Role of bida and proposed one stop service act

Sunday, February 5, 2017

http://da ailyasianage.com/news//47315/role--of-bida-and d-proposed---one-stop-seervice-act

Role of BID DA and d propo osed One Stop Serv vice Actt M S Sid ddiqui

The Invesstment Prom motion Authority has the same s responssibility throu ughout the wo orld. This organizattion plays a iss very importtant role for a developing g country likee Bangladesh h where local and foreign in nvestment is very much needed n in ord der to increasse the share of o Industry an nd service in the

economy and for generation of employment.

It is usually a government agency with responsibility of securing new local and foreign direct investment in manufacturing and trading service sectors and to encourage existing investors to expand and develop their businesses.

It undertakes responsibility to build link between businesses and third level education and research centers in order to ensure that investors can recruit people with necessary skills, capabilities and productivity levels.

The investment board in Singapore Economic Development Board (EDB), is the lead government agency for planning and executing strategies to enhance Singapore's position as a global business centre.

It 'dreams, designs and delivers solutions that create value for investors and companies in Singapore'. Singapore has unique examples of skill development and human resources.

A model of joint training institutions by the EDB and leading Multinational Enterprises (MNEs) has also been established. The Japan-Singapore Technical Institute, the German-Singapore Institute and the French-Singapore Institute were recently launched.

Trade facilitation is a major concern of overseas investors since historically the customs and tax laws are one of the impediments of the investment in developing countries. The process of release of consignments from entry points, customs duty on import of raw materials, refund of import duty after export and re-export are primary concern of the investors.

The regulators should prepare guidelines aim to ensure timely processing of documents and prompt payment of claims made by manufacturers, importers and exporters. In order to guarantee duty drawback refunds, the Customs and Excise Division of Zambia has created a ring-fenced fund at the Central Bank.

All import duties paid are deposited into that fund. The fund is then used to pay duty drawbacks within a period of six weeks, following claims. The remaining balance, after all pending drawback payments have been made, is then remitted on a monthly basis to the Treasury. A similar system is used for refunding Value-Added Tax (VAT).

The investors are more concerned of corruption in import and export process to avoid unhealthy competition. Bangladesh Investment Development Authority (BIDA) under a law in 2016 has been created to upgrade the service to investors.

It must arrange business-public dialogue about investment impediments. The utilities and land are short in supply in Bangladesh and BIDA may take up the matter with the relevant departments to resolve the issue. They may initiate elimination of identified impediments to foreign direct investment as well as explore to identify the other problems.

The Ministry of Foreign Affairs has the task of assisting the BIDA in its promotional endeavor.

However, diplomats posted abroad should be given extensive training of investment promotion techniques.

The establishment of a technical training program for diplomats would be an effective means to build FDI promotion capacity. Training material should be developed, taking into account the specific needs of diplomats. The domestic orientation of many Bangladesh firms provides them with limited exposure to international competition.

To increase international competitiveness, productivity and production methods should be upgraded to international standards. Bangladesh has Competition law and the commission should work to create an atmosphere of healthy completion in the market.

Some companies like Grameen Phone, Unilever, British American Tobacco, even local companies like Pran, Walton etc are enjoying dominating market share due to lack of proper implementation of Competition Act. BIDA should have four objectives: An enhanced position for Bangladesh in regional and global markets, increased efficiency and accessibility of national markets, increased competence and capacity at the firm level and strengthened government private sector policy formulation, implementation, monitoring and evaluation.

To achieve these objectives, the BIDA contains actions at the international, national and firm levels like developing a Bilateral Investment Treaty Model to guide future negotiations and expand the double taxation treaty network, improving the application of the new labor law, develop a training program to increase productivity among factory, reforming the duty drawback refund system and set deadlines and penalties in the administration of customs duty drawback, attracting investment into new priority projects, developing a Land Bank Portal, setting up a tax information service, establishing a digital One-Stop Shop, designing an investment promotion training program for diplomats, organizing a matchmaking event for joint venture and organizing training and education to meet manpower demands.

The best way is to give services are through One Stop Service (OSS) centre. Now, BIDA should establish One-Stop Shop (OSS) for providing local and foreign investors with assistance in the initial stages of investment. The concept has been to assemble in one location, representatives from the `everyday` institutions, which investors visit to obtain various approvals, permits and authorizations.

These include institutions such as the Registrar of Joint Stock Companies, Stock exchange, Immigration Service, the Customs and VAT registration and payments booths, land purchase and renting facilities etc. For all possible services, the authority should provide investors with a webbased front-end office, which can handle all requests on behalf of mother agencies and ministries.

The procedures to start a company are done at a one-stop window that gathers all the concerned documentation.

The service should also be digitalized. The e-enabled OSS will further provide online access to officials in charge of clearing procedures and issuing licenses. It will also include all the required forms and the possibility to complete and submit these forms online. The e-OSS may be with online payments and an inbuilt monitoring system of approval flows will be included. It is seen as a solution to many of the logistical and administrative problems associated with a physical OSS. The physical OSS is, however, a prerequisite, to make the transition to an e-enabled OSS. The government is considering a One Stop Service Act) and arranged a stockholder meeting to get the opinion on a power point presentation of the proposed law but the draft law was not given to discussants. During the meeting, I wanted to have a copy of draft law but BIDA authority refused to give me.

But later on with the personal intervention of the Chairman KaziAminul Islam, the 'authority' gave me a copy of law in a lucrative folder. The law does not propose any mandatory regulatory authority to BIDA but proposed to allow BIDA to request other government departments to provide certain services.

Establishment of OSS is not an easy job. Practically all governments of other countries that tried to

implement this form of an OSS encountered significant resistance by the various government agencies responsible for the different administrative procedures. All the departments have their existing own policy. Most importantly, other ministries and agencies fear that the creation of such an OSS would result in curtailing their authority and mandate, quickly leading to intensive turf battles within the government bureaucracy. It seems that the authority have no idea of probable resistance and preventive measure within the draft law to face the challenges.

The basic idea is that an investor would only have to be in contact with one single entity to obtain all the necessary paperwork in one streamlined and coordinated process, rather than having to go through a labyrinth of different government bodies. OSS is one of several institutional substitutes governments often adopt to bypass or accelerate existing procedures where they are dysfunctional.

The law should authorize some of the government entities represented at the OSS to perform the services of their agencies and give approvals on behalf of them without having to refer to a higher authority.

BIDA is historically issue "approval" to the investors and not really promoting investments.

Interestingly, there is some more parallel organizations are 'approving' investments such as Bangladesh Export Processing Zone Authority, Bangladesh Small and Cottage Industries Corporation etc. They also have hardly any real promotional activities. We wonder whether BIDA is regulating authority of Investment policy of Government.

It must have some more regulatory authority to regulate and in some issues BIDA should have regulatory authority over certain services such as tax holidays reduced custom duties, guarantees against expropriation and sequestration, guarantees regarding foreign exchange and guarantees regarding repatriation of capital and profit. It also regulates the regime of the Free Zones both public and private.

These services should be regulated with close co-operation of BIDA. There are a number of laws and regulations should be aligned to make legally binding for other ministries and departments to accept the regulating authorities of BIDA. Law has given regulating authority over private investors but only advisory authorities to other government departments to support the investment but public sector also in business of manufacturing and services side by side with private sector.

Bangladesh must increase authority of BIDA through amendment of The Bangladesh Investment Development Authority Act, 2016 with a supremacy over other relevant departments rather than having proposed The One Stop Service Act. The existing law may authorize BIDA to set up one stop service centre.

The writer is a legal economist

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