Vol. 5 Num 489 Mon. October 10, 2005  

Behind The Facade
Bangladesh in International League Tables

In this article I consider the international ranking of Bangladesh in terms of Human Development Index of UNDP, Corruption Index of Transparency International, Failed State Index of The Fund for Peace, and Growth Competitiveness Index of World Economic Forum.

Let us first consider the Human Development Index (HDI). The HDI is based on longevity (life expectancy at birth), education (adult literacy rate and combined gross enrollment ratio), and estimated earned income (in PPP US$ terms). Thus, HDI is a measure of health, knowledge, and standard of living. Since 1975, the value of HDI for Bangladesh has risen continuously from 0.345 in 1975 to 0.520 in 2003, the latest year for which the index is available. Since 2000, Bangladesh belongs to the medium human development category, which includes all the countries with HDI value between 0.500 and 0.800. For Bangladesh, the annual rate of increase in the HDI value accelerated continuously up to 2000. Thus, the annual growth rate exhibited by the HDI value for Bangladesh was 1.10 per cent between 1975 and 1980, 1.37 per cent between 1980 and 1985, 1.54 per cent between 1985 and 1990, 1.58 per cent between 1990 and 1995, and 2.39 per cent between 1995 and 2000.

But, the annual rate of increase has been substantially lower since 2000, at 0.92 per cent. It may be noted that, up to 2001, among the South Asian countries, Nepal and Pakistan were in low human development category, while Sri Lanka and India were in the medium category along with Bangladesh. But, while Bangladesh was ranked 139 in 2001, India and Sri Lanka were respectively ranked at 127 and 99. As of 2003, India retained its position at 127 while Sri Lanka improved to 93. Bangladesh also maintained its position at 139, but Nepal and Pakistan overtook Bangladesh acquiring ranks of 136 and 135 respectively. (All figures quoted above regarding HDI have been taken from or computed from figures obtained from UNDP, Human Development Report 2000 and 2005).

As indicated above, Bangladesh's HDI value increased steadily over the period 1975-2003; but the rate of increase considerably slowed after 2000 and the performance between 2000 and 2003 was rather disappointing when compared with those of the South Asian countries, Nepal and Pakistan. The question now is: what has been happening since 2003 and what might happen in future in respect of the socio-economic aspects included in HDI? It is important, therefore, to address the persisting and emerging problems in relation to income growth and distribution and other aspects of human development if the rate of increase in the HDI value is to be accelerated in future.

Transparency International has been ranking Bangladesh as the topmost corrupt country in the world for several years now and more recently Washington-based The Fund for Peace has assessed the country at number 17 in a list of failed or failing states in the world. The index to measure failed or failing states has been prepared for 60 countries, with relevant data collected during May-December 2004. The countries ranked one to 10 are fully or almost fully failed states, while those ranked 11 to 20 exhibit strong signs of going down that road, and those ranked 21 to 30 are okay for now but exhibit some signs of weakness in certain respects. Bangladesh belongs to the second category. In respect of both corruption and failed state indices one may question aspects of the methodologies used, but the fact remains that the conditions prevailing in Bangladesh are very unsavoury.

Corruption is pervasive and further widening and deepening in Bangladesh. It encompasses both public and private sectors. Collusion in corruption between, for example, the givers of bribes and takers of bribes is rampant, as it benefits both the parties.

Corruption is facilitated by lack of transparency and accountability in public administration. Politics has also become criminalised through corruption and muscle power and spawns farther corruption and hegemonic politics.

In relation to the failed state index, regardless of Bangladesh's ranking, even a casual observer would find serious warning signs regarding social disintegration in terms of, for example, increasing population density, increasing rural to urban migration, criminalisation of governance, large-scale criminal and political violence, deepening poverty and accentuating socio-economic inequality, widespread human rights violations, poor and deteriorating public services, and political confrontations. These are among the 12 indicators used by the Fund for Peace to make the assessment. But we do not seem to pay heed to the emerging signs and the spreading disaffection.

