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Syed Hassan, a Bangladesh citizen who currently [May 2014] lives in San Francisco, has completed a study of the home country government's economic policies as compared to the MIEPA list of policies as outlined above. The study on Bangladesh is shown below. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2013. Used herein with permission]
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Comparison of Bangladesh's economic policies to MIEPA criteria as prepared by native student of Bangladesh, Syed Hassan, studying in the US in May 2014.
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 3.0 9.0 15.0 60% 2 2.0 6.0 15.0 40 3 1.0 3.0 15.0 20 4 2.5 7.5 15.0 50 5 4.0 12.0 15.0 80 6 4.0 12.0 15.0 80 7 1.5 4.0 15.0 30 8 3.0 9.0 15.0 60 9 2.0 6.0 15.0 40 10 5.0 15.0 15.0 100 11 3.5 10.5 15.0 70 12 5.0 10.0 10.0 100 13 3.0 6.0 10.0 60 14 5.0 10.0 10.0 100 15 4.0 8.0 10.0 80 16 2.0 4.0 10.0 40 17 3.0 6.0 10.0 60 18 1.0 2.0 10.0 20 19 3.5 7.0 10.0 70 20 5.0 10.0 10.0 100 21 4.4 8.8 10.0 100 22 4.0 8.0 10.0 80 23 3.5 7.0 10.0 70 24 0.5 1.0 10.0 10 25 1.0 2.0 10.0 20 26 3.5 7.0 10.0 70 27 3.0 6.0 10.0 60 28 4.0 8.0 10.0 80 29 3.0 3.0 5.0 60 30 3.0 3.0 5.0 60 31 4.5 4.5 5.0 90 32 3.0 3.0 5.0 60 33 3.0 3.0 5.0 60 34 4.0 4.0 5.0 80 TOTAL 107.4 225.3 365.0 61.7% ===== ====== ===== =====
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1 – Freedom from Internal Control 3.0
In this category Bangladesh scores a 3.0, because though there is freedom to move freely throughout the country there may be restrictions imposed by the state in the interest of the general public. For a business to maximize opportunity and create new enterprises and wealth they must go through many loopholes. This lessens the ability for new business growth.
2 – Freedom of Speech 2.0
In this category Bangladesh scores very low at only 2.0, due to the fact that there has been a great oppression of free speech in Bangladesh. There are many issues right now going in the country that aren’t able to make it out to the world press due to intervention from third parties that keep that information secured. Not allowing freedom of speech has held back many advances and support that citizens might of gained. For a new business the inability to voice an opinion or make a statement creates a huge problem.
3 – Effective, fair police force 1.0
In this category Bangladesh scores a very low score of 1.0 due to the high rate of corruption in the country. For a new business to succeed in a country there must be a good enforcement of police action that allows for protection from criminals. Yet in Bangladesh’s case the corruption has become such a major issues that police enforcement is a bad thing rather than good. In many cases citizens pay more in bribes to the police than they do to the government. With this major issue on hand the score of 1.0 is sufficient.
4 Private Property – 2.5
Bangladesh in this category scores merely a 2.5 due to lack of rights that protect business in the aspect of private property. In the major listings of global property rights in Asia, Bangladesh ranks at the bottom due to a subcomponent of the index of economic freedom allowed through property rights. This scale basically is a measure of rights that are allocated in terms of private property ownership. Furthermore, in today’s current situation the increase in property value means it is harder for investors and businesses to find land for industrial use. Moreover being able to hold onto private properties it is also difficult due to the negative effects on corruption. Without the right guide, a new venture capitalist or private business doesn’t stand a great chance in improving a new business through investments in private property without the right guidance. Without the right guidance, new businesses are merely most likely to fall into a stream of corruption and end up with barely any profits.
