February 17, 2017 - 10:57am
Bangladesh moved nine notches up in the Index of Economic Freedom this year despite concerns about the rule of law and property rights.
The 2017 Index of Economic Freedom report was published by Heritage Foundation on Thursday.
The country scored 55 points and ranked 128th among 186 countries in terms of economic freedom, up 1.7 points compared to the last year’s ranking.
In 2016 Bangladesh ranked 137th among 178 economies with 53.3 points. Among other South Asian countries, Nepal ranked 125th, Sri Lanka 112th, Bhutan 107th, India 143rd, Pakistan 141st and the Maldives 157th.
Globally, Hong Kong tops the list scoring 89.8 points followed by Singapore, New Zealand, Switzerland and Australia.
“Bangladesh has made notable success in government spending, fiscal and tax policy, while the concerns remain regarding rule of law, freedom of doing business and openness of market. But in economic freedom status it is mostly not free,” said the report.
According to the report, the fragile rule of law continues to undermine economic development in Bangladesh.
Despite some streamlining of business regulations, entrepreneurial activity is hampered by an uncertain regulatory environment and the absence of effective institutional support for private-sector development, the report said.
The government’s inability to provide even minimal public goods further limits opportunities for business development and job growth, it said.
The report said the government’s extensive subsidising of basic food staples, fuels, fertilizers and electricity continues to hamper economic growth.
On the other hand, the costs of getting necessary permits and establishing a company have been reduced considerably.
While a well-functioning labour market has not been fully developed, but the labour productivity growth has been slightly higher than wage hikes, the report cited.
Describing the rule of law, the report stated that property laws are antiquated and property rights are enforced unevenly.
Procedures for contract enforcement and dispute settlement are inefficient. Endemic corruption and criminality, weak rule of law, limited bureaucratic transparency, and political polarisation have undermined government accountability, the report cited.
It said anti-corruption efforts are weakened by politicised enforcement and subversion of the judicial process.
Among the Asia Pacific Region Bangladesh ranked 28th scoring 60.6 points on an average in the index. The world average is 60.9 points.
“It’s a positive sign for Bangladesh. I hope it would attract investment from home and abroad as investigators are waiting with funds for the business-friendly environment,” Abdus Salam Murshedy, president of Exporters Association of Bangladesh, said.
He said although the situation has improved slightly, the people still have to “pay to get service properly.” He urged the government to make services free from any bribe.