Recently news reports stated that a large foreign biopharmaceutical company had decided to abandon its intention to invest thousands of crores in Bangladesh. One of the reasons they cited was the lack of legal framework in Bangladesh to support such a venture. The company also mentioned long delays in getting the required project approvals. This should be an alarming example of how our regulatory system continues to fail us and stop the economy from realising its true potential.

Bangladesh has already reached a stage in its development lifecycle wherein it is essential to look beyond basic human needs and put immediate emphasis on numerous pending reforms necessary to create a system that aligns with its future aspirations. Unfortunately, as of today we are nowhere near such a target even from the perspective of other comparative developing countries. Our existing regulatory framework is barely functional at best, and this is constantly voiced by countless frustrated local and foreign companies wishing to do business in Bangladesh including development partners like World Bank and International Monetary Fund. Past initiatives like "Better Business Forum" and "Regulatory Reforms Commission" were also put on hold by the succeeding government.

Policymakers often speak about all the "ease of doing business" initiatives that have been implemented for fixing existing regulatory roadblocks that discourage investors. However, in reality, the situation is not in line with inspirational words of the country's leaders and policymakers. Rampant corruption, political interference, undue influence, and arbitrary roadblocks created by many public officials in almost every step of the business process has reached intolerable levels and have created hinderances to new investment and expansion. Immediate and major reforms are required in some of the most fundamental regulatory sectors.

Existing ambiguity and grey areas in the foreign exchange regulations continue to fail to prevent enormous money laundering schemes as well as the highly worrisome rapid depletion of foreign reserves. It appears that the relevant authorities are helpless to stop this either due to a lack of regulations or they may be even involved in aiding such unscrupulous activities. Hence, decisive regulatory reforms are needed in the existing foreign exchange rules.

Bangladesh still follows the Companies Act of 1994 as a fundamental guiding principle for regulations related to businesses. Are we still the same Bangladesh today that we were in 1994? Obviously not. Even India updated its own company law as recently as 2013 vide The Companies Act 2013 with new and more practical features. The same reform is needed here.

In spite of the formulation of Income Tax Act-2023, revenue collection continues to critically require more effective reforms. In recent years we have seen the middle and lower middle class bear the burden of increasing taxation to the point that it has become immensely unfair, and the new act has not really done much to mitigate this. Revenue authorities continue to try and increase the tax burden of those already exhausted. Non-compliance for a certain class is also not properly considered. Efforts to expand the revenue net have not really yielded any sort of substantive results and this continues to keep the tax-GDP ratio at unacceptably low levels.

However, no number of reforms and changes will have any favourable impact unless regulations are strictly enforced without any kind of political or influence related biases. Such political favouritism and undue influence are widespread in the country. It is almost evident that rules do not apply when it comes to certain highly influential individuals and so-called preferred business entities. Therefore, major reforms are also needed in law enforcement and public administration sectors themselves along with overall accountability improvement.

The writer is an economic analyst.