The Centre for Policy Dialogue (CPD) organised a media briefing on “Release of the Global Competitiveness Report 2017-2018 and Bangladesh Business Environment Study 2017” at CIRDAP Auditorium, Dhaka on 27 September 2017.
Published in The Daily Star on Thursday, 28 September 2017
GLOBAL COMPETITIVENESS RANKING
Bangladesh moves up seven notches
Star Business Report
Bangladesh has been ranked the 99th most competitive economy in the world, up seven notches from last year’s ranking, on the World Economic Forum’s Global Competitiveness Report 2017-18.
This is the highest ranking for Bangladesh since the index was introduced in its current format in 2004.
“We have been talking about the potential of Bangladesh to achieve double digit ranking. And for the first time, Bangladesh has entered the club of top 100 competitive countries,” said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, while unveiling the report.
CPD, as a partner of WEF, unveiled the latest report in Bangladesh at a press briefing held at the CIRDAP auditorium.
The WEF measures competitiveness by considering 12 factors that would determine the level of productivity in a country, including institutions, infrastructure, macroeconomic environment, health, education, labour market efficiency, financial market development, technological readiness, market size and innovation.
While Bangladesh’s scores improved across all 12 pillars of competitiveness, it trailed behind all its South Asian peers — India (40), Bhutan (85), Sri Lanka (85) and Nepal (88) — save for Pakistan (115).
“The country has done better in infrastructure and institutions and this is one of the main reasons behind the improvement in overall score and rankings,” Moazzem said.
Bangladesh’s ranking and score in the institutions pillar shot up from 125 to 107 this year. While the improvement is encouraging, Bangladesh still scores low in the rankings, he said.
In fact, the report identified inadequate supply of infrastructure as the most problematic factor for doing business in Bangladesh — second only to corruption.
“Inefficient government bureaucracy is becoming a growing tension,” Moazzem said, citing that it was the third most problematic factor this year, up from last year’s fourth spot.
Little change has been discerned in financial market sophistication, technological readiness, higher education and training, and labour market efficiency, this year, he said.
Inadequately educated workforce and poor work ethic at workplaces are the other two pertinent problems.
“Surprisingly, poor work ethic has emerged as a new form of constraint. Lack of dedication, hard work and commitment among a large section of the new entrants to the young labour put constraints on businesses to grow.”
The Bangladesh chapter of the report has been prepared based on executive opinion survey among 85 companies, mostly local. The survey was carried out between February and May, according to CPD.
In the survey, businesses noted progress in infrastructure thanks to the improvement in the quality of electricity and road infrastructure. But entrepreneurs were unhappy about the seaport infrastructure.
“High congestion at Chittagong sea port caused long turnaround time, extra time for unloading and re-loading, delays in shipment and extra shipment charges,” Moazzem said.
Subsequently, he suggested development of multi-modal infrastructural facilities connected with major inland and outbound trade routes to facilitate trade.
The report also found that Bangladesh has been a laggard in technological readiness even though its position has improved.
The use of ICT as a business tool is yet to get popularity. “Rather, the perception shows some deceleration.”
“Bangladesh is still at the nascent stage in case of creating IT-enabled business environment. The way we do business, that will become obsolete in the coming days.”
Besides, the country has not made any strides in financial market development.
“Bangladesh’s financial market was once regarded as good as that of middle-income economies. But that has been degraded over the years and is now at the same level as that of the least competitive economies.”
The financial sector needs to confront the failure to control the rise of classified loans, particularly in state banks, the further weakening of banking sector governance thanks to the amendment of the Banking Company law in favour of the board, and the concentration of loans to a few large groups.
There was also deterioration in the competitive environment in the domestic market in 2016. The scope for monopoly is being created in some sectors.
“The lack of domestic competitive environment is a major area of concern for creating equal opportunity for all,” Moazzem said, citing the growing concentration of businesses and the lack of effectiveness of anti-monopoly policy.
Subsequently, he called for the implementation of the competition law.
