Business environment deteriorating

Bangladesh recorded a steep fall of 10 points to 118 out of 144 countries in the Global Competitiveness Index 2012-13. The respected annual publication brought out by the World Economic Forum is based on a survey of 14,000 industrialists and business leaders that included 87 medium and large companies in the country. Indicators that helped plunge Bangladesh's ranking include the sorry state of infrastructure, inadequate access to finance and widespread corruption.
The results were not altogether surprising given that the financial meltdown the capital market suffered at the end of 2010 from which the country is yet to recover. The rising cost of doing business where "speed money", i.e. bribes having become a regular feature of securing new contracts coupled with the growing perception within the business community that the State is failing to maintain proper regulatory control in the banking sector -- all helped to tip the scales against Bangladesh's favour in the global index. Nagging problems with the country's power generation helped further erode confidence, particularly in the backdrop of significant financial commitments to the sector and the upward spiral in power tariff has made production more expensive and raised concerns of weak macroeconomic management.
The fact that there have been little in way of improvement be it the sorry state of road communication, ensuring proper gas supply to industry or institutionalising proper regulatory monitoring of the country's bourses, all point to a deteriorating state of governance in the country. The State's lack of capacity to handle not one but four major areas, i.e. poor infrastructure, corruption, lack of access to finance and to a lesser degree, impending political instability due to politics of confrontation, do not bode well for improving the investment climate in Bangladesh. With multiple banking scams that have rocked the nation in 2012 and corruption charges levelled against high level public officials on the alleged Padma Bridge graft, the half-hearted attempts to plug the loopholes in the system, let alone bring those guilty to book, are tantamount to sending the wrong signal to potential global investors that Bangladesh is a country worth doing business in.