Development sustainable how long amid corruption and lack of democracy?

Once it was said rules and regulations are not so important at the primary stage of development. The state does not care about the method of accumulating capital. Investment cannot be made unless huge capital is accrued and so let the capital be accumulated first. The rules and regulations can be abided by later. It is also said there will be corruption, waste and laundering. There will also be a lack of good governance. If the private sector grows significantly and potentially, everything will fall into shape in accordance with their demands. They will require good governance, corruption-free performance and the rule of law. Many issues of the state will change in the interest of the economy. But this has not been true in the Bangladesh context.

Nothing works without bribes here. There is no tangible improvement in the environment for doing business. It is difficult to get legal remedy. The type of the government is authoritative. Bangladesh is lagging behind all types of global indices related to the good governance. Despite all this, the development of Bangladesh is a role model to the entire world. If the coronavirus would not have broken out, the Gross Domestic Product (GDP) had been over 8 per cent, which was unimaginable about one and half decades ago. What is the mystery of this high growth of economy despite high corruption and no improvement in governance?

Professor Shanta Devarajan teaches the Practice of Development at Georgetown University. He had been acting lead economist at the World Bank. He worked in Bangladesh too and visited frequently. He recently wrote an article on Bangladesh and Sudan. The main factor was the progress of these two countries despite all odds. He mainly wrote about the mystery of Bangladesh's economic development.

One thing circulated about Bangladesh at the global stage is the 'Bangladesh Paradox.' This means that the way the mismanagement and corruption has spread in Bangladesh, the country is supposed to not make any progress. Still the country is doing so. This contradiction is being called 'Bangladesh Paradox'.

Shanta Devarajan in his article wrote about five types of paradoxes. 1. Growth amid corruption. 2. Getting good results in human development despite comparatively little role of the government. 3. One of the characteristics of Bangladesh industrial policies is not rule or policy, rather deals are the main factor and that under influential people. 4. Bangladesh's tax and GDP ratio is very little, only 9 per cent. With so little income, macro economy remains stable. 5. Huge default loan in the Bangladesh banking sector and various types of fragility. Bangladesh is successful in the micro credit sector.

How did Bangladesh make progress despite that? Shanta Devarajan thinks there is relation between the history of the country and the geographical situation. Bangladesh is mainly a densely populated country. People are of the same ilk. As a result, any type of concept or idea and innovation spreads fast. For example, the entire country quickly adopted the concept of family planning after a few number of NGOs started to introduce people with the birth control methods in the seventies. Same thing happened when Muhammad Yunus introduced the micro credit. Again when the government launched bonded warehouse facilities, the entrepreneurs got the opportunity to import raw materials and to export garments. The garment industries have grown in a sustainable manner. The government has been able to keep the macro economy stable despite less revenue collection. Bangladesh always abide by the programmes of International Monetary Fund (IMF).

Shanta Devarajan concludes it is generally considered that a government will mainly play the role as an assistant. It will disburse loans, create jobs and work on health and education. But such did not happen in case of Bangladesh. Rather it is seen a country can make progress if the private sector can deliver these services as Bangladesh has done. Shanta Devarajan is considering the development of Bangladesh as an excellent model rather than a paradox.

Shanta Devarajan is not the first person to say so. There is much research and many articles about this. The basic perception is that an effective bribe system has grown in Bangladesh to run business and trade. Things work if bribes are paid. Entrepreneurs have calculated bribes as part of the production costs. So a reliable transaction system has emerged here to get the work done in exchange of bribes. The production costs have increased, the consumers have to spend additional money, the funds go to the economy and growth happens.

However, the discussion does not end here. How far is such high corruption and high growth sustainable? How long can this continue? Yale University's South Asian Studies council's visiting fellow Harry W Blair is working on this question. His article is titled 'The Bangladesh Paradox' published in Journal of Democracy from the press of Johns Hopkins University. He, however, analysed it from the political science point of view, not from economics point of view. Bangladesh is in his observation for long. In Economic and Political Weekly published from New Delhi 50 years ago (25 March 1971) he wrote, "Sheikh Mujib and Deja Vu in East Bengal: The tragedies of 25 March."

In the beginning of the new article, he wrote, "In the five decades of Bangladesh history, this is such an independent country where development is happening without democracy. It is not that Bangladesh is the lone example. China, Vietnam, South Korea and Taiwan have made progress without democracy. Of these, Taiwan and Korea moved towards democracy and development also continues."

Political scientists have given these countries a new name-a competitive authoritarian country. Harvard University professor Steven Levitsky conducts research on the authoritarianism. According to his definition, although elections are regularly held and are generally free of massive fraud, incumbents routinely abuse state resources, deny the opposition adequate media coverage, harass opposition candidates and their supporters, and in some cases manipulate electoral results. Journalists, opposition politicians, and other government critics may be spied on, threatened, harassed, or arrested. Members of the opposition may be jailed, exiled, or—less frequently—even assaulted or murdered. Regimes characterised by such abuses cannot be called democratic.

Harry Blair places Bangladesh in this category. However, his question is, will Bangladesh be able to continue this development under such circumstances? He wrote different decisions are independently taken for development in Bangladesh. The government can take any decision and implement it due to surveillance over the media, lack of accountability everywhere and absolute centralised system. Although development takes place in such a circumstance, it is not possible to maintain it in the long run. Rather, the situation deteriorates gradually. Under such a system, corruption must rise. There is a lack of transparency in the way the Anti-Corruption Commission has been formed. So there is no way to tackle corruption. Simultaneously, the powerful people will become more powerful to ensure their own interests.

On the flip side, in absence of powerful media and civil society, bad policies of the government will go unnoticed and will not be amended. In all, problems will become acute gradually and cannot be concealed. The question Harry Blair asked was whether the government would be more authoritative or whether it would opt for liberal democracy if such a situation was created. Would the government remain in the 'Bangladesh Paradox'?

*This article, originally published in Prothom Alo print and online edition, has been rewritten in English by Rabiul Islam.