Lack of efficient human resources and terror threats were also major concerns for businesses.
CPD Executive Director Fahmida Khatun suggested reforms to improve competiveness.
“The necessity for reform will intensify,” said Mustafizur Rahman, distinguished fellow of CPD.
“We have to increase efficiency and the ease doing business. Otherwise, we cannot go a long way,” he added.
Moazzem said Bangladesh should gradually put focus on the competitiveness requirement of an ‘efficiency driven’ economy from the existing factor-driven economy.
The report ranked a total of 137 countries and Switzerland came first, followed by the US and Singapore.
Published in Dhaka Tribune on Thursday, 28 September 2017
Global Competitiveness Index: Bangladesh in top 100 for the first time
Corruption has reduced to 15.70% compared to 16.50% last year, but it still topped as the key barrier to business in Bangladesh
Bangladesh has been ranked 99 out of 137 countries in the Global Competitiveness Index (GCI) 2017-18 by the World Economic Forum.
The World Economic Forum (WEF) has been publishing the index since 1979. Last year, Bangladesh was ranked 106. The report released worldwide on Tuesday and the Centre for Policy Dialogue (CPD), a think tank released the report on behalf of the WEF at Cirdap auditorium on Wednesday.
CPD also presented their report at the programme called “The Bangladesh Business Environment Study 2017”.
According to the GCI report, Bangladesh has had an overall improvement in competitiveness as the country scored higher in all 12 pillars, mainly in institutions and infrastructure.
Switzerland continued to reign in the first position, followed by the United States, Singapore, Netherlands and Germany.
Bangladesh’s overall score was 3.9 (in a scale of 7), up from 3.8 last year, said CPD Research Director Khondaker Golam Moazzem while presenting the key findings of the competitiveness report.
Bangladesh’s performance in health and primary education, and higher education and training categories were not as impressive at 102nd and 117th respectively.
In terms of market size, the country ranked 38th but stood at 111th in infrastructure, and 118th in labour market efficiency categories. It ranked 114th in innovation category and 120th under technological readiness category.
The Bangladesh Business Environment Study said corruption has reduced to 15.70% compared to 16.50% last year, but it still topped as the key barrier to business in Bangladesh. Inadequate infrastructure and inefficient government bureaucracy were also said to be key impediments to a good business environment in Bangladesh.
“Corruption once again become the most problematic factor despite some improvement in perception and inadequate infrastructure continues to be a major concern.
“Surprisingly inefficient government bureaucracy and inadequate supply of an educated workforce have become more problematic to business than ever before. Moreover, a new problem: poor work ethics is alarmingly high,” said Khondaker Golam Moazzem.
Moazzem said the financial sector suffers due to poor soundness of banks, limited availability of financial products and difficulty in raising capital through the stock market.
“The country’s financial sector has stuck at a low level equilibrium trap,” Moazzem said, concluding his presentation suggesting the government gradually focus on competitiveness requirement of an ‘efficiency driven’ economy from the existing factor-driven economy.
Published in The Financial Express on Thursday, 28 September 2017
Global competitiveness rankings
Bangladesh enters club of top 100 countries
l * Climbs seven steps up * Corruption, however, still most problematic factor * Monitoring, supervision by central bank deteriorated in 2016
Bangladesh’s competitiveness ranking got elevated to a double-digit 99th amongst 137 countries surveyed, rising seven notches up from previous position.
The findings came in the latest Global Competitiveness Report (2017-18) of the World Economic Forum (WEF), released in Dhaka Wednesday.
The climb underlines that Bangladesh improved in some basic requirements — institutions and infrastructures — in 2016 compared to the previous year.
Country’s private think-tank Centre for Policy Dialogue (CPD), a local partner of the WEF, disclosed the rankings at the city’s CIRDAP auditorium Wednesday.
The WEF, popularly known as Davos Forum, has published such ranking report since 1979 on the basis of cross-country benchmarking analyses of the factors and institutions that determine long-term growth and prosperity of countries.
