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Will the better global indices push our economy ahead?

M. Aminul Islam Akanda
BANGLADESH erased its negative branding of Kissinger's bottomless basket case in the 2000s.
The economy attained an average growth rate of 6.3% in the early 2010 from a mere of 3.7% in the 1980s. Meanwhile, the economic system has been transformed into market capitalism. It is also endowed with some capitalistic brands like its position in the Goldman-Sachs's next eleven emerging economies and in the Coface's new ten emerging countries. Moreover, we are praised for our progresses in some global indices and rankings. The indices compare the social and economic environments of different countries in the world. Some of them are progressive-better that indicate better position against higher scores, whereas the regressive-better indices explain reversely.
Our country, like other 47 least developed countries (LDCs), suffers from a vicious cycle of capital formation, low level of human capital, technological deficiency and macroeconomic instability. Moreover, it is the 5th climate vulnerable country in the world as per the Climate Risk Index (CRI) 2014. The CRI is a progressivebetter index, the score of which was reported at 16.01 in 2006 and 19.67 in 2013 indicating a risk diminution that was mainly for high adaptation. On the other hand, our rank was 11 in the Happy Planet Index (HP1) 2012. The HPI is also a progressive-better index by the New Economic Foundation. It calculates happy life years from life expectancy adjusted to well-being and ecological footprint. Our HPI score was 12.6% higher than that of South Asia. However, our better position from low greenhouse gas emission cannot lessen our climate risk as the risk comes from others emission, too. Interestingly a vulnerable country with 6% per capita consumption of a developed one, only PPP $ 1,830 per capita at 2012 international USS, offers more long and happy life.
The Institute for Economics and Peace has also recognized Bangladesh as a medium peaceful country. It is as per the Global Peace Index (GPI), a regressive-better index at a range of 10-0 that is made of 22 indicators on domestic and external conflicts, social safety and security, and militarization. Our peace level improved for a fall in GPI score from 2.118 to 2.106 during 2008-2013. However, it deteriorated by 0.8% in South Asia and 12% in the world over the same period. Moreover, the World Happiness Index (WHI) has shown a happiness loss in all South Asian countries except Bangladesh. The UN Sustainable Development Solutions Network prepares the WHI, a progressive-better index at a range of 0-10, taking GDP per capita, social support, healthy life expectancy, life choice freedom, generosity and corruption perception into account. We gained happiness for a rise in WHI to 4.804 during 2010-12 from 4.473 during 2005-07. Gains in peace and happiness are our wealth but how long could an LDC retain it in the wave of globalization?
'Development as Freedom' is a famous book, where Nobel laureate economist Amartay Sen pointed out five freedoms including economic freedom. The Heritage Foundation, not on the same philosophy, produces the Economic Freedom Index (EFI) that is a progressive-better index at a range of 0-100. Our economy turned into mostly 'unfree' from repressed one for a rise in the EFI from 44.2 to 52.6 during 2008-2013. We could not develop our economy with an EFI rank at 131 that China could do with a rank at 137. Our progress is slow for low scores in a few subindices like property rights protection, freedom from corruption and financial freedom. However, our overall score is one point higher than the LDCs' average. Though the EFI is a widely promulgated index, it does not tell insight of high investment of the developing economies with low scores in investment freedom.
Meanwhile, our economy has stepped up of the LDCs' average in
reducing some basic deficiencies. We moved out of 'extreme alarming’ and 'alarming' levels of hunger. The Global Hunger Index (GHI) 2013 ranked us as the 58th least hunger affected country in the world. Our progress is very satisfactory in poverty alleviation, primary education, child healthcare, maternal health and basic sanitation.
Meanwhile, we have received a few awards from the United Nations and other international agencies. All these have created a base for human development. According to the Human Development Index (HDI) 2013, our score is higher than the LDCs' average. The United Nations Development Program prepares this HDI as a progressive-better index at a range of 0-1 taking life expectancy; literacy rate and per capita income into account. Our HDI score increased from 0.494 to 0.558 during 2005-2013 that offered us a status of medium human developed countries with 142nd position in the world. Based on potential young human resources, the JP Morgan placed us in the Frontier Five. However, we are still far to make our human resources into human capital.
The World Economic Forum has listed Bangladesh among the factordriven economies as per its Global Competitiveness Index (GCI) 2013. This type of economies competes primarily on unskilled labor and natural resources. They do not have wellfunctioning institutions, well-developed infrastructures, stable macro-economic environment and healthy workforce with basic education. Our low competitiveness level remains almost unchanged for the same GCI score at 3.7 out of 10 in 2006 and 2013. We will have to cross the stage of efficiency-driven and other two stages inbetween to peak at the innovation-driven economy. Can we reach at that peak where our position is just above Myanmar from the last among 28 countries in the Asia and Pacific as per the Knowledge Economy Index 2013?
Our investment climate is too unfavorable to accumulate idle money. The
actual investment is 27% of GDP against 32% of planned one. Theoretically, it will create negative change in inventories and will promote investment. However, our investment was seen insensible to interest rate and also to the World Bank's 27th rank for investment security. Though our taxation is said investment friendly, its position is 92nd in the world as per the index of the effect of taxation on incentive to invest. Our high savings rate cannot stimulate investment mainly due to corruption. We might escape our status of the top-most corrupted country but the chief of Anti-corruption Commission acknowledged it to spread into the blood of the people. Moreover, charismatic misappropriation was observed into non-productive investment over the last few years. Can we raise investment to create jobs while our private investment is declining?
Our unemployment situation gets so alarming that 47% of the bachelordegree alumnae and 14.37% of doctors and engineers remain unemployed. The education system is also reported non-sensible to market demand. There will be sixty million unemployed people in Bangladesh in 2015 as per an ILO estimate. Many economic analysts and business bodies argue in favor of the freedom from corruption as an investment stimulus. Sometimes our politicians confer anti-corruption speech. However, investors of either native or overseas cannot keep confidence on them. Our rank in public trust on politicians is 132 with an index value of 1.9 out of 10. We need political pledge to facilitate efficient production processes. Any improvements in global indices would not stimulate economic activities to make our country into a developed one. However, they might inspire us to move ahead. An investment climate faithful to private investors and friendly to environment may turn our visions into reality.
The writer Is Associate Professor and Chairman, Department of Economics, Comllla University.
Email: akanda_al@hotmall.com