Bangladesh slipped two notches in the global competitiveness ranking by the World Economic Forum to rank 105th, out of 141 countries, in 2019 due mainly to significant deterioration in most of the drivers including governance, infrastructure and macroeconomic stability of competitiveness.
In 2018, Bangladesh was ranked 103th out of 140 countries.
‘Institution and governance are the weakest areas in the business competitiveness where majority of indicators under the 12 drivers of productivity perceived to be deteriorated and incidences of bribes for awarding public contracts, tax payments and illegal diversion of public fund increased,’ according to the Global Competitiveness Report 2019 released on Wednesday.
Judicial independence and freedom of the press also deteriorated in the year, the report said.
The Centre for Policy Dialogue, local partner of the WEF, released the Bangladesh part of the report at a press conference held at the Economic Reporters’ Forum auditorium in Dhaka on the day.
Bangladesh’s performance declined in 10 drivers, termed as pillars, out of 12 pillars of competitiveness, CPD research director Khondaker Golam Moazzem said while presenting the key findings of the report.
In the ranking of the Global Competitiveness Index (GCI), the country’s position dropped by seven notches in macroeconomic stability, by six steps each in ICT adoption and labour market, by five notches in infrastructure, by three steps each in financial system and innovation, and by one position each in institution, skills and business dynamism of the pillars, he said.
The country’s ranking improved only in product market by four notches and in health pillar by three steps.
The country’s overall score in the index, however, remained unchanged at 52.1 points.
Moazzem said that though the overall score remained unchanged but the ranking declined as other countries were advancing at faster pace.
Bangladesh was ranked 109th in institution, 114th in infrastructure, 108th in ICT adoption, 95th in macroeconomic stability, 93th in health, 117th in skills, 119th in product market, 121th in labour market, 106th in financial system, 36th in market size, 121th in business dynamism and 105th in innovation in the ranking.
The financial sector is continuing to struggle with its poor performance as all indicators are in negative terrain, he said.
He said that this year’s report highly emphasised the preparedness for the fourth industrial revolution.
Moazzem said that ICT adoption and ICT-based skills would be most important issues in the coming years for the country for sustaining economic growth.
Abundant and cheap labour without the ICT skills may become a burden, he said.
For the ranking, 70 per cent weight came from specialised secondary data and the remaining 30 per cent weight took from the data derived from executive opinion survey.
A total of 77 entrepreneurs participated in the survey for the period from January to December in 2018.
According to the report, bribery was one of the weakest areas as 78 per cent of the respondents reported bribery in awarding public contracts, 76 per cent in export-export and 74 per cent of entrepreneurs reported bribery in tax payments.
Another 77 per cent said ethical standards of politicians were also the weakest area.
‘Corruption has become a major burden for businesses, which reduce competitiveness both in local and global markets,’ the report said.
Extend of corruption further increased in 2018, which squeezed scope for doing business by increasing cost of business particularly for new entrepreneurs and small and medium enterprises, it added.
Rise in organised crimes and violence also caused higher business cost in the year.
Entrepreneurs’ perception somewhat improved in a number of indicators including the government’s response to effective changes in public policies, ensuring stable policy environment and long-term vision for the country.
Businesses’ perception of infrastructure also improved in the year but the level of improvement was still inadequate to ensure accepted level of quality and efficiency of services, according to the report.
Use of robotics, digital tools, app- and web-enabled markets and artificial intelligence in business will become important in future from 4IR (fourth industrial revolution) point of view where the country is not ready both in terms of using those technology and setting the legal framework.
Regarding the financial system, 59 per cent of the respondents expressed their dissatisfaction about weak soundness of banks while 49 per cent said financial auditing and reporting standards were still in weak state.
The CPD also released the Bangladesh Business Environment 2019, a rapid assessment survey carried out by the CPD on current issues of Bangladesh economy, at the briefing.
CPD executive director Fahmida Khatun said that Bangladesh should carry out necessary reforms in institutions, take steps to enhance both human and ICT skills and prevent corruption for sustaining economic growth.
CPD senior research fellow Towfiqul Islam Khan also spoke at the briefing.
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