Friday, September 9, 2011Business
Corruption emerges as major threat to Bangladesh
Corruption emerges as major threat to Bangladesh
World Economic Forum identifies a series of challenges; the nation loses one notch in Global Competitiveness Index
Star Business Report
Corruption will pose a major threat to the government in the coming years, according to a global survey released yesterday.
The survey by the World Economic Forum found Bangladesh's major businesses disagreed with the effectiveness of the country's efforts to combat corruption.
The observation came as Bangladesh slipped by one rung in the Global Competitiveness Index in 2011 to rank 108th due to inadequate infrastructure, inefficient bureaucracy and corruption.
Bangladesh's GCI score has increased by 2.5 percent, but the country lost a place further on the ladder in the survey of 142 countries, while other countries have advanced, according to the report released by the Centre for Policy Dialogue, the Bangladesh partner of World Economic Forum.
“Although positive changes were discerned under different indicators, these changes were insignificant to create enough forces to run the wheel of the economy at required pace,” it said.
The local think-tank, which released the opinion survey report at an event in the city yesterday, conducted the survey among 70 entrepreneurs and businessmen mostly in Dhaka city and took the year 2010 into account.
The survey finds that inadequate supply of infrastructure remained at the top as the problem factor, while corruption came second and inefficient government bureaucracy came third.
The report however forecasts that Bangladesh along with Cambodia will do better in 2011.
In the financial environment index, the survey found that 41 percent think that obtaining credit in 2010 was difficult.
About 62 percent respondents say although foreign direct investment rules are favourable in Bangladesh and beneficial for attracting new investment, the FDI inflow was insignificant.
Entrepreneurs in most cases did not find venture capital for innovative but risky projects, according to the survey.
Ninety-four percent respondents perceived that undocumented extra payments or bribes made by firms for tax payments have increased and assumed 'worst' proportions in 2010, an indication of rising corruption.
“Three-fourth respondents largely disagreed with the effectiveness of the efforts of the government to combat against corruption,” said Khondaker Golam Moazzem, senior research fellow of CPD, while presenting the report.
“Weak functioning of Anti-Corruption Commission and enactment of new laws with little power to take action independently are major shortfalls,” he said.
The report chronicled major challenges Bangladesh is going to face in the coming years.
“Controlling corruption will be a major challenge for the government in the coming years.”
“Difficulty in obtaining credit, poor monitoring and supervision both in banking and capital markets, weak regulation, poor financial auditing and reporting, and rise in money laundering are major concerns.”
The report said Bangladesh should place first and most important focus on infrastructure development, creating public institutions, reducing corruption and human resources development in order to enhance productivity.
“Strong political stand is required against corruption, wasteful or delayed public spending and local government system requires strengthening.”
Trade facilitation measures should be strengthened, it said.
The survey also threw light on the government's Digital Bangladesh vision, saying initiatives in the last two years were perceived to be inadequate to build 'Digital Bangladesh' by 2021.
CPD Executive Director Mustafizur Rahman, Distinguished Fellow Debapriya Bhattacharya and Head of Research Fahmida Khatun were present on the occasion.
