Bangladesh slipped two notches on the World Economic Forum’s Global Competitiveness Index
Corruption, poor infrastructure and weak institutions are hindering the business environment in Bangladesh.
According to a report titled "Bangladesh Businesses Environment Study 2019,'' published by the Centre for Policy Dialogue (CPD) on Wednesday, corruption has become a major burden for businesses, which reduces competitiveness both in local and global markets.
Institutions and governance are the weakest areas in the business competiveness of Bangladesh, the report mentioned, adding that around 78 percent of businessmen termed bribes as the deciding factor in awarding of public contracts.
About 76 percent of investors surveyed by CPD said they had to pay bribes for export and import, while 74 percent said they were asked to pay bribes during tax payment.
The CPD also mentioned that 64 percent of the surveyed investors expressed concern about the illegal diversion of public funds, while 66 percent assumed that the judicial system is not independent or free from influence and bribery.
The report also mentioned that fast-tracked infrastructure projects could not maintain their timeline and have been depriving the private sector of essential services.
Survey respondents also perceived the quality of railroad and related services to be the weakest. 56 percent of the entrepreneurs mentioned that quality of road infrastructure is "somewhat poor."
Bangladesh slips down two notches on Global Competitiveness Index
Bangladesh slipped down two notches on the Global Competitiveness Index this year, ranking 105th among 141 countries.
According to the Global Competitiveness Report 2019 by the World Economic Forum (WEF), Bangladesh scored 52.1 out of 100. In 2018, the country had ranked 103rd among 140 countries.
Bangladesh slipped in five sections – institutions, infrastructure, ICT adaptation, product market, and business dynamism, according to the report.
While presenting the report on behalf of WEF, Dr Khondaker Golam Moazzem, research director of CPD said, "Despite some improvements, Bangladesh is lagging in comparison to the fast improvement in other competent countries."
Dr Fahmida Khatun, executive director of CPD, said that although Bangladesh has had high GDP growth for several years, the quality of growth has been falling.
"To meet the requirements of the fourth industrial revolution, the government should focus on improving the skills of human resources," she said.
"To resolve these issues, the government should introduce multidimensional initiatives like institutional and administrative reforms, adoption of technology, increasing human capital by increasing skill of the labour force and ensuring transparency in government agencies," CPD recommended.
CPD also suggested allocating six percent of the gross domestic product (GDP) for education and technology during the eighth five-year plan (2020-2025), as per recommendation by Unicef.
On the positive side, the WEF report found that Bangladesh improved in macro-economic stability, health, skills, labour market, financial system, market size, and innovation capability.
The report stated that Bangladesh had ranked the best in terms of market size – securing 36th position – while it ranked worst in business dynamism and labour market – placing 121st on both indicators.
Among the countries in South Asia, Sri Lanka improved the most, securing the second position in the region and ranking 84th globally. Both Nepal and Pakistan ranked below Bangladesh, coming in at 108th and 110th, respectively.
With a relatively stable score, India leads South Asia ranking by being 68th on the index. However, the South Asian giant also fell 10 notches this year, as other faster improving economies that had previously ranked lower, outshone it.
Singapore got ranked as the most competitive economy in the world, scoring 84.8 points, followed by the United States with 83.7 points, Hong Kong with 83.1 points, and the Netherlands with 82.4 points.
The average score of all 141 nations stood at 61, which the WEF considers to be of great concern in the face of the global economic slowdown.
"The changing geopolitical context and rising trade tensions are fuelling uncertainty and could precipitate a slowdown," the World Economic Forum said in a press release.
"However, some of this year's better performers appear to be benefiting from the trade feud through trade diversion."