Our policies are conducive to corruption

According to a survey run by Asia Foundation and BIGD, the people feel that the economy is going in the wrong direction. What would you say about this perception of the people?

It is not possible on the part of the public to know how the macro economy is running. But on a personal level, they understand very well how the economy is running. When you go to the market, you understand the state of income and expenditure and the level of inflation. So when 70 per cent of the people say that the economy is going in the wrong direction, that is reflected in real statistics.

The survey indicates why the people have this perception. But there is another angle to this and this is whether there is any objective or desire to fix the situation. The people see a lack of will here. In recent times there was a global inflation context that was perhaps relevant a year ago, but not at the moment. In many places of the world, inflation has fallen in the countries which had faced this crisis. But not in Bangladesh. Why not? The response to this being given by the people has political connotations. They feel that simply having the wish is not enough, there is work to be done. Effective measures must be taken to keep the market in control. Action has to be taken against the interests of certain quarters. But at present we see that crony interests and the government’s policy making circles have merged as one.

How do you view this, as an economist?

There are three levels of economy, like macro economy, mid level economy and personal economy. We have discussed the last one. In the case of macro economy, the financial sector is particularly in a risky state, according to the figures. The value of the taka has dropped, a dollar crisis has evolved, and imports have had to be reduced. Our growth is now being questioned. Reserves have fallen and the burden of loan repayment has increased. At the mid level economy, unemployment of educated youth has taken on massive proportions. If you look at employment, it looks extremely puzzling. The labour survey of 2016 and 2022 indicates that employment in the industries and service sector has decreased. It has increased in the agricultural sector. We have to see what is actually happening when it comes to growth, where it is happening.

Business is in a recession here and private investments have fallen. Then again, there has been a lot of growth, but who is reaping the benefits? Over all, Bangladesh is in a serious crisis of economic security.

The survey also mentioned the authority of one party. Does the rule of just one party have an impact on a country’s economy?

The equation between authoritarian politics and economy is not one dimensional. It can be different in different countries. But what is happening in our country? The direct result of authoritarian politics is priority given to crony interests and that resulting in the inflation not decreasing. Over here, the authority of one party has been established and public interests are not being taken into consideration. Why is there such disorder in the financial sector, the banking sector? Why are non-performing loans in this condition? The matters pertaining to the ownership or board of directors of the banks are directly linked to politics. How far does Bangladesh Bank play an effective role in running the economy? Just as people’s everyday lives are in a big crisis, so is Bangladesh’s economic advancement being harmed.

How far is a one party rule linked to the dire state of the economy or corruption?

There certainly is a link. Policies are formulated here for the sake of corruption. The bank laws give priority to crony interests. Another thing is, while it is undeniable that our country needs infrastructure, over the last decade we see extremely high and irresponsible public expenditure on mega projects and infrastructure. This expenditure is dependent on credit and the interest rates are high. Such projects have become huge areas of corruption.

There is a lot of infrastructure which have been selected and implemented in a hurry. The Chattogram-Cox’s Bazar railway line is an example. Random expenditure was done in the name of feasibility studies and monitoring. No heed was paid to priority of projects. In the past when we heard of corruption, we would imagine some money being surreptitiously set aside. But now the very policies are being formulated for the sake of corruption.

Many credit sources have emerged in the world now where the lender asks no questions about how the money is being spent. They couldn’t be bothered about that. As a result, a 10 taka project is being implemented at a cost of 1000 taka. Money is certainly being split here. But we will have to repay this loan in the future. Also, who are being selected to implement the projects? We had imagined e-tenders would make a big difference. But time and again certain names crop up. Here too crony interests are being upheld.

Pressure is being mounted by the West about the crisis of democracy in politics, human rights, corruption and such. Bangladesh’s trade and economic interests depend largely on the West. They have attached conditions to many areas. Will this have an impact on our economy?

It must be seen whether this pressure tallies with the people’s demands. It is noted that there is a reflection of the people’s demands here. Now before looking at what problems may be caused as a result of  this pressure, we need to first ask why we are not giving importance to the people’s needs in resolving the problems. We must look for the answer of why we are not paying attention to the people’s needs. The economy is linked to democracy, human rights and such issues where the western countries are putting pressure.

More importantly, there is need for political reforms to bring the economy back on track. Why aren’t we carrying out those reforms? I feel that these reforms are not only essential for democracy, but for the sake of the economy too.

Economics is controlled by politics. How is Bangladesh performing here? There are allegations that the policymakers don’t even discuss the economy. The stakeholders can’t even contact them if they want to.

