Escalating costs of development projects at an irrational proportion indicate a new reality of ‘legal corruption’ in today’s Bangladesh, says economist Hossain Zillur Rahman.
He thinks a collapse of the banking governance and the resurrection of the ‘licence raj’ as a new ‘permission raj’ is severely inhibiting growth-accelerating private investment.
In an exclusive interview with Prothom Alo recently, the former adviser to the caretaker government observed that certain unaccountable power has marginalised not only the general electorate but also business and the civil society bodies.
“Bangladesh needs to completely reverse its slide towards institutionalised corruption and crony capitalism that has cast a large shadow over the private investment climate,” he said.
Now, executive chairman of the Power and Participation Research Centre (PPRC), Hossain Zillur regretted the exponential spread of a VIP culture at the cost of everyday democratic rights of the common citizen whether on the road or in the office or in other spheres of social and institutional life.
The researcher further lamented at the low-quality education for the majority of the population and said the crisis of quality is being caused by a near-collapse of education governance - question leak, political managing committees, over-bureaucratic control of ministry.
“On current trends, it is difficult to be optimistic about the political economy in the coming years,” he said adding, “The ruling group not only appears intent on holding onto power through ‘controlled’ elections but is complacent in its own ‘development narrative’ disregarding the aspirations of common citizens.”
Here is the full text of the interview:
Prothom Alo: What do you think are the development needs of Bangladesh today?
Hossain Zillur Rahman: Bangladesh economy has attained a commendable degree of resilience over the last four plus decades but it today has four outstanding development needs:
First, Bangladesh needs to urgently find new growth drivers beyond RMG and remittance and transform them into strategic priorities;
Secondly, Bangladesh needs a radical overhaul of the education system moving away from low-quality universal education to a well-governed system focused on quality and skills with particular attention to high-quality secondary education;
Thirdly, Bangladesh needs to completely reverse its slide towards institutionalised corruption and crony capitalism that has cast a large shadow over the private investment climate. Irrational project costs are pointing to a new reality of ‘legal corruption’ while collapse of banking governance and the resurrection of the licence raj as a new ‘permission raj’ is severely inhibiting growth-accelerating private investment.
Fourthly, Bangladesh needs a coherent and politically serious urban strategy if the benefits of urbanisation are to be swamped by the spectre of congestion and unliveable cities.
Prothom Alo: How would you define the major challenges facing the country?
Hossain Zillur Rahman: The challenges facing Bangladesh today are qualitatively different from the challenges Bangladesh faced at birth. These critical challenges are both political and economic.
There are three outstanding political challenges:
There has been a systematic erosion of accountability within the political system due to a crisis of legitimacy affecting the electoral system and unprecedented dominance of the executive over the legislature and the judiciary. The spectre of unaccountable power has even marginalised not only the general electorate but also business and civil society bodies.
The second political challenge is the systemic devaluation of merit in favour of partisanship and sycophancy with the most conspicuous impact being on weakened state capacity to address and pursue the sovereign interests of the country.
The third political challenge is the exponential spread of a VIP culture at the cost of everyday democratic rights of the common citizen whether on the road or in the office or in other spheres of social and institutional life.
The political challenges are compounded by an emerging crisis of the prevailing growth model characterised by a growing employment crisis where inadequate and mainly low-quality employment is being generated. Latest poverty data is also showing that the poverty reduction rate of growth has also declined.
Prothom Alo: Who, according to you, are the key drivers of Bangladesh’s development and how far has the country benefitted from demographic dividends? Could you please elaborate?
Hossain Zillur Rahman: Bangladesh is failing to reap the full potential of its demographic dividend due to several major reasons. There is a massive quality divide in the education system whereby islands of quality are surrounded by an ocean of low-quality education for the majority of the population. The crisis of quality is being caused by a near-collapse of education governance - question leak, political managing committees, over-bureaucratic control of ministry. The critical gap is in secondary education which prepares the youth for entry into economic activities. Bangladesh needs a radical overhaul of how it finances education moving away from the MPO system towards direct public investment in new quality secondary schools. Despite many projects, quality skill education is also not reaching the required scale to reap demographic dividends. There is a virtual epidemic of low-quality BBAs which is not equipping the youth compete in the quality job market. Ironically, a large chunk of quality employment is being availed by persons from neighbouring countries rather than from Bangladesh who are taking remittance out of the country to the tune of at least 5 billion dollars a year.
Prothom Alo: In view of the state of education, the financial sector, state institutions, investment scenario and overall governance, what do you believe are the potential solutions?
Hossain Zillur Rahman: The idea of ‘solutions’ has to be thought at two levels: ‘big ticket’ solutions which can impact on the overall macro scenario and take Bangladesh to the next stage of growth at 8-10% and ‘small ticket’ solutions which can contribute to incremental but still important sectoral solutions.
The ‘big ticket’ solution is all about critical changes in political governance. This requires three essential reforms: credible election, restoration of merit in state institutions and reforms in economic governance including a re-orientation of growth strategy towards new growth drivers and away from vanity ‘mega projects’.
There are three priority ‘small ticket’ sectoral solutions: i) at least 300 fully-funded quality new public secondary schools ii) comprehensive Healthy Bangladesh initiative focused on healthcare, nutrition and urban sanitation and iii) re-thinking agriculture as a new growth driver.
Prothom Alo: What would ‘middle income country’ status mean in a political system devoid of pluralist democratic exercise and participatory elections? How optimistic or pessimistic are you about functional political economy in the coming years?
Hossain Zillur Rahman: There is a radical divergence between the complacent understanding of ‘middle income country’ by the ruling political elite and what the common citizens are visualising their middle income aspirations. For the common citizens, ‘middle income status’ is not narrowly about growth rate but about three combined aspirations: Income + Dignity + Security.
Over-preoccupation with narrow growth statistics is obscuring the stark gaps in ‘lived realities’ - income disparities, dietary inadequacies, crisis of productive employment, and critical gaps in essential services such as public transportation.
On current trends, it is difficult to be optimistic about the political economy in the coming years. The ruling group not only appears intent on holding onto power through ‘controlled’ elections but is complacent in its own ‘development narrative’ disregarding the aspirations of common citizens. However, Bangladesh society has shown great resilience throughout its nearly five decades of turbulent history. This resilience provides a basis for cautious optimism on the way ahead. Three action agenda is suggested: i) a civic initiative focused on democratising the ‘middle income’ discourse ii) forging coalitions to move ahead on the small-ticket sectoral priorities and iii) consolidation of a civic pressure group on national reconciliation.