The latest ranking shows the country dropped two spots from the last year’s 103 among 140 nations.
The report measures national competitiveness — defined as the set of institutions, policies and factors that determine the level of productivity.
In terms of its ranking across specific pillars this year, Bangladesh was placed in the 109th position on the index for institution, 114th for infrastructure, 108th for ICT adaptation, 95th for macroeconomic stability, 93rd for health, 117th for skills, according to Global Competitiveness Report 2018 released on Wednesday.
As per the report, India has slipped 10 spots, but led the South Asia region after being ranked 68th, followed by Sri Lanka at 84th, Nepal 108th and Pakistan 110th.
Singapore is the world’s most competitive economy, beating the United States to the top spot in the ranking of 141 economies.
Other countries in the top 10 include Hong Kong (3rd), Netherlands (4th), Switzerland (5th), Japan (6th), Germany (7th), Sweden (8th), United Kingdom (9th) and Denmark (10th).
Among the BRICS economies, China topped the list at 28th place with a score of 73.9, ahead of the Russian Federation (66.7, 43rd), South Africa (62.4, 60th), India (61.4, 68th) and Brazil 60.9, 71st).
The Global Competitiveness Report series was launched in 1979 to provide an annual assessment of the drivers of productivity and long-term economic growth.
The report said institution and governance in Bangladesh are the weakest areas in the business competiveness where majority of indicators are perceived to be deteriorated.
Weakest indicators are bribes for awarding public contracts, bribes for export and import, bribes in connection with tax payments and ethical standards of politicians.
Corruption has become a major burden for businesses which reduce competitiveness both in local and global markets, according to the report.
On infrastructure, the report said entrepreneurs’ perception on infrastructure has improved in 2019 but level of improvement is still inadequate to ensure accepted level of quality and efficiency of services.Despite significant public investment for infrastructure development over the last one decade, quality and standards of essential infrastructure services have yet to reach the accepted level.
Bangladesh was ranked 72nd in infrastructure part of logistic performance index in 2010 which has downgraded to 100th in 2018. A number of concerns have emerged with regard to services of different infrastructural facilities, said the report.
About technology, the report said Bangladesh is behind in using other 4IR technologies and related legal framework is poor. Companies are not using 4IR technologies such as big data, cloud computing tech, online gig economic activities and related legal framework is not ready such as for big data and cloud computing tech.
On education and human capital, the report mentioned that entrepreneurs have positively acknowledged the performance of most of the indicators related to education and human capital.
Significant positive changes in perception observed in case of country’s ability to attract highly skilled individuals from abroad, equal wage for male and female workers and formal social safety net attempted to cover selected group of people.
Changes in education and skill development are rather slow. Education system is not adequately meet the needs of competitive economy. Quality of basic academic and skill and training related education remain in weak state and the state of progress is very slow, according to the report.
It said financial sector is continued to struggle with its poor performance. All performance indicators are in negative terrain. Fifty-nine percent respondents expressed their dissatisfaction about weak soundness of banks though the level of response has somewhat improved.
About foreign trade and investment, the report said entrepreneurs perceived that foreign trade and investment regime have improved in 2018. Forty-two percent respondents mentioned that non-tariff barriers somewhat limit domestic competition which was better compared to the last year.
Domestic competitive environment has deteriorated in 2018, it said. No visible progress is discerned in key indicators rather degraded in some of the indicators. Entrepreneurs’ expressed their concern about domination of few business groups in major corporate activities. Seventy-five percent respondents mentioned that the situation has deteriorated in 2018.
Entrepreneurs’ perception about the role of new government on various issues is not necessarily positive in all accounts, the report said. Forty-seven percent expressed positively that business environment in 2019 will improve. Seventy-eight percent mentioned that problems in the banking sector will have significant adverse impact in domestic businesses.
The perception has significantly deteriorated in 2019. Eight percent respondents mentioned about further deteriorating situation in money laundering through various channels.
Bangladesh needs massive regulatory reform targeting public services, financial sector, public sector enterprises with a view to ensuring efficiency, accountability and transparency, the report suggested.
It said the regulatory bodies need to ensure delivering required services in quality, on time and without any corruption.