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Two reports prepared by two international agencies that dealt with, among others, the
economic scenario in Bangladesh were released in Dhaka on two separate days last week.
But the reports appear poles apart in their findings and conclusions. The differences in
their contents are so much that one is led to compare them with facts and fiction, so to
speak.
The first one -- the Global Competitive Report (GCR) -- was released on last Wednesday
by a private sector think tank, the Centre for Policy Dialogue (CPD) on behalf of the
author of the report, the World Economic Forum (WEF), a Switzerland-based outfit. The
CPD is the WEF's local associate. The report primarily represents the views of a very
small group of selected private entrepreneurs involved in doing business in or with
Bangladesh.
The GCR says Bangladesh continued to lose its competitive edge and slides down eight
notches to 110 from its earlier position of 102. A total of 117 countries were covered. In
comparison, the report placed India at 50 and Pakistan 83 from last year's 55 and 91
positions respectively. The report has also placed China at 49, one notch over India.
While releasing the GCR, the CPD's executive director Devapriya Bhattacharya says:
"Overall picture is deteriorating in Bangladesh compared to the global situation.
Corruption and governance still remains major problems here. There is no change in
perception. We can change perception by changing the reality."
According to media reports quoting Bhattacharya: 'the country is experiencing a
deteriorating trend in investment and the business environment index. The government is
suffering from indecision, and policy instability is a cause for increasing concern about
business environment.' However, in the absence of a copy of the report, this scribe could
not discern whether Bhattacharya was making his own comments or reflecting what was
mentioned in the report or the relevance thereof.
The other one was the World Investment Report (WIR), prepared by the UN and released
in Dhaka and globally by the UN Conference on Trade and Development (UNCTAD) on
Thursday. The UN report literally contradicted the WEF's GCR listing. UN Resident
Coordinator in Bangladesh Jorgen Lissner formally released the report in Dhaka along
with Board of Investment (BoI) executive director Mahmudur Rahman.
The WIR 2005, which covers the whole world, has advanced Bangladesh's position by 11
notches from last year's 133 to 122 this year. In the South Asian region, the WIR moved
India up by two notches while Pakistan and Nepal slid down by five and Sri Lanka by
eight notches respectively. However, in terms of FDI flow, Pakistan topped the list with
74 percent increase in inflow and with 72 percent rise, Bangladesh took the second
position. FDI in Sri Lanka increased by 12 percent while India recorded an eight percent
negative growth.
The UNCTAD's WIR 2005 -- the 15th in the series -- has pointed out those macro-
economic factors such as improved economic growth, weak US dollar, reduction of
country risk and improved business confidence, rising profitability and favourable
financing situation have all contributed towards the rising trend in FDI into Bangladesh.
Incidentally, the GCR in its study -- based entirely on opinions of the businessmen and
investors -- brought out only the negative aspects of the factors that WIR found to be
more positive and rewarding. Clearly, these contradictory findings appear to cast a
shadow of doubts on the intention as well as methodology applied to prepare the GCR to
arrive at the conclusions.
Analysts, however, are of the view that the two reports in question are totally different in
nature and attitude. The outcome of the reports, obviously, was largely influenced by the
interpretations, opinion and attitude of those who get involved in their preparation. The
WIR, for example, is based on cold figures, facts and their economic and, to a lesser
extent, political interpretations. The people who are involved in preparing this report are
easily identifiable and are highly educated, trained and experienced professionals.
On the other hand, a group formed and supported by the top notches in the private sector
having a global reach and ambition prepares the GCR; it was a survey based mostly on
opinion, attitude and mindset of the people who are in business. They are asked to fill up
the long list of a prepared questionnaire and they have to follow the pattern set by it. They
cannot deviate from the closely-knit format. Besides those participants are not identifiable
either. Profitability and related factors such as rules and regulations in a given country
and situation influence their opinion and firm up their mindset. The outcome of such
survey, therefore, could be biased.
One obvious question crops up in one's mind is that if the observations made by the
WEF's GCR is based on reality, then how come much higher level of investments are
coming into Bangladesh from various directions? The private sector entrepreneurs call a
spade a spade and unless they believe Bangladesh is competitive and profitable enough,
they would not have touched the country with a long pole. How come this simple and
most important factor that determines all business decisions eluded the participants of the
GCR?
Nobody should jump to conclusion at this stage that this scribe is suggesting that 'there is
nothing wrong in Bangladesh' and that 'milk and honey' is flowing in the country. Far
from it. Bangladesh has a long list of problems, including those correctly mentioned in
the GCR and nobody can deny this. Many other developing countries, too, have such
problems and are trying to cope with them. Yet they are not as successful as Bangladesh
in achieving a continuous GDP growth of around five percent for more than a decade and
in other social sectors. These are all acknowledged as fact by all and sundry.
And lastly, if Bangladesh is not competitive, then how could its exporters achieve over 16
percent growth in the first six months of the 2005 even after the withdrawal of textile
quota system? Despite all the problems that the country suffers from, this begs an answer
from the champions of GCR.
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