Bangladesh’s credit rating

Editorial April 09, 2010

On Tuesday, it was announced that Standard & Poor’s, one of the three major credit rating agencies in the world would begin covering Bangladesh in its periodic ratings assessments.

Unto itself, this story would have been only of mild interest to most business readers in Pakistan, but what made it extraordinary was the fact that Bangladesh, a country that has half the average national income as Pakistan, has a credit rating of BB-, a full rating above Pakistan’s own miserable B-.Of the four countries in South Asia rated by Standard & Poor’s, Pakistan has the lowest credit rating, reflective in large part of the country’s inability to collect taxes.

Pakistanis tend to care a lot about how the rest of the world perceives the nation, yet the fact that the “full faith and credit” of the government of Pakistan is quite literally deemed to be worth “junk” by the international bond markets does not seem to be enough to jolt people out of evading their taxes.

The example of Bangladesh is quite evident in suggesting that it is not a matter of income levels that result in better governance in a country, but rather a clear commitment by both the government and the people to improving the economic welfare of the nation as a whole. Yet we as a nation refuse to take responsibility for anything. Indeed, when discussing any problem confronting the nation, many are likely to use the second person (“your country”, rather than “our country”) as a means of deflecting responsibility.

We would like to congratulate the people and government of Bangladesh for what appears to be a reasonable credit rating and hope that it serves as a motivator for the people and government of our country to get our collective act together. The Federal Board of Revenue has made a start by finally acknowledging the rather obvious tactics used in evading taxes.


Meekal Ahmed | 13 years ago | Reply Bangladesh is a very poor country but I have always had the sense that it runs it economy reasonably well. For sure it does not go off running to the IMF every three years for exceptional financing and a bail-out.
Faisal Qureshi | 13 years ago | Reply To improve Pakisldtan's credit ratings following model should immediately be considered by Finance authorities: Welfare-state model should be adopted.... I agree that the government is facing huge economic and financial crisis, but the fact remain that state organs can play effective role in socio-economic development. Previously, major sector concentrations were focused on service industry, Money Market and real estate...good, state can generate revenues from it... but the manufacturing sector was ignored which resulted in unemployment, dis-investment rather investment-drain to Bangladesh, China and Nigeria, Kenya, South Africa etc. In money markets and real estate the facts stands that the bullish trends attracts foreign investors to liquidate the market for a very short term and gain good margins and finally drains the entire funds out, which affects our stock markets as well. ... See More Initially, an economic model should be designed to stop investment-drain from Pakistan, by providing not lucrative and capitalist oriented packages but a model which carry the equilibrium in acquiring foreign trade orders, cost-effective power tariff for industries, employment utilization, on-the-job trainings and internships by industries to students and local unskilled class, local level socio-economic growth contribution by industries, etc. Revenue collection should be at regressive mode rather present progressive mode which lasts nothing but tax evasion. This can only be done by state organs not by individual masses. World Bank, IMF, ABD and other syndicate debts can be retired by proper adaptation of economic models not by mere rhetoric. When the masses will have the economic strength and the price equilibrium; rest of the socio-political issues and crime will demise at own
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