Progress made but still a long way to go

There is no reason why Bangladesh cannot achieve a higher growth rate than its current one. The country is still in the low-income group, and is aspiring to enter the low end of middle-income group by 2021.
Bangladesh's economic competitiveness is improving, as the country's ranking in the Global Competitiveness Index (GCI) jumped one notch higher this year due to soundness in macroeconomic environment and moderate progress in terms of market size, goods market efficiency, financial market development, health and primary education sectors.
It is natural that we have taken umbrage at the World Bank's Doing Business concept as some of the numbers reported are incorrect. But one needs to keep an open mind when such numbers are put up and look at ways of improving the 'parameters' on which we did not score well.
Bangladesh's ranking in the GCI stood at 109th out of 144 economies this year as against 110th among 148 economies last year, shows the Global Competitiveness Report 2014-15 released by the Geneva-based World Economic Forum (WEF). The country's ranking improved marginally to 3.72 out of seven, compared with 3.71 last year.

 With this score, the country secured fifth position in the competitiveness index among South Asian countries. India topped the list in the region with a score of 4.21 and global ranking of 71st, followed by Sri Lanka which obtained a score of 4.19 and secured a global ranking of 73rd.
Nepal, Bhutan and Pakistan scored 3.81, 3.80 and 3.42, respectively. Two South Asian countries - Afghanistan and the Maldives - were not covered by the WEF survey.

The competitiveness gap between South Asian and Southeast Asian countries runs deeper than before, the report revealed. The five largest Southeast Asian economies (ASEAN-5) all feature in the top half of the rankings.
China, which has improved its position by one place to 28th spot, leads the BRICS grouping, among which India has the least ranking. Russia is ranked at 53rd position, followed by South Africa (56) and Brazil (57).
India's decline of 11 places to 71st, set against the gains of the five ASEAN countries, suggests that the competitiveness divide between South and Southeast Asia is becoming more pronounced. Besides India, the WEF said that some of the world's largest emerging market economies continue to face difficulties in improving competitiveness. These include Saudi Arabia, Turkey, Mexico, Nigeria, South Africa and Brazil; all of them have slipped in their rankings.

 COUNTRY`S COMPETITIVENESS: Bangladesh erased its negative branding of Kissinger's bottomless basket case in the 2000s. The economy attained an average growth rate of 6.3 per cent in 2010 from a mere 3.7 per cent in the 1980s.
Meanwhile, the economic system has been transformed into market capitalism. It is also endowed with some capitalistic brands like its position in the Goldman-Sachs's Next Eleven emerging economies and in the Coface's new ten emerging countries.
Moreover, we are praised for our progresses in some global indices and rankings. The indices compare the social and economic environments of different countries in the world. Some of them are progressive-better that indicate better position against higher scores, whereas the regressive-better indices explain reversely.
Bangladesh, like other 47 least developed countries (LDCs), suffers from a vicious cycle of capital formation, low level of human capital, technological deficiency and macroeconomic instability.
The country could do much better if it could effectively implement structural reforms, develop, attract and retain talents, constantly introduce new higher value-added products and services, and focus more on public-private partnership to execute development works. During the last four consecutive years, Bangladesh's position in the global competitiveness table has hovered between 108 and 118 and its score remained virtually unchanged. The variations in its positions had been mainly due to increase and decrease in the number of countries included for assessment by the WEF.