5 Commercial Banks – 4.0
In this category Bangladesh scores a 4.0 due to the fact that there are a vast amount of private banks and foreign banks throughout the country willing to lend out to new businesses. Also the introduction of micro loans through noble peace price winner Dr. Yunus has allowed for great growth in the economy. Also banks in the country do a great job of facilitating cash deposits of citizens and have an 8.6% interest rate on deposits as of January 2013 and 7.17% on borrowing. For a new business the vast amount of private and foreign banks through out the country, which are allowing lending to borrowers are a good sign.
6 Communication Systems – 4.0
In this category Bangladesh receives a score of 4.5 due to the vast expanses of radio stations, T.V networks, and newspapers, which are ubiquitous throughout the country. The recent introduction of many different T.V networks throughout the country has allowed for a better media stream that allows the general public to know what’s going on throughout the country in terms of news. Also the recent introduction to 3G strength signals for smartphones have allowed for better cell phone communication signals. Though Bangladesh may be a bit behind in terms of technology, they’re doing their best to slowly come up the ranks providing the country with better Communication systems.
7 Transportation – 1.5
In Bangladesh, transportation is a category, which is not as highly scored, receiving only a score of 1.5. The transportation facilities throughout the country are very old such as the railroad system, and shipping lines. These areas of transportation aren’t also very highly regulated or inspected allowing for major incidents in the past that have occurred resulting a great loss in goods and products. Also the underdeveloped roads and bridges today are causing major concerns due to the fact that some bridges show signs of erosion and decay on the infrastructure. The roads also are very bad, and getting from one place to another at times takes hours. A great example is sometimes traveling only a distance of a few miles may take hours, due to the traffic and inadequate roads. Though the country’s main method of moving goods, are ship and freight. The two aren’t regularly inspected allowing for danger concerns to the public, which explains the low score of 1.5.
8 Education – 3.0
In this category Bangladesh scores 3.0. Bangladesh is one of the poorest countries in the world. And the inadequate budgetary allocations for education, poor planning and irregularities have left almost half of the country’s population illiterate. Ever since Bangladesh became independent in 1971, the literacy rate was abysmal at only 16.8% as of 2009 that literacy rate has come up to 53%. The system of education that Bangladesh follows is similar to the British education system. Yet only the higher income class has the opportunity to allow their kids for a greater education through the use of private school education. But still the competitiveness of the nations students is great and there are quite a few that receive scholarships and continue on to becoming highly educated. The quality of education in primary schools and throughout college is acceptable yet the quantity of education is minimal. To pursue a higher education students must be well prepared financially.
9 Social Mobility – 2.0
In this category Bangladesh receives only a score of 2.0 due to the lessened ability for social mobility for all citizens. In terms of a new business there needs to be jobs available in all pubic sectors which must be earned by ability, but in terms Bangladesh sometimes the ability and education of an individual is overlooked and social connections is what plays the key roles in job placement. Also the income inequality is so great that not all citizens can ever work up that ladder to get the good jobs. There are cases where individuals from very low social classes have worked their way upwards to the higher elite class, but those cases are very rare. Mainly to work up the social ladder to the elite, an individual must have major social connections with people who can make that happen.
10 Freedom from Outside Control – 5.0
In this category Bangladesh receives a score of 5.0 because there is no outside sources that severely affect the country in terms of control. Citizens are only subject to laws of the home country, and there isn’t any other country that has influences, which prove otherwise. After Bangladesh’s independence, the country has been completely following their own sets of laws and standards without any outside party’s influences.
11 Protection of Domestic Enterprises – 3.5
In this category Bangladesh scores 3.5, because the protection from foreign competition with domestic enterprises is very minimal in Bangladesh. Due to the recent growth in the Garment and textile industry there has been a massive influx in foreign companies coming into Bangladesh for business. Though all the new business if great for the companies’ economical growth, it isn’t that great for domestic enterprises because all the new business seem to take over. The score of 3.5 stands, due to the fact that there hasn’t been any major change in tariffs, quotas, or other restrictions limiting the competition that these foreign companies pose.
