Governance failure major risk to doing business in BD

Reveals World Economic Forum report

The failure of national governance becomes a major risk to doing business in Bangladesh and also in two other South Asian nations Nepal and Sri Lanka, according to a recent report released by the World Economic Forum (WEF).

The report titled 'Regional Risks for Doing Business' highlights 10 major risks to doing business in these countries.

"Political and economic concerns predominate among businesses in South Asia, with cyber-attacks also viewed as a concern," said the report.

The risks were identified after the global forum carried out an executive opinion survey during January-June period of the year. The findings were later tabulated with top five risks to five countries in South Asia- Bangladesh, India, Nepal, Pakistan and Sri Lanka.

By conducting the survey, the forum tries to look at the regional risks 'through the prism of the private sector'.

National governance failure is an issue. "This sentiment corresponds with a particularly busy political period in the region," the report said.

The national elections were held in Pakistan in July this year and Nepal in November and December last year. Another three are expected by the end of the year - in Bangladesh, Bhutan and the Maldives.

"The election process is often viewed with anxiety in South Asia as it can be accompanied by violence, blockades and other forms of political tension," observed WEF report. "Elections can also be followed by periods of uncertainty."

For Bangladesh, the 'energy price shock' is identified as top risk followed by national governance. Three other risks are: cyber-attacks, failure of regional and global governance and unemployment or underemployment.

The failure of regional and global governance featured most prominently in Nepal and Bangladesh.

Refugee and migration issues may be one driver of this, with approximately 700,000 people - mostly Rohingya - having fled from Myanmar to Bangladesh over the past year, noted the WEF report.

"In addition, India-Pakistan tensions remained ongoing in 2017, and there have been no bilateral talks between the two countries since 2015," it added.

The report said Bangladesh, Nepal and Pakistan are susceptible to cyber-attacks as "they continue to run on computers using Microsoft products that report malware encounters almost regularly."

The region's vulnerabilities came under spotlight after Bangladesh Bank was hit by hackers who got away with one of the biggest heists in the history, robbing the country's central bank of more than $80 million, said the report.

Private sector decision-makers in India and Pakistan, however, appeared more concerned by terrorist attack than national or regional governance failure.

Businesses in these two countries also identified water crisis as one of the top-five risks, which is also identified as a top risk in Pakistan.

The scope of this report, however, differs from the WEF flagship Global Risks Report, which presents a holistic assessment of the dangers facing the world. Regional report collects data from annual Executive Opinion Survey, which also provides input for the Global Competitiveness Report of the forum.

• Courtesy: The Financial Express /Nov 26, 2018