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The country’s business competitiveness has declined further in a global rating in the last one year, reflecting eroding confidence of the corporate sector due to rising corruption, inefficient bureaucracy, poor infrastructure and organised crime.

Bangladesh has been placed 86th among 95 countries in the annual Business Competitiveness Index (BCI). The countries below are Mozambique, Nicaragua, Honduras, Ethiopia, Paraguay, Bolivia, Chad, Haiti and Angola –– mostly strife-torn countries.
The Growth Competitiveness Index (GCI) affords Bangladesh an even worse status — 98th out of 102 countries — only above Mali, Angola, Chad and Haiti.

Last year, according to the GCI components, the country’s macro-economic environment index ranked bettered at the 72nd position.
“This indicates that the competitiveness of Bangladesh in terms of growth and business are among the poorest in the world,” revealed the Global Competitive Report-2003-2004, launched Thursday globally and also in Dhaka.

The World Economic Forum (WEF) prepared the report on the basis of surveys conducted among 7,741 companies worldwide.

Eighty-one Bangladeshi “movers and shakers” of the corporate sector participated in a survey styled Competitiveness Environment in Bangladesh-2003 locally conducted by the Centre for Policy Dialogue (CPD), one of the partner organisations of the WEF.

Against this backdrop of a decline in economic atmosphere, almost two-thirds of the executives, with varying certainty,
expressed their perception that the country’s economy might experience a recessionary trend in 2004.

“It is very unfortunate that we could not realise the opportunities despite immense potentials Bangladesh has as a nation and as a promising economy,” said Dr. Debapriya Bhattacharya, executive director of CPD, while launching the report.

The respondents reckoned the government sector’s competence to be “very poor” and they stated, in receding order, corruption, inefficient bureaucracy and inadequate infrastructure as the three most problematic factors in doing business in Bangladesh.
An overwhelming majority of them (65 per cent) felt that the frequency of additional payments or bribes has increased significantly in recent times.
Next to the three to come in the delineating problem areas are crime and theft, policy instability and access to financing.

However, the report has mentioned certain improvements in the availability of bank loans. Forty-two per cent of the companies observed that access to bank credit has become easier although one-third of the respondents still found it difficult during the past year.

The 81 Bangladeshi companies gave their opinions about the business competitiveness after 200 companies were approached. All the respondent companies are based in Dhaka excepting two –– one in Gazipur and the other in Khulna –– and each of them has at least Tk 10 crore in assets.

About 75 per cent of the respondents said that organised crimes impose significant costs on their businesses. “This high percentage indicates that reliance on legal framework and reliability on police service in the context of protection of business is marginal in the country,” the report pointed out.

A growing number of people in the corporate sector (from 48 per cent in 2002 to 68 per cent in 2003) believe that “the judiciary is not independent of the political influences of members of the government, citizens or firms”.

Also, over 96.3 per cent business bosses have no trust in the honesty of the politicians, showing an increasing erosion of public trust in those who govern and are likely to govern any time. It (no confidence on politicians) was 95.6 per cent in 2002 and 91.1 per cent in 2001.

About the role of the multilateral lending agencies in socio-economic activities, the private sector people with large majority “either had very low opinion or unaware of the effectiveness” of the institutions.
Among four international financial institutions, the Asian Development Bank (ADB) is perceived to be effective by 44 per cent respondents, followed by the International Monetary Fund (IMF) by 42 per cent and the World Bank and its affiliate IFC by 36 per cent.

At the same time, 90 per cent of the companies admitted that the managements had a tendency to centralise power and authority vested upon themselves whereas another majority (about 54 per cent) said that relatives often hold senior management positions.
Eleven company executives refrained from answering the question about size of unofficial business and over 51 per cent of the 70 said unofficial businesses ranged between 21 to 50 per cent.

“A decline in cooperative relationship between labour-employer was observed (from 42.3% in 2002 to 37.0% in 2003),” according to the report. The companies also do not invest on human resources development.