Bangladesh 7 notches up on Economic Freedom Index-2019
Bangladesh’s economic freedom score is 55.6, making its economy the 121st freest in the Economic Freedom Index-2019 released by the Heritage Foundation, a US-based conservative.
Gaining 55.1 score, the country marked 128th
position in the last year’s index.
According to this year’s report, Bangladesh is ranked 27th among 43 countries in the Asia–Pacific region, and its overall score is below the regional and world averages.
Its overall score has increased by 0.5 point, with higher scores on factors including property rights and government integrity countering declines in investment freedom and fiscal health, it said.
The report said robust economic growth of approximately 6 percent annually 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, it said.
The fragile rule of law continues to undermine economic development, the report said, adding that corruption and weak enforcement of property rights force workers and small businesses into the informal economy.
Entrepreneurial activity is also hampered by an uncertain regulatory environment.
The report said that despite political instability, economic growth is robust, led by garment exports.
Property laws are antiquated, and land disputes are common, it said, adding that the judiciary is slow and lacks independence and contract enforcement and dispute settlement procedures are inefficient.
Endemic corruption and criminality, weak rule of law, limited bureaucratic transparency, and political polarization have undermined government accountability.
High-profile corruption cases are common, it said, citing that two recent cases involved a chief justice and a former prime minister.
As per the report, the top income tax rate is 25 percent, and the top corporate tax rate is 45 percent.
Other taxes include a value-added tax, it said, mentioning that the overall tax burden equals 8.8 percent of total domestic income.
Over the past three years, government spending has amounted to 13.6 percent of the country’s output (GDP), and budget deficits have averaged 3.6 percent of GDP. Public debt is equivalent to 32.4 percent of GDP.
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, it said.
A well-functioning labor market has not been fully developed, but labor productivity growth has been slightly higher than wage hikes, the report said, adding that the state continues its extensive subsidizing of food, fuel, electricity, and agriculture.
As per the statement, the combined value of exports and imports is equal to 35.3 percent of GDP and the average applied tariff rate is 10.7 percent.
The government has taken steps to reduce bureaucratic barriers to investment, but overall progress has been slow, it said.
State ownership and interference in the financial sector remain considerable, the report said, adding that about 54 percent of adult Bangladeshis have access to an account with a formal banking institution.