major sectors needs to be developed with the assured presence of SMEs in each segment of the supply chain, the study said.

The report also added that business-related information needs to be disclosed in an integrated information and data system to review the operations of players in the supply chains.