More and more multinational companies are winding up their operations in Bangladesh. The latest incident took place when foreign investors of Dutch-Bangla Bank, which is doing well amid troubled commercial banks, declared that they were going to sell their shares to Bangladeshi investors.
The decision was not greeted well across the market and to a great extent highlights the sorry state of business. It came at a time when GrameenPhone and Robi, two leading mobile phone operators of the country, are at loggerhead with the government over contested due taxes. Robi divulged to the press that consumers would pay the extra cost if government planned to go ahead with the collection of contested dues by hook or by crook, bypassing the arbitrary settlement process. Sea changes took place in telecom industry when GrameenPhone and Robi agreed to merge their operations in Asia. Following a negative reaction from the press , Telenor said they had postponed the decision.
Despite significant improvement of Bangladesh's ranking in World Bank's "Doing Business Report", world's leading brands and investors are leaving Bangladesh one by one. This does not lend support to the claim that sound business climate prevails in Bangladesh. At the same time major economic zones across the globe are crippled by economic slowdown. The situation is writ large on the falling order of RMG industry. The cash cow of Bangladesh economy has not registered the anticipated growth target in the ongoing fiscal year.
Even the domestic demand does not look so promising to many foreign brands. Singer sold all its sales outlets in Bangladesh to Turkish home appliances manufacturer Arcelor. Bata with its more than 1000 sales centers across Bangladesh made a profit of Tk 50 crore in 2018. Meanwhile, a sprawling slum could generate that much of money each month provided that we take into account regular cash given by the drug lord operating in the sum. I recently went to a Bata discount shop and saw shoes were up for sale at a quarter of their original price.
In the pharmaceutical industry, GlaxoSmithKline announced its closure of pharmaceutical division two years ago. Its consumer division was making profit back then. So the announcement came as a total surprise. This year French Sanofi declared that it would sell its operations here. Purdu pharma made similar declaration. Being a least developed country, Bangladesh enjoys some WTO advantages for making cheap drugs. This advantage did not bar these companies to take such harsh step. There has been some issues in the business environment or governance. None bothered to search the answer.
In IT, Accenture, an Indian IT firm doing some content related work for Telenor in Bangladesh, abruptly declared closure of its operations in Bangladesh. This kind of announcement did not send positive signal abroad to foreign investors. Meanwhile, key businesses and funds to stimulate business are being concentrated into the hands of some cronies who have proven that they are unable to bring the much needed wind of change in the economy. From garbage collection to public infrastructure construction, one can see the footprints of powerful oligarchs who spare no means to get rid of any competitor or obstacle. Recent drive against casino is an eye opener. Greed of the few brings down the whole system and corrupts the process of transparent dealing. In the end, government spending does not stimulate the private sector, plays no role to create any meaningful jobs and finds innovative ways to be laundered abroad.
A handful of groups are responsible for the bad loans that cause bankers and government officials to spend sleepless nights as piling up of bad loans poses serious menace to the economy. From container transportation through waterways to direct to home TV services, powerful oligarchs control the vital businesses , leaving little room for private sector, which will take the onus to propel the economy, to play any leading role.
This is indeed not a very promising sign for the future course of the economy, which requires a holistic growth approach to create more opportunities for all and to accelerate the trickle down process to dispel inequality.
One global brand after another abandons Bangladesh, mocking the indicators that say business climate is improving. Meanwhile, concentration of wealth into the hands of the powerful few augurs ill for Bangladesh economy.
The decision was not greeted well across the market and to a great extent highlights the sorry state of business. It came at a time when GrameenPhone and Robi, two leading mobile phone operators of the country, are at loggerhead with the government over contested due taxes. Robi divulged to the press that consumers would pay the extra cost if government planned to go ahead with the collection of contested dues by hook or by crook, bypassing the arbitrary settlement process. Sea changes took place in telecom industry when GrameenPhone and Robi agreed to merge their operations in Asia. Following a negative reaction from the press , Telenor said they had postponed the decision.
Despite significant improvement of Bangladesh's ranking in World Bank's "Doing Business Report", world's leading brands and investors are leaving Bangladesh one by one. This does not lend support to the claim that sound business climate prevails in Bangladesh. At the same time major economic zones across the globe are crippled by economic slowdown. The situation is writ large on the falling order of RMG industry. The cash cow of Bangladesh economy has not registered the anticipated growth target in the ongoing fiscal year.
Even the domestic demand does not look so promising to many foreign brands. Singer sold all its sales outlets in Bangladesh to Turkish home appliances manufacturer Arcelor. Bata with its more than 1000 sales centers across Bangladesh made a profit of Tk 50 crore in 2018. Meanwhile, a sprawling slum could generate that much of money each month provided that we take into account regular cash given by the drug lord operating in the sum. I recently went to a Bata discount shop and saw shoes were up for sale at a quarter of their original price.
In the pharmaceutical industry, GlaxoSmithKline announced its closure of pharmaceutical division two years ago. Its consumer division was making profit back then. So the announcement came as a total surprise. This year French Sanofi declared that it would sell its operations here. Purdu pharma made similar declaration. Being a least developed country, Bangladesh enjoys some WTO advantages for making cheap drugs. This advantage did not bar these companies to take such harsh step. There has been some issues in the business environment or governance. None bothered to search the answer.
In IT, Accenture, an Indian IT firm doing some content related work for Telenor in Bangladesh, abruptly declared closure of its operations in Bangladesh. This kind of announcement did not send positive signal abroad to foreign investors. Meanwhile, key businesses and funds to stimulate business are being concentrated into the hands of some cronies who have proven that they are unable to bring the much needed wind of change in the economy. From garbage collection to public infrastructure construction, one can see the footprints of powerful oligarchs who spare no means to get rid of any competitor or obstacle. Recent drive against casino is an eye opener. Greed of the few brings down the whole system and corrupts the process of transparent dealing. In the end, government spending does not stimulate the private sector, plays no role to create any meaningful jobs and finds innovative ways to be laundered abroad.
A handful of groups are responsible for the bad loans that cause bankers and government officials to spend sleepless nights as piling up of bad loans poses serious menace to the economy. From container transportation through waterways to direct to home TV services, powerful oligarchs control the vital businesses , leaving little room for private sector, which will take the onus to propel the economy, to play any leading role.
This is indeed not a very promising sign for the future course of the economy, which requires a holistic growth approach to create more opportunities for all and to accelerate the trickle down process to dispel inequality.
One global brand after another abandons Bangladesh, mocking the indicators that say business climate is improving. Meanwhile, concentration of wealth into the hands of the powerful few augurs ill for Bangladesh economy.
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