The World Economic Forum's Growth Competitiveness Index (GCI) is based on: the quality of macro-economic environment, the state of the country's public institutions, and, given the importance of technology and innovation, the level of its technological readiness. Three sub-indices are first constructed for these three pillars, as they are called, of the GCI, which is a weighted average of the sub-indices. Hard data is collected for different countries from various sources and, if hard data are not available, appropriate proxies are used. In terms of GCI, Bangladesh is ranked number 110 as of 2005, out of 117 countries for which the index has been constructed for the year, which is eight places below the country's ranking in 2004. On the other hand, India and Pakistan have both improved their competitiveness by five and eight places respectively. The GCI in fact measures the efficacy of the policies and institutions that determine the level of productivity in a country and is indicative of what level of prosperity a particular economy can attain. Productivity is in fact key to improved rates of return on investment and, therefore, key to economic growth. A more competitive economy is likely to grow faster compared to a less competitive economy. Bangladesh, ranked 110 (out of 117), exhibits a rather bleak picture relating to growth prospect over the medium and even longer term, unless the country's growth competitiveness can be improved significantly. But, the constraints are severe.

A reality check on the three pillars of GCI will clarify the prevailing situation in Bangladesh. On the basis of micro-economic environment sub-index, Bangladesh is ranked 83 (out of 117). This means that the situation is pretty bad, contrary to the claim that macro-economic stability continues to be a major success story of ours. In fact, the macro-economic environment is severely strained by surging inflation (annualised average being upward of 10 per cent now and increasing), a huge and rising trade gap (Tk 197 billion for the 11 months from July 2004 to May 2005, having risen from Tk 122 billion in the previous full year, i.e. 2003-04), large unproductive public expenditures, a persisting foreign exchange (dollar) crisis, stickiness in investment, and a huge amount of black money.

As to the public institutions, there are serious problems arising from the absence of effective local government institutions; centralised administration characterised by procrastinations, inefficiencies, and absence of authority at local levels to act quickly in response to emerging situations; pervasive corruption destroying the basic fabric of the institutional mechanisms and workings; the Anti-Corruption Commission remains marginal due to internal conflicts and government interference even after one year of its establishment, and it cannot also be effective as long as it is not made financially and administratively independent; political interference; non-separation of judiciary from the executive; and absence of rule of law. In fact, Bangladesh is ranked 117 (out of 117) in terms of the state of the country's public institutions.

In respect of technology and innovation, Bangladesh remains backward and is ranked 101 (out of 117). Human capability in Bangladesh remains low, given that adult literacy rate is only 41 per cent, and the spread of science and technology education is much more limited. Many schools and colleges located in the rural areas and small towns do not teach science at all; and those schools and colleges located in these areas, which teach science, are extremely ill-equipped in terms of teaching equipment and materials as well as lack of trained teachers. Only few school and colleges located in urban areas, particularly in large cities, are well-equipped to teach science. At the tertiary level, the proportion of students studying science and technology is extremely low. In terms of hardware, there are limited information technology facilities in the country, mostly in urban areas and available to people who know English. Agriculture, rural non-agricultural activities, and urban information sectors are still largely characterized by traditional technologies.

Bangladesh suffers from resource constrains, notwithstanding substantial remittances from Bangladeshis working abroad, due to low domestic mobilisation, low official development assistance (ODA), and low foreign direct investment (FDI). Moreover, large-scale corruption siphons off a large part of the available resources. Then, there is the all-pervasive poor governance, as reflected in widespread corruption and various warming signs indicated earlier, which is in a mutually reinforcing relationship with the resource constraints. At the same time, another major constraint is the large-scale socio-economic exclusion manifested in the already mentioned glaring and accentuating socio-economic disparity. All these problems facing the country are compounded by the absence of necessary political will to resolve them. It would seem, therefore, that the country is in the grip of a crippling leadership crisis. Let the indices discussed in this article act as a wake-up call to the nation, leading to appropriate action by all concerned for the purpose of sustainable (economically vibrant, socially equitable, environmentally sustainable, inclusive) national development.

Dr. Qazi Kholiquzzaman Ahmad is President, Bangladesh Economic Association (BEA), and Chairman, Bangladesh Unnayan Parishad (BUP).