 Perhaps the policies are being formulated elsewhere and that is why they are not visibly active in this regard. There is need to look into how an authoritarian rule is being conducted here. This has gone to extreme centralisation there. In other words, everything runs at the behest of a handful of individuals. Those who are ostensibly in responsible positions, such as the finance minister, the finance secretary, the Bangladesh Bank governor, should not just deliberate and discuss among themselves, but discuss and deliberate matters with all forums within and outside the state. It is unfortunate that there is an absence of any representative voice in the forums. Leadership in the economic and business forums is being selected in the basis of understanding. Institutions in all areas that can have effective discussions, are becoming defunct. The gloss and glamour of the institutions and forums are increasing, but they are losing relevance when it comes to formulating policies. There is a marked lack of desire to stand up against narrow personal interests in running the economy because such authoritarian rule and cronyism has merged to a great extent. Naturally the beneficiaries of such a rule are all wearing rose-tinted glasses. They see quite a different world through these rose-tinted glasses. The people of the entire Bangladesh are seeing one reality and those with the rose-tinted glasses are seeing a different reality where everything is hunky-dory, where there are no beggars, no one has any problem, the cities are becoming comparable to the other developed cities of the world. If the country is to be brought on the right economic track, the most important political task is to take off these tinted glasses.

We hear narratives that democracy can be curbed to an extent for the sake of development continuity and so on. What do you think of such theories?

Rather than going into the hypothetical discussion on whether the continuity of those in power are indispensable for development, we can look at the matter statistically. If we take Bangladesh’s economic indicators into consideration, we will see there has been a continuity of development under all governments. Over the last one decade, the link between growth and poverty alleviation has grown weak, unemployment and corruption has increased, but that is another matter. The continuity of those in power is not essential at all, not even an important issue at all, when it comes to food production, poverty alleviation, social safety net programmes, the growth of steady development and all this that has taken place over the history of the past 52 years. The main issue is whether or not there is the existence of a competitive economy here. And whether there is the existence of competitive politics to ensure that.

The main force behind this advance of Bangladesh is the people, that is, the women, the men, the farmers, workers, entrepreneurs, everyone. The narrative that there needs to be continuity of those in power for the sake of development, is a narrative spun in the interests of those at the helm and is not congruent with economic reality.

There are the elections up ahead, but an extreme state of uncertainty prevails over the elections. There are apprehensions of conflict and violence. The last financial year was considered to be the worst financial year. Does our economy have the capacity to withstand the pressure of this political unrest?

Forging ahead through natural or political upheavals or tackling disasters is a characteristic of Bangladesh’s history. But given the poor state of last fiscal and the matter of debt repayment looming large ahead, the crisis in the coming days will worsen. USAID’s report says that we will have to import around one million tonnes of rice. Over the past 50 years, food production had been the key safeguard of Bangladesh’s advancement. Despite all odds, our food production had remained steadfast. Now questions are arising even in this area.

At the same time, political circumstances are emerging where the value of the people’s votes has decreased, actually fallen to zero. Massive uncertainty has been created over an environment conducive to a competitive, free and credible election. On one side Bangladesh is entering into economic uncertainty, and on the other side the people’s aspirations and needs are being crushed underfoot. There is no other way to overcome this situation other than through a political renewal.

This political renewal must take place in order to overcome an economic downfall, and for the sake of democracy too. This political renewal can come through the hands of those in power too, but they will have to first remove their rose-tinted glasses or discard their governance model, go against a section within themselves and take measures accordingly. This matter of political renewal must be brought to the discussion table. It is being discussed, but it needs to be discussed more vehemently.

A large section of local and international quarters see the ongoing case against Dr Yunus as a deliberate harassment by the government. What do you say?

I will say two things here. One is that no one is above the law. The rule of law is one of the most important pillars of a modern state, and we all accept and acknowledge this. The other thing is, the use of the state or judicial procedure with the intention of harassment. This is contrary to citizens’ rights. In the case of Dr Yunus, there is a smokescreen in place, a sort of suspicion or mistrust has been generated. The question is, how far the intention to harass him through the case has been effective.

Dr Yunus is the pioneer of microcredit. Innumerable people in Bangladesh and the world over have benefitted from this. This programme is being vigoursly implemented in Bangladesh at a government and non-government level. But still, a negative propaganda is being steadily run against this. That is where we perceive the intention of harassment. If we look at how the labour welfare fund is being implemented around the country, we will understand that this person has been absolutely selectively targeted. Is there any motive behind the case against this one individual?

Bangladesh has advanced with the proper application of our collective talents. We see a shrinking of our social sector, the non-government sector. All sorts of rules and regulations are being drawn up, constricting their ability to work freely with their innovative strength. All this is going against Bangladesh journey ahead. I would say, everyone should be duly evaluated and the ruling powers and all political parties should move ahead along with all these elements.           

Thank you.

Thank you too.