Bangladesh two notches up

Bangladesh has moved two notches up in this year's Global Competitiveness Index, riding on progress in the areas of macroeconomy, health, education and infrastructure.

The country was ranked 107th in 2015-16, from last year's 109th, among 140 countries, according to the World Economic Forum's (WEF) annual report on global competitiveness.

The Centre for Policy Dialogue (CPD) disclosed the ranking on behalf of the Geneva-based body in a press conference at Dhaka's Brac Inn yesterday.

Bangladesh's progress is primarily because of better performance in macroeconomic environment, health, education and infrastructure, said KG Moazzem, additional research director at the CPD.

The country scored 3.8 on a scale of 1 to 7, he said. Last year, the score was 3.7.

“This is not the kind of jump we expect,” said Mustafizur Rahman, executive director of CPD, while speaking from Switzerland through video-conferencing.

“We are walking whereas we need to run.”

The economist said Bangladesh could not make major breakthrough in the ranking because of lack of desired reforms in financial, capital and labour markets.

“There are serious shortcomings in the areas of good governance and rules of law which are keys to boosting competitiveness. Besides, Bangladesh will have to give more importance to innovation in order to become a middle income country.”

Prof Mustafiz said the government has taken many steps to enhance the efficiency of the institutions. “But it is not enough. We have to allow the Anti-Corruption Commission to work independently.”

“The government has given financial incentives for the public administration. At the same time, reforms in the administration have to be sped up. Many infrastructure projects have been taken up. We have to ensure that they are implemented timely.”

KG Moazzem said many countries have leapfrogged in the ranking whereas Bangladesh has moved up a bit.

For example, India moved up to 55th place from last year's 71, whereas Sri Lanka was ranked 68th in 2015-16 from last year's 73rd.

Both Nepal and Bhutan were ahead of Bangladesh as they were ranked at 100th and 105th respectively.

Only one country in South Asia was ranked below Bangladesh: Pakistan was ranked at 126th, while the Maldives was not included in the ranking.

Bangladesh's macroeconomic stability has improved to 49th from 72nd while improvement in infrastructure saw ranking moved up to 123 from 127 last year.

 The WEF said Bangladesh's weakness includes institutions, financial market sophistication and goods market efficiency.

 Negative changes occurred in the areas of health and primary education, technological readiness and business sophistication, said Moazzem.

 “Governance and institutions are still in weak state and are cause for growing concern for businesses in medium to long term,” he said during his presentation.

 Switzerland and Singapore held onto the two top places in the rankings and the US stayed in third place.

On the basis of the questionnaire developed by the WEF, an executive opinion survey was conducted in Bangladesh between February and May this year while reference period was January to December of 2014.

 The sample size was 56, with most of the companies locally-owned and mostly based in Dhaka. The CPD had sent the questionnaire to about 300 companies.

The WEF assesses the world's economies in 114 indicators in 12 pillars: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

 The report issued a warning about the health of the global economy, saying “a 'new normal' of suppressed economic and productivity growth and persistently high unemployment is damaging resilience and leaving the world vulnerable to another protracted slump”.

 It called on countries to “step up their efforts to re-accelerate economic growth”.

The WEF report was simultaneously launched in 140 countries. The CPD has been partnering with the WEF in preparing the report since 2001.