Cutting the red tape: Revamping bureaucracy for an investment-friendly Bangladesh

As Bangladesh positions itself to graduate from the list of Least Developed Countries (LDC) and transform into a high middle-income economy, one critical determinant of success lies in its ability to attract and retain both domestic and foreign investment. 

While infrastructure, fiscal incentives, and macroeconomic stability are important components, one often overlooked yet foundational pillar is the structure and orientation of the civil service.

A forward-looking, investor-responsive, and accountable civil service can function as a catalyst for economic transformation. Conversely, an outdated, rigid, and bureaucratic administrative system can nullify the best of investment policies. 

In Bangladesh, where administrative legacy still reflects colonial-style control and compliance rather than facilitation and service delivery, a structural overhaul is no longer optional — it is essential.

Investors, whether local entrepreneurs or multinational corporations, seek predictability, efficiency, and transparency. Critics claim that red tape, overlapping mandates, slow approvals, and lack of coordination among departments often create an ecosystem that is risk-averse and time-consuming. 

Critics also claim that often it can take six to nine months to obtain all the permits and clearances for a large-scale industrial project in Bangladesh. Besides, over 30 different approvals are required for setting up a factory, many of which are not digitally coordinated. Additionally, delays in land allocation, environmental clearance, tax registration, and utility connections remain persistent issues.

These procedural inefficiencies are symptoms of a deeper structural rigidity in the civil service — one that is not aligned with the fast-paced demands of today's investment landscape.

Now, let us examine how other countries have successfully restructured their public service system to facilitate investment. 

If we look at Singapore, which adopted the Economic Development Board (EDB) model, we can see the difference. Singapore's civil service is globally renowned for being professional, technocratic, and performance-oriented. The EDB operates as a one-stop investment facilitation body staffed by highly trained civil servants with expertise in trade, technology, finance, and law. 

Usually, staff are recruited based on domain knowledge, not just through generalist exams. Officers undergo global exposure, including placements in MNCs and foreign governments. Alongside, decision-making is fast-tracked through delegated authority, enabling investment licensing within days, not months.

Rwanda can be an example. Despite being a low-income country, Rwanda has consistently ranked among Africa's top five for ease of doing business. In Rwanda, the specialised Rwanda Development Board (RDB) acts as the single-window authority for all investors. 

Civil servants are hired on performance-based contracts with specific KPIs for investment facilitation. Besides, electronic portals manage approvals and allow investors to track progress in real time. Additionally, decision-making power is decentralised to regional offices, allowing local-level investment approvals. 

The UAE introduced "Customer Happiness Centres," where public services — including investment-related services — are delivered through a private-sector-style interface. All ministries have service excellence units, and performance is tracked using citizen satisfaction metrics.

Based on the ground reality and global lessons, Bangladesh must undertake structural, procedural, and cultural reforms. Structural reforms are crucial. It is important to create a dedicated "Economic Governance Cluster" within the BCS framework, consisting of officers specialised in finance, international trade, digital economy, and industrial policy. 

Besides, the introduction of Key Performance Indicator (KPI)-based appointments at mid and senior levels can be instrumental. Additionally, the establishment of "Fast-Track Investment Service Units" in key ministries, such as Industries, Power, Land, and Environment, can expedite overall efficiency.

Procedural reforms are also important. Strengthening BIDA's role with executive authority to enforce decisions across ministries is necessary. Importantly, it is also crucial to introduce a National Investment Single Window (NISW) platform to integrate all approval systems with tracking dashboards, timelines, and auto-alerts for delays. 

Moreover, it is essential to sign inter-agency service-level agreements (SLAs) with penalties for non-compliance. Bangladesh can adopt Vietnam's model, where Vietnam's "National Public Service Portal" has cut approval times for new investments by over 50%.

Performance and accountability reforms can bring in changes. It can be instrumental to introduce Investors' Satisfaction Scorecards, where feedback on bureaucratic conduct directly affects annual evaluations. 

Alongside, we can establish an independent oversight unit within BIDA to monitor bottlenecks and publish periodic reports. For instance, Malaysia's PEMUDAH taskforce identifies regulatory pain points for investors and ensures immediate bureaucratic response.

Decentralisation and local empowerment are equally important alongside other initiatives. Setting up District Investment Facilitation Cells (DIFCs) under deputy commissioners with trained officers in investment support can be beneficial. It is crucial to provide these units with authority to approve small-to-medium investments and coordinate with utilities, banks, and land offices. 

For example, Ethiopia has zonal investment desks with localised authority for industrial park approvals.

Furthermore, we need to shift the culture of civil service from gatekeepers to partners. We can launch a "Civil Servants for Investment" capacity-building program to train officers in customer service, investment ethics, and global competitiveness. In addition to that, we can develop public-private dialogue platforms at national and divisional levels to bridge gaps between investors and bureaucrats. 

We can learn from Georgia, where Georgia's "Produce in Georgia" campaign is led by civil servants trained in sales, marketing, and business development — not just administration.

This journey is not without challenges. We may need to deal with political economy issues, where reform may clash with vested interests. We also need to address bureaucratic resistance to change, especially where power and discretion are diluted. Alongside, institutional overlap can be challenging unless mandates are clearly defined (eg, BIDA vs sectoral ministries). 

These must be addressed through a whole-of-government approach, political will, and sustained stakeholder consultation.

Bangladesh's civil service must evolve from a compliance-focused bureaucracy into a service-driven enabler of economic growth. Mere digitalisation or policy updates will not suffice unless the core structure, incentives, and accountability systems of the civil service are redesigned to meet the needs of 21st-century investors. 

The path forward is not incremental but transformative. A leaner, smarter, and investment-centric civil service could be one of the most valuable assets Bangladesh builds in its journey toward prosperity.

Sketch: TBS

Dr Mohammad Kamrul Hasan is Public Administration and Public Policy Researcher and Analyst. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.