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Performance of public institutions worst in Bangladesh among 117 countries
FE Report

          The performance of public institutions that broadly reflects the quality of governance is the worst in Bangladesh among 117 countries that have been ranked in the Global Competitiveness Report (GCR), 2005-06, of the World Economic Forum (WEF).
A number of important indicators have been taken into consideration while assessing this performance. Such indicators relate to the judicial system and its capacity or otherwise to allow reasonable, expeditious, transparent and low-cost settlement of dispute or whether the justice is for sale or not, the capacity of the government to channel tax revenue back into the economy through productivity-enhancing investments in human capital and infrastructure, the efficiency or otherwise in the use of public money for development projects and also whether such money is mostly stolen or not.
The role of property rights and institutions, the nature of government's relationship with respect to the private sector, the state of the regulatory environment, layers of bureaucracy and red tape and their impact on competitiveness and the costs of business transactions and operations, the prevalence of institutional corruption, the extent of inefficient government intervention in the economy etc., are, among others, the areas of consideration for judging the quality of public institutions under the WEF's GCR.
By all such indicators, Bangladesh is placed at the bottommost place among the countries that have been covered by the Global Competitiveness Report 2005-06. This reflects the continued deterioration of the performance of Bangladesh's public or government institutions, its endemic corruption and a sordid state of rule of law.
Despite relatively better position of Bangladesh - 83rd ranking among 117 countries - in macroeconomic environment index of the GCR 2005-06, its most nagging governance problems - a situation that has continued to deteriorate over the years for lack of hard policy actions to remedy the same -- has badly hurt the competitiveness of the country's economy.
The WEF's definition of competitiveness goes " beyond notions of exchange rate competitiveness, and links the concept to productivity".
"Thus, competitiveness is defined as that collection of factors, policies and institutions which determine the level of productivity of a country and that, therefore, determine the level of prosperity that can be attained by an economy. However, productivity is also the key driver of the rates of return on investment, which, in turn, determine the aggregate growth rates of the economy. Thus, a more competitive economy is one that is likely to grow faster over the medium to long term", so notes the Executive Summary of the WEF's global competitiveness Report 2005-06.
The WEF has been measuring national competitiveness and producing Competitiveness Reports for well over two decades. The specific methodology that is used to measure competitiveness has been based since 2001 on a model developed for the WEF by Jeffery Sachs and John McArthur called the Growth Competitiveness Index (GCI).
The WEF has expanded its worldwide country coverage from 104 countries last year to 117 countries in this year's Global Competitiveness Report (GCR), in view of the importance of capacity building particularly in developing countries.
The GCR attempts to provide "the most accurate snapshot possible of the overall global economic landscape" with the valuable inputs provided by many distinguished authors and scholars and further supported and corroborated by Executive Opinion Survey in the countries covered by it.
The state of the country's public institutions is one of the three pillars on which the GCR is prepared. The other two pillars are: the quality of the macroeconomic environment and the level of the country's technological readiness. All these "three pillars" are considered the most critical aspects relating to "the range of factors that go into explaining the evolution of growth in a country".
In the Public Institutions Index this year, Bangladesh has scored 2.55, the lowest point among 117 countries covered under the WEF's GCR 2005-06.
Countries scoring less than 3.0 point in terms of quality of their public institutions include: Chad in Africa (2.64), Kyrgyz Republic in central Asia (2.89), Cambodia in South East Asia (2.90), Ecuador in South America (2.93), and Paraguay in South America (2.97).
New Zealand and Denmark with their same score of 6.35 point are at the top of Public Institutions Index under the GCR. They are followed by Iceland (6.33 point), Singapore (6.25 point) and Finland (6.19 point).
In South Asia, Pakistan has scored 3.31 point finding its place at 103rd position in Public Institutions Index. India is ahead of all other South Asian countries in the same index with its ranking at 52nd position (4.52 point). Sri Lanka is placed at 100th position with its score of 3.34 point.
Bangladesh is placed slightly better in the Macroeconomic Index of the GCR 2005-06. With its score of 3.43 point, it is ranked 83 among 117 countries covered under this index.
Among the South Asian countries, Sri Lanka is ranked at 94 with its score 3.17 point under the same Macroeconomic Index.
But Pakistan (69 rank, 3.74 point) and India (52nd rank, 4.52 point) are well ahead of Bangladesh and Sri Lanka under this index.
Under the technology index of the GCR, Bangladesh is ranked 101th among 117 countries with its score of 2.66 point. Sri Lanka (88th place, 2.79 point) Pakistan (80th place, 2.94 point) and India (55th place, 3.42 point) are in much higher positions than that of Bangladesh in the Technology Index.
In the overall Growth Competitiveness Index 2005, Bangladesh has a ranking of 110 (2.86 point) among 117 countries, down eight ranks of the previous year.
Sri Lanka has also dropped 25 ranks - from 73rd in 2004 to 98th in 2005-in this index.
Pakistan has moved up eight ranks to 83rd with its score of 3.33 in one year.
India has also moved up five places to 50th rank and her improved rank mirrors higher position in the technology index.
The WEF's GCR also incorporates the Business Competitiveness Index (BCI) that focuses "on the underlying microeconomic factors which determine economies' current sustainable levels of productivity and competitiveness."
The BCI, thus, provides a complimentary approach to the forward-looking macroeconomic approach of the Growth Cooperativeness Index (GCI). It rests "on the idea that microeconomic factors are critical for national competitiveness since wealth is actually created at the level of firms operating in an economy". It "specifically measures two areas that are critical to the microeconomic business environment in an economy: the sophistication of company operations and strategy as well as the quality of the overarching national business environment in which they are operating".
Under BCI rankings 2005, Bangladesh is placed at 100th position, ahead of 16 other countries across the world. These countries, placed after Bangladesh are: Dominican Republic, Tajikistan, Guatemala, Mongolia, Honduras, Nicaragua, Ecuador, Kyrgyz, East Timor and Chad.
But other South Asia countries are ranked at much higher positions than Bangladesh. Sri Lanka is thus ranked 72nd, Pakistan, 66th and India, 31st in the BCI.


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