Over 815 people were killed in 242 climate change events during 1993-2012 when the country faced a loss of over US$1.8 billion which is equivalent to a loss of 1.16 per cent of the GDP (gross domestic product). Bangladesh is followed by Vietnam and the Philippines in the index, developed by think-tank Germanwatch.
Even though Bangladesh had been ranked as the fifth risky country in adverse climate change impacts during 1993-2012 period, it was not on the top 10 list as of last year, a new study says.  In the previous year's index for the 20-year period, Bangladesh ranked fourth.
The CRI is a progressive, better index, the score of which was reported at 16.01 in 2006 and 19.67 in 2013 indicating a risk diminution that was mainly for high adaptation.
On the other hand, our rank was 11 in the Happy Planet Index (HPI) 2012. The HPI is also a progressive, better index by the New Economic Foundation. It calculates happy life years from life expectancy adjusted to well-being and ecological footprint.
Interestingly, a vulnerable country with 6.0 per cent per capita consumption of a developed one, only PPP $1,830 per capita at 2012 international US$, offers more long and happy life.
As per the Global Peace Index (GPI), a regressive-better index at a range of 10-0 that is made of 22 indicators on domestic and external conflicts, social safety and security, and militarisation. Our peace level improved for a fall in GPI score from 2.118 to 2.106 during 2008-2013. However, it deteriorated by 0.8 per cent in South Asia and 12 per cent in the world over the same period.
Moreover, the World Happiness Index (WHI) has shown a happiness loss in all South Asian countries except Bangladesh. The UN Sustainable Development Solutions Network prepares the WHI, a progressive, better index at a range of 0-10, taking GDP per capita, social support, healthy life expectancy, life choice freedom, generosity and corruption perception into account. We gained happiness for a rise in WHI to 4.804 during 2010-12 from 4.473 during 2005-07. Gains in peace and happiness are our wealth but how long could a LDC retain it in the wave of globalisation?
Meanwhile, our economy has stepped out of the LDCs' average in reducing some basic deficiencies. We moved out of 'extreme alarming' and 'alarming' levels of hunger. The Global Hunger Index (GHI) 2013 ranked us as the 58th least hunger-affected country in the world. Our progress is very satisfactory in poverty alleviation, primary education, child healthcare, maternal health and basic sanitation.
Meanwhile, we have received a few awards from the United Nations and other international agencies. All this has created a base for human
development.
According to the Human Development Index (HDI) 2013, our score is higher than the LDCs' average. The United Nations Development Programme prepares this HDI as a progressive, better index at a range of 0-1 taking life expectancy, literacy rate and per capita income into account. Our HDI score increased from 0.494 to 0.558 during 2005-2013 that offered us a status of medium human developed countries with 142nd position in the world.
Based on potential young human resources, the JP Morgan placed us in the Frontier Five. However, we are still far to make our human resources into human capital.
SERIOUS IMPEDIMENTS TO GROWTH: Inadequate infrastructure, corruption and inefficient bureaucracy, among other issues, are identified as most problematic factors for doing business in Bangladesh, according to a report on global competitiveness.
Bangladesh has made positive changes in seven areas including infrastructure, macroeconomic stability, higher education, goods market efficiency, financial market sophistication, market size and innovation, the report said.
Major deterioration was noticed in institutions, health and primary education, labour market efficiency and technological readiness, among others.
The most problematic factors for doing business are inadequate infrastructure, corruption, inefficient government bureaucracy, government instability, access to financing, policy instability, inadequately educated workforce, crime and theft, tax regulations, inflation, foreign currency regulations, tax rates, poor work ethics in national labour force, insufficient capacity to innovate, poor public health and restrictive labour regulations, it said.

 In the last six years, infrastructure has fallen in the 'worst' category due to limited road transport, even though electricity supply has improved
significantly.
Look at the four-lane Dhaka-Chittagong highway which has been a dream far too long. It is felt infrastructure uplift should be focused towards development of supply chain.
A significant deterioration has been marked in key indicators centred around government and public institutions during the last two years. The government's efforts to combat corruption and bribery have been largely
ineffective.
While noting improved macro-economic management and a leap in financial market development, business-government relationship has fallen short of creating an adequately enabling business environment. The economists have rightly given a call for access to public utilities and to credit at an affordable rate of interest.
While we offer opportunities for investment we must underpin it through raising our competitiveness levels.
Bangladesh's business competitiveness has been stuck at 'lower-bound' level over the last several years and could not break to enter upper level, while preparedness for meeting complex and diverse needs of businesses while the country heading towards a middle-income country is by and large absent.
It is like moving up and down a slippery slope. One year we go up by a notch or two, another year we slide down. In the main, it remains an uphill task to better our previous standing in terms of global competitiveness. All this is because in the vital areas we are largely stuck up.
It is difficult to know how seriously Bangladesh's policymakers are taking the GCI which assesses the competitiveness landscape of a large number of countries providing insight into the drivers of their productivity and prosperity. The latest global competitiveness index published by the WEF is the 35th one of its kind and it has laid emphasis on innovation and skills as the key drivers of economic growth.
Bangladesh, according to the assessment made by the GCR, has made some improvement in areas of infrastructure, macroeconomic stability, higher education and training, efficiency level in commodity market, sensitivity of the financial market and innovativeness during the period under review. But its performance in some areas, including health and primary education, labour market efficiency and financial market sensitiveness, has showed signs of deterioration.
The top factors are considered to be the most important problematic ones for doing businesses for over a long period. There is a lack of adequate efforts to reduce the extent of adversities caused by these factors, which have topped the list since 2006.  
However, entrepreneurs foresee better economic prospects. "This would have positive implications in overall businesses."
The writer is Inspector of Colleges, Bangladesh
University of Professionals (BUP).
 [email protected]