The position of Bangladesh in the Global Competitiveness Index (GCI) measured this year has improved to some extent from last year, contributed by macroeconomic stability, infrastructural development and market efficiency. But, it is still behind the position secured in the year before.
In 2013, the country ranked 110th out of 148 countries as it improved from 118th position in 2012.
Though the country has shown upward movement, it only recovered to some extent the earlier position from 108th in 2011, said Centre for Policy Dialogue (CPD), releasing the GCI 2013-14 at a press conference in Dhaka Monday.
At the same time, Bangladesh’s progress has been slowed down particularly because of further weakening of financial market and to some extent, business sophistication measure including industrial relation, said the report.
Corruption has returned back as the lead constraining factor along with inefficient government bureaucracy, which indicated Bangladesh is still struggling with structural and governance weakness pulling down the economy from attaining higher level of competitiveness, it added.
CPD senior research fellow Khondaker Golam Moazzem in his keynote presentation said corruption has jumped to the top position as major problematic factor after five years, which is a great threat for doing business. He also said lack of experience in government administration and political unrest is another thereat.
He said banks are sitting with healthy balance sheet but they are more cautious to provide funds due to scandal like Hallmark. Commenting on the slow growth in business competitiveness, CPD executive director Mustafizur Rahman said: “We are walking while others are running to attain the desired growth.” The government should put highest effort on reducing corruption, improvement of infrastructure and removing inefficiency from the bureaucracy, he added.
According to the report, political instability has emerged as a growing concern from the perspective of business competitiveness.
Switzerland topped for the fifth consecutive year, followed by Singapore in the second position and Finland in the third due to their notable performance in the innovation and labour market efficiency as well as the sophistication of business sector.
CPD interviewed, on behalf of the World Economic Forum (WEF), 71 leading businessmen of Bangladesh as sample who has business capital of Tk100m, identifying the major difficulties in the business environment that they are facing including corruption, weakness of public institutions and lack of access to finance.
About 92% businessmen think it is difficult for the entrepreneurs with innovative but risky projects to find venture capital, while 78% opined that it is difficult to obtain bank loan with only a good business plan and no collateral.
The level of efficiency of customs procedures is moderately inefficient in the country for the foreign direct investment, said 57% respondent of the survey.The survey identified some problematic factors for business in the country as corruption, inadequate supply of infrastructure, inefficient government bureaucracy, access to financing and political instability, inadequately educated work force, foreign currency regulations, poor ethic in national labour force, policy instability, complexity of tax regulation, insufficient capacity to innovate and inflation.
Entrepreneurs have foreseen an economic slowdown in 2013 due to various problems in domestic and external markets as political unrest ahead of national election and increase in cost of doing business due to crime and violence, the survey stated.