Business leaders on Wednesday expressed concern over bureaucratic hurdles, policy inconsistency, rising taxes and utility costs and a lack of support for startups, saying that these issues were hindering investment growth and economic development in Bangladesh.

At a seminar organised by the Economic Reporters’ Forum (ERF), industry experts underscored a series of issues that were discouraging both domestic and foreign investments.

The frequent changes in tax and VAT policies have created an atmosphere of uncertainty. Business leaders have pointed out that these sudden changes make it difficult to plan for the long term, with investors unable to predict future market conditions or make informed decisions.

Entrepreneurs have been facing significant barriers due to excessive bureaucracy, with some businesses requiring up to 27 licenses to start operations.

This complex and time-consuming regulatory process was seen as a major deterrent for new businesses, slowing down the growth of the private sector, business leaders said.

They said that frequent policy changes have eroded investor confidence, creating an unstable environment for business operations.

The unpredictability of laws and regulations has made it increasingly difficult for businesses to plan for the future, leading to a general sense of insecurity among investors.

Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun was the chief guest at a seminar held at the ERF auditorium in Dhaka.

Former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) A K Azad, FBCCI administrator Md Hafizur Rahman, CEO of LafargeHolcim Bangladesh PLC Iqbal Chowdhury and former president of the Dhaka Chamber of Commerce and Industry (DCCI) were present as guests at the event.

ERF President Doulot Akter Mala also spoke at the event.

BIDA executive chairman emphasised the government’s commitment to addressing investment challenges and his organisation identified over a thousand barriers to investment, with an initial focus on resolving 21 key issues.

He mentioned the government’s decision to limit public sector involvement in areas where government intervention was not essential.

He mentioned that jute mills, textile factories, and other industries, equipped with vast land and essential utilities, would be handed over to the private sector due to the government’s failure to provide energy to the developed economic zones.

AK Azad raised concerns about a 36 per cent decline in capital machinery imports and an 11 per cent drop in raw material imports.

He warned that rising taxes and increased natural gas prices could harm business, investment, job creation, and production.

Azad criticised the lack of effective policies, particularly in export sectors such as jute and shrimp, where foreign traders benefit by adding value to Bangladesh’s raw materials.

He urged the interim government to implement reforms, prioritising gas and electricity for industry over residential connections.

Abul Kasem Khan highlighted policy inconsistency as a significant barrier to business, citing fluctuating tax rates and VAT changes that make it difficult for businesses to plan.

He also criticised harassment by Customs and NBR, calling for a focus on regulation rather than competition.

Kasem emphasised the need for $50 billion in annual infrastructure investment and lamented the inefficiencies in public-private partnerships.

Iqbal Chowdhury stressed the importance of protecting existing investments before seeking new ones.

He pointed to bureaucratic hurdles, such as requiring up to 27 licenses to start a business, and issues with law and order.

Iqbal also criticised unstable policies and the inconsistent application of VAT laws, which burden compliant businesses while benefiting non-compliant ones.

Hafizur Rahman called for a reduction in VAT and taxes to support new businesses, urging the government to back startups with funding and a more supportive attitude towards failure.

He suggested eliminating the need to annually renew Import and Export Registration Certificates, streamlining the process.

Head of Business Development at BIDA Nahian Rahman Rochi revealed that FDI inflows had dropped to 0.3 per cent of GDP in the last fiscal year, from 0.5 per cent in FY2020-21.

FDI inflows had stagnated between $1.3 billion and $1.7 billion over the past four years, with only 45 per cent of this total as direct FDI, and the rest as intercompany loans or reinvestments.

The event was moderated by ERF Secretary Abul Kashem.