Bangladesh’s ranking on economic freedom has moved up seven notches to 121st from 128th this year despite endemic corruption, poor infrastructure, insufficient power supply, and slow implementation of economic reforms.
According to the Economic Freedom Index 2019 released by the Heritage Foundation, a Washington-based think tank, the government’s reforms have improved the freedom of doing business in the country.
However, slower implementation of the reforms is undermining economic development, said the global report.
“The fragile rule of law continues to undermine economic development. Corruption and weak enforcement of property rights force workers and small businesses into the informal economy,” it added.
The index ranked 186 countries and categorised them under five groups -- free, mostly free, moderately free, mostly unfree and repressed.
“Bangladesh’s economic freedom score is 55.6, making its economy the 121st freest in the 2019 index,” said the report. Bangladesh falls in the “mostly unfree” category.
While the country’s overall score has increased by 0.5 points, it scored higher in terms of property rights and “government integrity countering declines in investment freedom and fiscal health”, the report added.
“Property laws are outdated, and land disputes are common. The judiciary is slow and lacks independence. Contract enforcement and dispute settlement procedures are inefficient. Endemic corruption and criminality, weak rule of law, limited bureaucratic transparency, and political polarisation have undermined government accountability,” it said.
In the 2018 Index of Economic Freedom, Bangladesh’s position was 128th, with a score of 55.1 points.
Bangladesh also ranked 27th among 43 countries in the Asia-Pacific region, and its overall score is below the regional and world averages, showed the report. The world average freedom score is 60.8 points, while the Asia Pacific regional average stands at 60.6 points.
As per the report, robust annual economic growth of approximately 6 percent for two decades has been driven by a rapid increase in private consumption and fixed investment.
“Nevertheless, Bangladesh still grapples with poor infrastructure, endemic corruption, insufficient power supplies, and slow implementation of economic reforms,” the report stated.
On the other hand, the report found that the “fragile rule of law” continues to “undermine economic development”, while “corruption and weak enforcement of property rights” force workers and small businesses into the informal economy.
Furthermore, despite some progress in “streamlining business regulations, entrepreneurial activity is hampered by an uncertain regulatory environment and the absence of effective long-term institutional support for private-sector development”, according to the report.
The report also stated that although a well-functioning labour market has not been fully developed yet, labour productivity growth has been slightly higher than wage hikes.
The index also revealed that in the South Asian region, Nepal ranked 136th, Sri Lanka ranked 115th, Bhutan ranked 74th, India 129th, Pakistan 131st, and the Maldives achieved the status of 141st economy.
Hong Kong, Singapore and New Zealand each logged increases in their index scores, finishing first, second, and third in the rankings, respectively scoring 90.2, 89.4, and 84.4 points.
The Index of Economic Freedom evaluates countries on four broad policy areas that affect economic freedom—rule of law, government size, regulatory efficiency, and open markets.
Additionally, property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labour freedom, monetary freedom, trade freedom, investment freedom, and financial freedom are also taken into account while measuring the economic freedom of a country.