Executive Summary
Bangladesh has a vibrant Small and Medium Enterprise (SME) sector which can be divided into 33 subsectors of products and services. However, compared to India and Pakistan, these SMEs represent a smaller percentage of total enterprises.
Available data shows that SMEs constitute 50.91 percent of the micro-economic sector and employ 35.41 percent of workers. The SME sector’s contribution to GDP was 48.41 percent and 47.63 percent of total value added.
SMEs face multiple challenges, including credit crunch, cumbersome bureaucratic processes, and widespread corruption in the economic sector. In addition, the absence of effective government policies geared towards SMEs has hindered their growth.
Despite pervasive corruption, national and regional trade bodies representing businesses and industries have not demonstrated concerted efforts and plans to combat corruption.
Business leaders, entrepreneurs, and experts in the SME sector acknowledge the deleterious impacts of corruption on the growth of the SMEs, and view bureaucratic roadblocks, the absence of accountability within the government, and the relative impunity enjoyed by perpetrators as conducive factors. Existing laws, institutional mechanisms, and reporting systems regarding corruption are viewed as inadequate for curbing corruption.
Recommendations
| To the Government | ||
|---|---|---|
| | Develop a robust SME policy with proper support mechanisms and incentives for SMEs and ensure | ||
| proper implementation of these policies in consultation with the SME entrepreneurs. | ||
| | Unequivocally condemn all forms of corruption, express unwavering commitment to curb corrup- | ||
| tion, and adhere to promises made to address the problem without delay. | ||
| | Address the culture of impunity enjoyed by the perpetrators of corruption due to political connec- | ||
| tions and initiate lawful punitive measures against the perpetrators irrespective of their political and | ||
| social stature. | ||
| | Reform the existing laws and reporting mechanisms, implement the Public‐interest Information | ||
| Disclosure Act (Provide Protection), 2011 (popularly referred as the Whistle-blower Protection Act), | ||
| provide unhindered autonomy to the Anti-Corruption Commission (ACC) and establish accountabil- | ||
| ity and transparency within the public sector. | ||
| | Design and implement effective programs to rehabilitate those affected by the COVID-19 | ||
| pandemic. The programs should aim to create employment opportunities and provide financial | ||
| assistance through the social safety net programs, particularly for lower-income families. | ||
| To the Trade Bodies | ||
| | Develop specific plans and programs to address the concerns of the SME sector and mechanisms | ||
| to create a supportive environment. | ||
| | Develop plans to address the issues related to governance, corruption, and inclusive policymaking. | ||
| | Create a transparent mechanism for reporting and actions against corruption. | ||
| | Develop and implement a strict code of ethics in various sectors, including the SME sector, and | ||
| incentivize adherence to this code. Develop a robust SME policy with proper support mechanisms | ||
| and incentives for SMEs and ensure proper implementation of these policies in consultation with | ||
| the SME entrepreneurs. | ||
| To the SME sector | ||
| | Develop an independent platform and network to highlight the issues the sector faces and address | ||
| corruption both inside and outside the sector. | ||
| | Develop internal governance mechanisms and develop best practices to share with entrepreneurs | ||
| within the sector. | ||
| | Adopt accountability mechanisms within each enterprise and create awareness among clients to | ||
| make use of these mechanisms. Design and implement campaigns about the existing laws and | ||
| regulations, and mechanisms of reporting complaints about corruption in public and private sectors. |