Economic Freedom
Bangladesh makes little headway

Bangladesh is the 130th freest country for doing business, according to the Index of Economic Freedom released yesterday. Even though Bangladesh improved its score this year, its ranking remains the same as last year's.

For over a decade, The Wall Street Journal and The Heritage Foundation, Washington's premier think-tank, have been publishing the index by tracking the march of economic freedom in 184 countries. The Index covers 10 freedoms--from property rights to entrepreneurship, monetary, labour and trade. This year, Hong Kong's economic freedom score is 89.9, making its economy the freest.

Of the South Asian nations, Sri Lanka is the freest economy (97th) with a score of 58.3 followed by Bhutan with 56.6, Pakistan 54.7, India 54.6 and Bangladesh 53.2. All other South Asian countries are behind Bangladesh, according to the 2012 index report.

This year Bangladesh's score was up by 0.2 point from last year due to improvements made in business and labour freedom. Bangladesh was ranked 137th in the 2010 index report.

However, trade freedom dropped significantly, this year's report said.

It said recent reforms improved regulatory efficiency in the country and business start-up has become simpler. Business start-up time takes 19 fewer days now. The cost of getting necessary permits and establishing a company have been reduced considerably, the report mentioned.

The economic freedom report said although a well-functioning labour market has not been fully developed, the growth of labour productivity is slightly higher than wage hikes. Inflationary pressure is high, and price control measures are in place. The advancement in freedom is accompanied by notable economic growth.

“Nonetheless, progress in overall reform has been uneven and deficient. The foundations of economic freedom remain fragile,” it said.

The report said, “Corruption and an inefficient judicial system undermine the rule of law. Weak governance and structural problems continue to constrain development.”

The index report also said inefficient regulatory regime is often heavily politicised, and policies needed to liberalise or sustain open markets are undercut by considerable government interference in the economy.

The underdeveloped financial sector impedes investment and the growth of a more dynamic private sector, it said.

The report, however, hailed the present government for handling Islamist extremist groups that were threatening Bangladesh's democracy and pluralist traditions.