Bangladesh excluded from GCI rankings due to limited data availability: Experts

Bangladesh has not been included in the recent Global Competitiveness Index (GCI) rankings, primarily due to limited or inconsistent data availability, experts and academics said today (25 December).

The index relies on comprehensive data and surveys, which may not have been fully provided or accessible for Bangladesh, they noted while speaking at a conference in Chattogram titled "Navigating Bangladesh's Evolving Economic Landscape".

Emon Kalyan Chowdhury, academic and head of the Department of Accounting at CIU Business School, presented a paper titled "Strengthening Local Industries for Global Competitiveness: The Role of Strategic Cost Management" at the event.

The session was conducted by Muslim Chowdhury, chairman of Sonali Bank PLC, and featured comments from discussants, including Md Kausar Alam, Group CFO and company secretary of Sunshine Group and vice-president of ICMAB; Md Maksudur Rahman, CEO of EDISON Logistics Business and council member of ICMAB; and AKM Kamruzzaman, senior executive vice-president and head of Operations at LankaBangla Finance Limited.

While presenting the paper, Emon Kalyan said Bangladesh was last included in the Global Competitiveness Index in 2019, ranking 105th out of 141 countries.

According to the document, the country faces significant challenges in business dynamism, labour market, product market, and skills. Business dynamism ranks 121st, hampered by bureaucratic inefficiencies, complex regulations, and limited innovation, alongside minimal investment in research and development.

"The labour market, also ranked 121st, suffers from a mismatch between education outputs and market needs, further strained by the dominance of the informal sector, which undermines labour protections and productivity. 

"The product market (ranked 119th) is hindered by limited competition, trade inefficiencies, and logistical bottlenecks such as high tariffs, port congestion, and slow customs processes. The skills pillar (ranked 117th) reflects an education system focused on rote learning and insufficient vocational training, with only 30% of the workforce equipped with industry-relevant skills," said Emon.

He also noted that economic pressures continue to mount, with a 40% gas deficit, a 12% rise in production costs, and a 2.91% drop in exports in 2023 compared to 2022.

Export challenges have been further aggravated by a 15% reduction, as letters of credit fell by 50%, Emon said citing the paper.

Rising inequality, reflected in a GINI coefficient of 0.33, sees the top 10% controlling 38% of national income. Economic growth is projected to slow by 1.5%, while the debt burden, at 39.80% of GDP, and a 12% decline in private sector credit have further strained the economy. Unemployment remains a concern, with youth unemployment reaching 11.3%, the document stated. 

Misinformation, societal polarisation, and an uncertain business climate have deterred international investors, contributing to a 15% decline in FDI in 2023. A $170 per capita gap between investment needs and actual supply further highlights the need for financial reform.

Despite these challenges, Bangladesh is on track to emerge as an economic powerhouse.

Its diversified economic portfolio includes RMG (10.35% of GDP), remittance (4.76%), and agriculture (11.20%). Major infrastructure projects like the Padma Bridge, metro rail, and Matarbari deep-sea port underline the country's development prospects.

Improvements in governance, reduced corruption, and business-friendly policies have boosted FDI to $3.48 billion in 2022. Financial sector reforms, such as expanded banking access for 50% of adults, and the growing GDP share of the manufacturing sector (23.66% in FY 2020-21), demonstrate economic resilience.

The burgeoning startup ecosystem, with 2,500 startups and an annual addition of 200, supports future growth projections of $1 trillion by 2033.

"Strengthening local industries like handloom and crafts, which employ 1.2 million artisans and generate $40 million in exports, remains critical for preserving cultural heritage and ensuring sustainable growth," said Emon.

Earlier in the day, another keynote presentation, titled "Sustainable Economic Recovery: Managing Inflation, Debt, & Fiscal Policy," was delivered by M Masrur Reaz,  prominent economist and public policy expert, as well as the chairman and CEO of Policy Exchange Bangladesh. 

Reaz highlighted Bangladesh's remarkable economic journey over the past 50 years, transitioning from a low-income to a lower-middle-income country.
Manufacturing's contribution to GDP surged from 5.5% in 1971 to 23% in FY 2023, with the RMG sector accounting for 10.4% of GDP and 84.5% of exports, he said.

However, he noted that challenges such as a 19.8% drop in FDI, persistent inflation, and declining industrial investments.

"Cost-push inflation, supply-chain disruptions, and tight monetary policies are further impeding industrial growth. The external debt burden, now at $83.22 billion, underscores the need for enhanced fiscal management and accelerated investment," he said.

Despite these hurdles, Reaz emphasised that policy reforms, infrastructure development, and economic diversification are positioning Bangladesh for sustainable growth. "Strategic investments in governance, tax mobilization, and industrial expansion remain crucial for maintaining the country's economic momentum."