12 Foreign Currency transactions – 5.0
In this category Bangladesh scores 5.0 due to the fact that the country accepts all foreign currencies, and then converts them to the domestic national currency known as “taka”. This creates a single currency and enables the government’s fiscal and monetary policies to be effective throughout the country.
13 Border Control – 3.0
Bangladesh receives a score of 3.0, in this category because the country’s borders are enforced and regulated at all times through the national border patrol agency, but still there are loopholes that allow for drugs to enter the country as well. Yet there is still a great aspect of corruption in this area also. Regularly there is many Bangladeshi’s that cross the Bangladesh border into India, while a lot of illegal goods are also brought into the country of Bangladesh from India. Due to the minimal inspections on many things entering the country the score of 3.0 is sufficient for this category.
14 Currency – 5.0
In Bangladesh the only official currency used is known as “taka.” This allows for great commerce within the country. Due to this the country receives a score of 5.0 in this category. Also all foreign currencies are converted to “taka” once they enter the country as well allowing for a stable economical climate.
15 Cultural, language, homogeneity – 4.0
In this category Bangladesh scores 4.0 because the culture, language, and homogeneity is all the same and followed by 99% of the population. But there are minority groups, yet they’re very small. The main language spoken in Bangladesh is Bengali, and the primary religion is Islam. This allows the economy and wealth creation of the nation to continue, due to the majority of the population following the same culture, language, and homogeneity.
16 Political Effectiveness – 2.0
In this category Bangladesh scores only 2.0 due to the fact that there is very little governmental intervention in improving major issues such as resolving problems that need to be taken care of. One of the major sectors that need to be looked at, is corruption. Throughout the country the massive influx of corruption has allowed for a decline in political effectiveness. Also the deadly and violent political protests known as “Hartals” have led to many innocent civilian deaths. With no positive government intervention in resolving problems, which arise in the major city as well as rural areas, leads to the score of 2.0 being sufficient for this category.
17 Institutional Stability – 3.0
In this category Bangladesh scores 3.0 due to the fact the government systems are very conflicting. The two major parties known as Awami League and BNP, are always conflicting. Once one party comes into office they try and hold office for as long as they can, then once its time for elections there is a great movement of violence and political protests. This causes major instability throughout the country.
18 Honest Government – 1.0
In this category Bangladesh, scores at a very low 1.0 due to the fact that there really isn’t an honest government throughout the country. With the massive growth in corruption, there isn’t much change-taking place in improving the country. Today Bangladesh is one of the poorest countries in the world, yet if the rich paid the correct taxes then there wouldn’t of been such poverty as there is currently. Today there isn’t much to be found in leaders who are preventing corruption in Bangladesh. The bare truth is that a lot of political leaders today are profiting beyond their needs through the corruption in the government.
19 Common Laws – 3.5
Bangladesh scores at 3.5 in this category because there is a set of universal non-conflicting laws for the entire country. These laws are uniform in all parts of the country and for all parts of the population. Bangladesh has one of the great income inequities in the whole country and that inequity doesn’t favor the poor. Though the poor are being mistreated greatly all the time, the rich can always have a way of getting away with major crimes with the use of bribes and money. Common laws are evident throughout the country, but these laws aren’t always implemented against the rich. The enforcement of these laws are minimal in many cases, which leads to a score of only 3.5
20 Central Bank – 5.0
In this category Bangladesh scores 4.5 due to the fact the central bank allocates the expenses and needs for the country in the long run. The central Bank in Bangladesh also known as “Bangladesh Bank.” The banks function includes price stability through economic and monetary policy measures, managing the country’s foreign exchange and gold reserve and regulating the banking sector of the country. Bangladesh Bank is also independent of political control so that is what allows for the score of 5.0.
21 Domestic Budget management – 4.4
In this category Bangladesh receives a score of 4.4 because of the great allocation of government funds in the right areas and criteria’s needed. In the budget brief of 2013-2014 foreign loans were at 6.5%, foreign grants were at 2.9%, domestic financing was at 15.3%, and non-tax revenue was at 11.8%. Also the current GDP grown is at 6.7% while GDP per capita is at $1,044. Through a quite balanced budget overall the score of 4.4 is sufficient.
