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Although business competitiveness slipped further last year on the back of corruption, inefficient bureaucracy and crime, the corporate sector showed strong resilience posting gains in production, exports and employment.

This was revealed in a survey by the Centre for Policy Dialogue (CPD) on 100 top companies to assess business environment in Bangladesh as part of its contribution to the Global Competitiveness Report (GCR) 2004-05 to be published by the World Economic Forum.

"Despite the deterioration, the corporate sector performed well and carried out adjustment with global changes," releasing the survey findings yesterday, CPD Executive Director Dr Debapriya Bhattacharya said. He added that investment, employment, production and export performance of the companies under survey was better in the first three quarters of the FY04 in comparison to FY03.

Around 55 percent of enterprises expanded their businesses in 2004 as against 49.6 percent in 2003 and 20 percent companies made investments in new businesses in 2004.

Eighty percent of the respondent companies believe that parliament is highly ineffective as a law-making institution while 78.6 percent companies believe that judiciary is not free from political influence, the survey revealed.

The survey suggested a decline in faith on effectiveness of parliament as well as judiciary in 2004.

Almost all (98 percent) top executives believe that public trust in financial honesty of politicians is low and this belief has become stronger in 2004. Police services cannot be relied upon for protection of businesses from the criminals.

As high as 91 percent of the respondents was critical about government officials' favouritism for well-connected firms and individuals while deciding on policies and contracts and this criticism intensified in 2004, Dr Debapriya mentioned.

He said about 54 percent of the companies was of the view that donation to political parties has a direct influence on specific policy outcomes. "The legal framework for private businesses is inadequate and subject to manipulation," he maintained.

About 36 percent of the companies acknowledged that during FY03 reduction of interest rates benefited them by reducing production costs and almost half the companies said the rising trend of inflation is affecting their production cost.

Low quality of education is a major stumbling block in producing efficient human resources and the failure of the education system to produce graduates for meeting the need of the companies is worrisome, the survey added.

The survey further said the domestic market is becoming more dominated by large market players. There is a positive trend in the availability of backward linkage support from local sources, and such capacities are improving significantly in 2004.

Dr Debapriya said non-resident Bangladeshis are investing more in the country, 32.79 percent of which is coming to the real estate and housing sector, 19.67 percent to readymade garment and textile sector and 9.84 percent to hotels and restaurants.

"While some NRBs are investing here, the recognition of the fact that the Bangladeshis are also finding investment opportunities abroad came as a surprise during last year's survey," the survey said.

"Such a trend may have two alternative interpretations. One, due to negative investment climate within the country, Bangladeshis are moving abroad with their capital. Two, the domestic businesses are now mature enough to go abroad with investment and face international competition," Debapriya said.