Look at below graph for 2015 that compares India and Pakistan:
No source? How convenient. If its that riazhaq stuff again, its been thoroughly dismantled many times. Heck the average size of household in India and Pakistan (used in the sampling regime of both) is vastly different to begin with:
If a average household in Pakistan is 50%+ larger than one in India and BD, what will be the average distortion present on ownership items based on that (assuming everything else is perfectly the same/consistent for argument sake)? Has that correction factor even been attempted to be studied? (and is it even relevant if better options for survey bounds are present?) This is why per capita is much more useful for comparison.....and that too having a standardised sampling regime (with global aggregate variables) based on that, which is what PPP is. Resolving into different methodologies, samples and discrete items (esp for developing countries especially one that is in SDDS and the other is in GDDS) is very flawed.
Like I say these donors do not hand out loans if there is evidence of high-level corruption. This is what happened with World Bank as regards Padma Bridge at start of this decade.
Uh sure they do, its not like they aren't going to get paid back the loan (+interest) because of the corruption. The corruption just takes its toll on the Bangladeshi people....like a rolling boil/simmer instead of hot boil (where the entire country defaults its payments because of grand scale mismanagement....which can be corruption based or simply policy based or many other factors).
With corruption, instead of using up 1 billion dollars for X result, you use up some multiple of it for the same result....or other way around you get multiple less result for the same amount of money. That plays in again to the atrocious low realised consumption (esp the negative multiplier effect of such if its a base logistics capex)....and overall terrible efficiency parameters of BD. If BD did lot better on its internal corruption, it would get 2 bridges for the 1 it is getting now etc...or need only half the money for the same result (or whatever the ratio is, obv its not really studied)...but its not like it would not be able to raise the loan sum on physical capex as long as it has illustrated its fiscal structure/system is predictable and reliable for outside liquidity providers. You can have a bad rotten economic/corruption etc system, but still be largely predictable on BoP/CA etc (only one in the region where the latter is starting to pose a real issue is Pakistan recently)....like I said the "cut" that BD govt takes is simply an assured amount integrated into the loan amount. The result/loan ratio is what the issue is with regards to comparing with FDI (which bypasses the clearly corrupt BD govt once approval given).
The total on offer (capital bound) to BD is more determined by the standards (in information collection and transparency and frequency on all subjects of note) its govt (public sector) has illustrated to the IMF/WB et al and accrued experience of private sector in the wider global capital markets. These both determine its credit rating and standards qualification in the financial world past the raw market dynamics it can offer. Corruption is just a transmittance filter inside Bangladesh...esp given BD has next to no financial power projection past its borders.
FDI on other hand bypasses much of this (given its private enterprise with little to no opportunity cost as far as taxpayer footprint goes) and focuses on the best proven/high frontier interest segments of BD....given a private managed entity outside BD is shouldering the full risk of investment (rather than any BD taxpayer or BD citizenry). Its scarcity in BD (and relative stagnation at such low base over the last 3 years when the argument you are making is that BD has never been better) is thus quite telling with regards to the GCF composition in BD.
Why are you ignoring a BD government minister refusing a bribe from a Chinese company and then the company is now blacklisted in BD as a result? This single fact shows how BD is lowering corruption these days.
That was good move (if done for the reason BD said it was done, rather than say some political optics)....again it helps BD internally rather than pose much impact on its foreign capital bound (one only needs to look at sensitivity for a capex surge from a credit rating improvement compared to single bribe blacklisting event).
Also one instance could be outlier...or maybe its more of a norm (given low frequency nature of the variable at hand here)....who can really say for sure? Thats why I go with the corruption perception index as some sort of overall reference....BD has much improving to do even to catch up with the region.
You are technically correct but BD is better than Pakistan who is at B, and we know how heavily indebted Pakistan is.
Yah Pakistan has taken credit rating hits precisely because of the nature of its debt and its specific persistence in relation to other markers. It certainly wasn't able to borrow this level (from the conventional global markets) at the credit rating of B and also much of the borrowing impact recently comes from China which doesnt care as much about the credit rating markers (if you look at their strategy in say Africa and how they later collect on the loans not panning out in direct ROI that was "projected").
Definitely Bangladesh has managed its BoP much better compared to Pakistan and is more wary of the cheap Chinese loans (and China is also testing waters for time being compared to Pakistan where they have gone pretty much all in w.r.t strategy). That is more policy-based (cabinet, high govt, central bank level etc) compared to in-situ internal corruption (bureaucracy pyramid etc) levels as I mentioned before.
Its a complicated formula, hence the need to compare to many more (developing) countries in this regression to account for all variables and the histories....when that is done credit rating does play a large role esp when you are in GDDS and are not going for full blown china-dependent route (but wisely want to hedge etc). If you can get to SDDS, you will be in line to get to investment grade, in fact it may even be a requirement....and that will only improve BD situation as far as capital bounds go....but that needs much reform in Bangladesh finance/banking/BBS and better experience at all levels (esp private sector) of interaction with world finance sector.
BD can get more loans as it can pay the money back since it only spends 15% of it's budget on debt repayments in contrast to 25% for India and Pakistan(lower credit rating than BD).
Its more like 20% for BD, 25% for India and 30 - 40% region (and increasing I think) for Pakistan when standardised to WB reference. This is by revenue rather than expense as denominator:
https://data.worldbank.org/indicator/GC.XPN.INTP.RV.ZS?locations=IN-BD-PK
BD indeed was around 15% level about 4 years back, hence its increase to 20% in its specific case could be a problem (esp with your argument), but also be an indication it is maturing even within its specific credit rating band. Hard to say, we need a decade or two more of history and BD should aim to graduate to SDDS soon after it graduates from LDC.
That's just the govt side of things too and not very up to date....not to mention the plethora of ratios one can use (and then argue as most important). More recently, India (economy in total) is the only major one in the region that has negative transfer of external debt (more repayment than disbursement and thus diminishing the total stock payable)...probably linked in large part to FDI,FPI etc replacing need for loans that were taken previously:
http://blogs.worldbank.org/opendata/are-south-asian-countries-sinking-debt-trap
You can go have fun with some numbers here:
http://datatopics.worldbank.org/debt/ids/country/BGD
...then talk about it being "similar".