Presenting the paper at the press meet, Dr Khondaker Golam Moazzem, research director at the CPD, said Bangladesh entered the top 100-country club for the first time with its rank elevated from 106th to 99th.
He said the country moved up by virtue of progress made in its basic requirements like institutions and infrastructures.
Bangladesh also made progress on macroeconomic environment as well as health and primary education pillars.
He noted that especially Bangladesh’s position in institutions was one of the poorest even few years back and now it scored 107th, leading to rise in overall scores.
“Bangladesh’s ranking in the institution was 137 out of 139,” Dr Moazzem recalled.
He said the country’s overall score now improved by 2.6 per cent.
The policy analyst said: “Both rank and score on all 12 pillars have experienced improvement – an exceptional case.”
He, however, said this improvement in rankings is perhaps partly linked with the tumble of three countries which had ranked above Bangladesh last year.
He said Bangladesh is most laggard in case of technological readiness despite the fact that its position improved to 120th from 122nd in the past year.
“Bangladesh is still at the nascent stage in case of creating IT-enabled business environment,” says the CPD presentation on the ranking.
Domestic competitive environment was perceived to have deteriorated in 2016.
It noticed deterioration in case of intensity of competition, less competitive professional services, less competitive retail services and poor competitive networks.
The Centre stressed the need for ensuring competition by implementing rules and regulations, such as effective enforcement of ‘The Competition Act’.
Quoting a rapid-assessment survey conducted as part of the global survey, the CPD said local businesses were sceptical as to whether the improvement will sustain or not.
Dr Mustafizur Rahman, a distinguished fellow at the CPD, said Bangladesh also bettered its position in innovation and sophistication factors–the 11th and the 12th pillars respectively of the global index.
He listed some of the innovations, including economic zones and one-stop services, and focused on the urgency of further advances.
“If we cannot advance ourselves in the new innovations, then our raking will not sustain,” he said on a note of caution.
He also said Bangladesh now should focus on the technological indicators for further improvements in the ranking.
Bangladesh’s ranking has been enhanced by seven places in a year and this has implications over foreign trade and investment, Dr Rahman told the journalists.
“This is comparative picture and it has applications on many business and economic fronts,” he added.
However, Bangladesh is one of the weakest performers in South Asia as its position is up by 16 notches from that of Pakistan, the poorest performer in the region.
Pakistan ranked 115 in the 2016 rankings.
But all other South Asian economies, excepting Pakistan, are above Bangladesh.
India, although slipped one notch, ranked 40th, Nepal 88th, Sri Lanka slipped by 7 places to 85th, and Bhutan 82th from 97th.
Switzerland retained its number-one position in the last ranking due to its extremely strong fundamentals including public health, primary education and solid macroeconomic environment.
The United States, which was third, now rose to number-two rung in global rankings.
Singapore stands third. Actually Singapore and the USA interchanged their positions in 2016.
The Netherlands ranked fourth and such all top-10 economies retained their rankings.
The report, an annual assessment of the factors driving productivity and prosperity in 137 countries, singles out corruption as the most problematic factor for doing business in the country, followed by inadequate supply of infrastructure, inefficient government bureaucracy, and inadequate educated workforce.
The rankings covering 137 economies measure national competiveness – defined as the set of institutions, policies and factors that determine the level of productivity.
However, the rapid-assessment survey conducted by the CPD alongside the global survey on the business executives opined that the monitoring and supervision by the central bank deteriorated in 2016.
It says: “51 per cent of the respondents mentioned that the monitoring and supervision of the central bank deteriorated in 2016.”
And 29 per cent respondents perceived that capital market is still influenced by illegal activities.
Another 45 per cent are not satisfied with the pace of work on the fast-track projects.
Of the respondents, 58 per cent were sceptical about the special economic zones’ ability to meet the need of the investors, says the rapid-assessment survey called Bangladesh Business Environment Study 2017.