The World Bank’s Business Ready report for 2024 has spotlighted areas of progress and challenges for Bangladesh, particularly in facilitating international trade. The report, a successor to the widely referenced Ease of Doing Business index, assesses 50 countries on various business indicators.
Bangladesh’s rank of 38th in the international trade pillar signals both noteworthy advancements and significant areas needing improvement, with a composite score of 53.86 out of 100.
A SHIFT IN FOCUS: The World Bank’s previous Ease of Doing Business report, discontinued in 2020, ranked Bangladesh 176th out of 190 countries in Trading Across Borders, underscoring the need for reforms in trade processes. Now rebranded as the Business Ready report, this updated analysis evaluates three core pillars—Regulatory Framework, Public Services, and Operational Efficiency—to provide a holistic view of a country’s business readiness.
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Under the International Trade pillar, Bangladesh achieved scores of 51.56 in Regulatory Framework, 29.52 in Public Services, and an impressive 80.50 in Operational Efficiency, showing a satisfactory capacity for process execution but substantial gaps in the availability and quality of public services.
INFRASTRUCTURE AND GOVERNMENT SERVICES: POINTS OF CONCERN: The report draws attention to major hurdles in Bangladesh’s Public Services pillar, particularly in two main components: digital and physical infrastructure, and border management.
In the area of digital and physical infrastructure, Bangladesh scored 19.64 out of 50. Here, challenges persist in integrating electronic systems across relevant agencies, facilitating data exchanges, and providing adequate trade-related information. Bangladesh’s electronic system scored zero, while transparency measures and trade infrastructure scored 12.50 and 7.14 respectively.
Border management presents an even starker picture. Bangladesh’s score of 9.88 out of 50 reveals gaps in risk management, coordinated border management, and expedited clearance for trusted traders.
Specifically, Bangladesh scored 2.50 out of 20 for risk management, 5.71 for coordinated border management, and 1.67 for facilities available to trusted traders, highlighting the need for streamlined coordination among both domestic agencies (Customs, Port Authorities, Quarantine departments, BSTI) and international trading partners.
NATIONAL SINGLE WINDOW AND AUTOMATION: Efforts are already underway to improve infrastructure and coordination. The National Board of Revenue (NBR) initiated the National Single Window (NSW) project in 2018 to create a streamlined, electronic data exchange platform among agencies. However, delays have slowed the anticipated benefits of this project, with more than six years passing since its inception. If expedited, the NSW could significantly bolster data-sharing capabilities and improve overall efficiency in the trade process.
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Alongside the NSW, NBR has introduced a suite of digital systems, such as e-auction, e-payment, and e-appeal, and is working to automate the bonded warehouse management system. The NBR also offers legal and regulatory information through its websites, which are undergoing updates to improve accessibility.
Furthermore, a Customs Risk Management Commissionerate has been established, and work is underway to implement an Automated Risk Management System (ARMS). This new system is expected to identify and facilitate the clearance of low-risk shipments, freeing up resources to scrutinise higher- risk cargo. Yet, the relevant regulatory framework is still awaiting approval—a step that could accelerate improvements in risk management once finalised.
BUILDING COORDINATION AT THE BORDER: In September 2024, the NBR formed a Border Trade Coordination Committee, chaired by Customs Commissioners, to improve collaboration among both public and private stakeholders. The committee is expected to enhance internal border management.
Additionally, further activating the Joint Group of Customs Forum with India, Nepal, and Bhutan could bolster cross-border coordination and streamline bilateral processes.
Bangladesh’s efforts to build trust with trade partners have seen initial progress through the Authorised Economic Operator (AEO) programme, which grants preferred status to businesses with proven reliability. First launched in 2019, the AEO programme has now expanded to 15 companies, allowing for faster clearance and reduced documentation for trusted traders. In 2024, new AEO regulations introduced the concept of an AEO Centre, designed to administer and enhance the benefits available to authorised businesses. If successfully implemented, the AEO programme could incentivise compliance and facilitate smoother trade operations.
LOOKING AHEAD: The Business Ready report underscores Bangladesh’s potential to enhance its business environment through continued modernisation of trade facilitation measures. However, the NBR alone cannot achieve these ambitious goals. Other border agencies, including the Port Authority, Quarantine Office, and BSTI, must also be modernized to fully unlock the benefits of trade facilitation.
A coordinated national effort to improve international trade processes could reduce business costs, minimise delays, and ultimately boost Bangladesh’s global standing. Improvements in these areas could make international supply chains more secure and predictable, potentially attracting more foreign investment.
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Md. Tarek Mahmud is currently working as Customs Specialist (Deputy Commissioner of Customs on lien) in USAID-Feed the Future Bangladesh Trade Facilitation Activity.