22 Government debt– 4.0
In this category Bangladesh receives a score of 4.0 due to the fact that the country is ranked at 99 on the list of national debt by country according to the (IMF) International Monetary Fund. The national debt percentage at only 33.9% the country GDP is actually not doing so bad compared to other countries such as Japan who are ranked at 1 on the list with their national debt percentage at 229.8%. Due to the national debt of the country being so low, the score of 4.0 is sufficient for this category.
23 Economic Statistics – 3.5
In this category Bangladesh scores 3.5, due to the fact that though there are a lot of statistics on the economics in the country, a lot of that information isn’t completely accurate. With an increase in corruption many factors of income and government expenditures aren’t all reported. With factors such as these that question the accuracy of information, the score of 3.5 is adequate for this section.
24 Protection of public health and safety – 0.5
In this category Bangladesh scores only 0.5 due to the lack of health and safety regulations in the country. Also waste management, and food inspections are great concerns that aren’t taken care of. A very regular sight anyone may see while in Bangladesh is the sight of garbage dumps right inside the city and sewer drains that run throughout the city on the side of the roads. These sewer lines are usually open and lead to the growth of malaria-ridden mosquitos. Also there aren’t any real food inspections in the country or safety regulations for creating new buildings. Recently due to the lack of safety regulations a garment building in Bangladesh collapsed killing over 1,000 innocent workers inside. Moreover Bangladesh is a country that has the highest infant mortality rate. With all these factors in play the score of 0.5 is sufficient in this category.
25 High Wage Policy – 1.0
Bangladesh is one of the poorest countries in the world, and this due mainly to the great income gap between the rich and the poor ad also the fact that Bangladesh has one of the cheapest labor costs in the world. Recently government mandate has increased the minimum wage but it still stands realistically around $36 a month for thousands of individuals. With such low minimum wages, workers are barely able to afford necessities such as food, water. Due to the wage policy of the country being so low, the score of 1.0 is sufficient.
26 Environmental Protection – 3.5
Due to the depleting natural environment in Bangladesh, this category scores at only 3.5. Yet after the 1995 “Bangladesh environmental protection act” was passed there have been many changes to preserve the country’s natural environment. Thought the act has been taken into consideration and implemented in many ways, there could still be more action taken which right now isn’t being done.
27 Strong Army – 3.0
The Bangladesh armed forces consists of three groups, being the army, air force, and navy. Bangladesh receives a score of 3.0 in this category due to the fact that the army isn’t anywhere near to as powerful as any of the other army’s of the nearby countries. Having only a budge ot $1.91 Billion and a GDP percentage of 1.5% as of 2012-2014, the armed forces haven’t been able to stretching their battalion to the best of the country’s ability. Due to the inadequacy in military power compared to the amount of people in the nation, the score of 3.0 in this category stands sufficient.
28 Foreign Trade impact – 4.0
In this category Bangladesh scores at 4.0 because of the great foreign trade policy that Bangladesh implements. Countries that Bangladesh does majority of its principal exports to are is the United States, Germany, United Kingdom, and Australia. Countries that Bangladesh does much of its principal imports with are China, India, Malaysia, and Australia. Altogether Foreign trade in terms of imports and exports are around 25% of the countries GDP resulting in the sufficient score of 4.0 in this category.
29 Management of foreign currency budget – 3.0
In this category Bangladesh receives a score of 3.0 due to the surplus in foreign currency within the central bank system. As of December 2013, foreign exchange reserves had reached an all time high of 1,395.18 BDT Billion. As in terms of Net Capital Transfers Bangladesh isn’t well balanced out so the score of 3.0 in this category is sufficient. The inadequacy of balancing payments for goods, services, and real capital transfers nowhere near zero is what resulted in this score.
