BANGLADESH’S economy is one of the least free in the world, according to American think tank The Heritage Foundation.
In its Index of Economic Freedom based on 10 criteria, the organisation said Bangladesh secured 27th position out of 30 countries of Asia and the Pacific Rim and secured 143rd place out of 157 countries brought under the survey.
Extreme barriers to trade, excessive corruption, bureaucratic procedures, underdeveloped financial system and weak property rights contributed to Bangladesh’s position in economic freedom that appeared nearly at the bottom of the ranking.
On positive areas of economic freedom in its 2007 assessment, Heritage Foundation said the country’s economy was relatively free in terms of fiscal measures and freedom from the government. Monetary freedom, labour freedom, and business freedom are also relatively positive.
The foundation examined openness of Bangladesh’s economy based on business freedom, trade freedom, fiscal freedom, freedom from government, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.
Bangladesh has extreme barriers to trade freedom and tariffs are prohibitively high. It is also weak in investment freedom, property rights, and financial freedom, it added.
“Corruption is rampant,” the Heritage Foundation said, adding that chaotic regulations and restricted market sectors also impede greater foreign investment in the country as does a haphazard and politicised approach to the rule of law.
The banking sector is plagued with similar problems, the foundation observed.
Referring to Bangladesh’s weighted average tariff rate at 55.8 percent in 2005, it said barriers to trade include prohibitions and restrictions on imports, restrictive labelling requirements, and ineffectively operated customs procedures.
Referring to “widespread corruption”, Heritage Foundation said corruption serves as a non-tariff barrier… It is cancerous to all other economic freedoms, this is the key area that needs improvement.
“Starting of a business in Bangladesh takes an average of 37 days, compared to the world average of 48 days. Entrepreneurship should be easier for maximum job creation. Obtaining a business licence is relatively simple but closing a business is difficult.”
It said the overall freedom to start, operate, and close a business is relatively well protected by the national regulatory environment.