The International Finance Corporation (IFC) has taken up a multiyear programme tailored to cut the cost of doing business in Bangladesh, thereby making significant dent in the countrys overall investment climate. The idea of the IFC, the private sector window of the World Bank, is to attract both local and foreign investment, and encourage the investors to exude their social and corporate responsibilities.

The IFC will be pooling US$55 million, cofinanced by the UKs Department for International Development and the European Commission, into a fund that will be spent over the next eight years with a multipronged approach, IFC officials said. Under the project, the IFC team will be closely working with a host of stakeholders, notably the government and the private sector, to overhaul the countrys regulatory framework governing trade and investment.

The regulatory intervention is the key objective of the IFC as the Washingtonbased agency is moving ahead with the plan. The IFC team will aid the government to hone an action plan for easing the oftencomplicated processesCustoms clearance, foreign loans approval and investment registration.

Bangladesh is paying a price for not being open to trade. It takes 38 official signatures and 57 days to import anything into the country, compared with 24 days for China, 39 days for Pakistan and 43 days for India, according to a World Bank study. The project will give top priority to capacity building of both the private and public sectors empowering them to meet the challenges of globalisation.

The experimental project, first of its kind, will be implemented in two phases and the IFC will go for the second phase, riding on the success of the first segment, IFC officials involved in the project said.
Primarily, the IFC will be working with the Board of Investment, the official agency for investment registration, to change foreign investment regulations and develop the institutional capacity to handle large investment proposals.

If needed, the IFC experts will assist Bangladesh to negotiate mega investment proposals, such as proposals by Tata and Dhabi groups. The IFC team will train up government officialsfrom the toplevel bureaucrats to the midlevel officialsin this regard. Of the project components, one will be to set up industrial units adjacent to the economic zones with a view to avoiding industrialisation without taking environment into account.

The IFC also plans to encourage the government to involve the private sector in setting up industrial parks changing rules. Today, the entire economic zone regime is dominated by the public sector. Gradually, IFC want to involve the private sector to set up industrial parks. The IFC will be conducting competitiveness studies at the district levels with a broader goal to promote industrialisation outside the capital.

IFC officials claimed the project to be implemented in Bangladesh was a pioneering work of the global institution. In addition to the government, the IFC will be working with thinktanks, chambers, industry groups, professional groups and other stakeholders in a bid to improve the countrys investment climate. The private thinktanks and chambers will be assigned to do longterm research on investment climate.

Explaining the possible benefits, the IFC economist said the pioneering work would help reduce the cost of doing business while ensuring that the private sector operates in a socially responsible manner,