30. Layers of collective action 3.0
Bangladesh is rated at 3.0 in this category because there are numerous non-government private organizations that are there for the well being of its citizens. But in order for any changes to take place in the government system, the representatives must go to the main city to make any changes. In Bangladesh there are many School Bards, City councils, and volunteer groups which are there for the countries well being. Yet these organizations don’t have the power to make any type of changes without government approval from the main city Dhaka. A popular and well-known organization is “Care Bangladesh Private Sector Engagement – PSE” which helps struggling workers find financial well-beings, and they’ve made great achievements in doing so, yet still they don’t have any power to go beyond their volunteering efforts. All changes must be maid through the Central Government system, which is in the Main city Dhaka.
31- Pro Business Climate 4.5
In this Category Bangladesh scores a 4.5, because the development and growth of businesses to enter into Bangladesh from Western countries is highly accepted by major business groups. The introduction to new businesses is great for economical growth in the country and helps stabilize labor and work for the citizens. In the past few years the rapid growth of the Garment industry is a great example of how new businesses along with cooperate business from Western countries entering Bangladesh has led to a rapid growth in jobs in the country. Bangladesh is a country that is open to new growth and society values on business is high because it leads to job growth and employment.
32 - Government enterprises 3.0
Bangladesh is a country that spends a major share of its budget providing direct subsides for energy such as fossil fuels, and electricity. Over the past ten years the expenditures have been escalating rapidly. The government reports spending of (US $944 million) in expenditures on energy subsidies, but that number is said to be even higher according to the Bangladesh institute of development studies at about a staggering (US $1.7 Billion). The government subsidizes many developments such as “Roads and Highways.” This sector is a great example of how government subsidized sectors can take away all the business in one category. When a project is taken into view such as building a new bridge. The “Roads and Highways” sector of the government subsidizes one of their developers for the project. That one developer then makes all the profits. Similar to this there are other subsidized developers that are from the government that also do the same. With regards to these aspects, this category of government enterprises scores at a 3.0 because there is very little room for private business to make a profit when going up against government subsidized developers.
33 - International Security Agreements 3.0
Bangladesh is scored at 3.0 in this category because the Bangladesh goes off a different type of military policy. Bangladesh pursues a moderate foreign policy that places a much heavy reliance on multinational diplomacy especially with the United Nations and the World Trade Organization. Being a member of the Non-Aligned Movement, Bangladesh has decided not to take sides with any major powers since the cold war. Since the independence of Bangladesh from 1971, one fundamental aspect that differs Bangladesh in terms of international security agreements is the principal of what they go by, which is “friendship towards all, malice towards none” in dictating its diplomacy. During the Liberation war of 1971 India provided great extensive training and aid to Bangladesh nationalist Mukti Bahini Guerilla force that was fighting the Pakistani Army for Bangladesh’s independence. Moreover India’s role in independence of Bangladesh led to the development of strong bilateral relations. The treaty of the two countries Bangladesh and India has expired in 1997 and never been renewed. As of today Bangladesh doesn’t have any major military ties with any of the superpowers which is the reasoning behind the score of 3.0 in this category.
34 - Protection of domestic enterprises from government mandated costs 4.0
Bangladesh in this category would be given a score of 4.0 because there are some precautions imposed through sectors such as garment production, textile, and agriculture but in terms of domestic enterprises from government mandate cost there are very few imposed. There is a Ministry of Commerce in Bangladesh, which has different sectors in charge of various compliances. The Administrative Wing is a sector that plays a key role in terms of budget formulation of the ministry adjusting mandates for different circumstances. Recently Bangladesh has mandated a new minimum wage of $68.00 per month for millions of garment workers, which is a 77% increase over previous minimum wage itself that was not enforced. In terms of a business aspect this mandate may seem very alarming but it’s geared towards helping out economical growth and is still at a rate at which it doesn’t harm domestic enterprises from. Through there are inspections done from the Administrative wing sector, the numbers can be regarded as insufficient for the inspection due to the fact the inspections that can be done with the number of people being only limited to the 10% of the total workforce being 76 Million people.
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