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Bangladesh improves in Economic Freedom Index-2018

DHAKA, Feb 5, 2018 (BSS)- Bangladesh's economic freedom score is 55.1, making its economy the 128th freest in the Economic Freedom Index-2018 released by the Heritage Foundation.

Bangladesh is ranked 29th among 43 countries in the Asia-Pacific region, and its rank is ahead of India (30th), Pakistan (31st), Nepal (32nd) and Vietnam (35th).

Its overall score has increased by 0.1 point, with improvements in the scores for judicial effectiveness and government integrity outpacing declines in property rights, trade freedom, and labor freedom, said the US-based conservative Heritage Foundation.

The report said Bangladesh's economy has grown by approximately six percent annually for two decades despite prolonged political instability, poor infrastructure, endemic corruption, insufficient power supplies, and slow implementation of economic reforms.

The fragile rule of law continues to undermine economic development, it said.

Corruption and marginal enforcement of property rights force workers and small businesses into the informal economy, it said, adding that despite some streamlining of business regulations, entrepreneurial activity is also hampered by an uncertain regulatory environment and the absence of effective institutional support for private-sector development.

The index uses four broad categories for measurement: rule of law, government size, regulatory efficiency and open markets.

Despite the violence in 2015, GDP growth has been robust. Garment exports, the backbone of Bangladesh's industrial sector, accounted for more than 80 percent of total exports and surpassed $25 billion in 2016. Emigrant remittances account for as much as eight percent of GDP.

It said property laws are antiquated, record-keeping systems are poor, and property rights are enforced unevenly.

Contract enforcement and dispute settlement are inefficient, the release said, adding that corruption and criminality, weak rule of law, limited bureaucratic transparency, and political polarization have undermined government accountability.

Trade is moderately important to Bangladesh's economy; the combined value of exports and imports equals 38 percent of GDP. The average applied tariff rate is 11.9 percent. Nontariff barriers impede trade. The government openness to foreign investment is less than average.

Amendments to the Bank Companies Act, intended to strengthen the central bank's independence and reduce special treatment of the state-owned commercial banks, have been implemented.

Hong Kong, Singapore, New Zealand, Switzerland, Australia, Ireland, Estonia, the UK, Canada and the UAE are among the top ranking countries.