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Bangladesh in transition

A year or so ago Bangladesh was a booming economy, relatively speaking. The stock market was up-way, way up. The country’s reliance on raw jute, jute products and tea had been replaced by a burgeoning garment industry, diversification was taking place across the broad spectrum of the body economic. By drawing a fairly large segment of the female population into productivity, additionally was very apparent in economic activity, the concept of the Grameen Bank being successful beyond its own expectations. With the induction of the Hasina Wajed Government, the electoral freeze that had paralyzed governance had given way to hope for political peace, at least for some time. Since the Awami League (AL) Government certainly has better relations with neighbour India than the Ershad and Khalida Zia regimes that preceded her, one assumed that a marked change in foreign policy would take place (and that expectation seems to have become a fact of life), at least as much as the population of Bangladesh, anti-Indian at the best of times, will permit any of their governments to do so. On the other hand, the much-publicized sop given by the Indian Government, the release of extra waters from the Farakha Barrage, has actually resulted in less-waters than previously available to the parched northern districts of Bangladesh. Though the borders are not as aflame as they were when India was actively supporting the “Shanti Bahini” movement in the Chittagong Hill Tracts, the Bangladesh Army still does not show any real signs of rolling over and playing dead as much as their immediate neighbour would like them to do so.

Why is then Bangladesh now facing an extremely serious economic crisis? Why has the bottom of the share market fallen out of the sky, from Taka 20000 plus for a Taka 100 share to less than par value in many cases? Why are scores of industries shutting down and unemployment again on the rise? Why have the foreign exchange resources dipped so sharply? Unfortunately the answer to all these questions does not lie in Bangladesh but in industrial powerhouse India, which taking advantage of the South Asia Free Trade Agreement (SAFTA) has flooded Bangladesh with cheaper Indian goods. From a nation waking upto industrialization, Bangladesh is going rapidly back to being only a market for consumer goods. While traders are making money, factories are closing down in large numbers being uneconomical to run and consequently jobs are being lost instead of being created. This has created a negative economic cycle, one that could well again make Bangladesh an international basket case. For those of our businessmen who are over-enthusiastic about trade with India, this experience should arouse some dormant, patriotic, if not commercial feelings

Hasina Wajed’s AL is not totally to blame. As a government it has functioned reasonably well but it did rely on Indian support to come to power and has tended to toe the Indian line, particularly the Gujral Doctrine for the regional grouping of India’s eastern states with Bangladesh, Nepal and Bhutan (and maybe Burma, but most probably not). With a population second only to China, India has vast economic potential in western eyes which is not averse to propping up India for an economic and political containment to China. However there is a major difference between India and China, both politically and economically. China did not progress economically at the cost of the countries adjacent to it but has maintained a pragmatic partnership with them, India seems to think that it cannot reach economic Valhalla without economic and political subjugation of the countries on its borders. Hegemony is a word synonymous with Indian ambitions. Free of the necessity of economic domination, China has never tried to overly influence the course of political event in its neighbouring countries. In India’s case, almost all the SAARC countries except Pakistan and to some extent Sri Lanka, increasingly seem to respond to Indian tutelage. One may hasten to add that while Bangladesh may very recently enjoy the best of relations with India, it is not yet politically dominated by India, in fact no Bangladesh government which does so will last very long, if the people do not get them, it is a fair bet that the Army will.

Part of Bangladesh’s economic problems stem from the group of 50 or so robber barons into pre-date Khaleda Zia and Hasina Wajed, among them a dozen titans who were originally traders, then became industrialists and private financial institution owners before becoming major stock market players and resorting to scams in keeping with their moral values. As traders they relied upon government contracts to get permits for lucrative imports, e.g. milk powder, sugar, salt, rice, etc or Special Trading Arrangements (STAs)/Barters. This gave them enough financial leverage to come into industry on the leading edge of the early 80s liberalization of the economy. Coming into industry they borrowed heavily from the banks, mostly from their own financial institutions (the ones they created). With the stock market showing signs of really blooming, most of them became major stock market players, driving the stock market upto ridiculous heights in over exaggerated artificial boom. A stage had come where people from all over Bangladesh headed for Dhaka, with all their life’s savings, selling their assets, including ancestral landed property, for pieces of paper in the stock market (and then boom! One day, the profit-takers ran, ruining the middle class and leaving the country’s economy up the creek. These robber barons are so brazen about their criminality that most of them admit to bilking their own financial institutions of hundreds of millions of Takas in fake names but confidently take the “patriotic” plea that the government needs to bail them out “for the sake of the country’s economy or millions will lose their jobs!” Regretfully, very much like in Pakistan where despite its best efforts the government has not made much headway against the powerful rich who have looted the country and do not want to return the loot or pay taxes or what they have illegally acquired “legally” over the years, the Bangladesh Government is almost powerless against the “big fish”. Their rascals (as ours) are having a field day, continuing to living a life of unreserved luxury. In the meantime, a newly economically vibrant Bangladesh is emulating Pakistan in its economy becoming sluggish. However Bangladesh does not have the advantages Pakistan has, an abundance of raw material resources and geographically being at an economic crossroads to three distinct regions (or sub-continents). As such potentially it faces economic apocalypse unless major issues are confronted frontally, above all nepotism and corruption.

In the trial of Mujib’s killing, Hasina Wajed faces a turbulent passage. There is no doubt that there is no sympathy for those being tried. While a vast majority of the people were fed up with Sheikh Mujib’s one-party rule and its corresponding excesses, particularly unbridled nepotism and corruption, there remains strong feeling against the killing of the women and children of his immediate family in cold blood. However issues have gone far beyond the assassination itself, as the recent visit to Pakistan by Khaleda Zia has shown. It is almost impossible to even convince mature individuals in Dhaka that the semi-official welcome given to her was an act of courtesy and was not an arrangement for her to meet Mujib’s killer. One must however state that our intelligence community is rather simplistic in their analysis with respect to Khaleda Zia. In Bangladesh today there are three major political groupings, Hasina Wajed’s AL, Khaleda Zia’s Bangladesh Nationalist Party (BNP) and Gen Ershad’s Jatiya Dal (JD). On the fringes are the Muslim League and the Jamaat-e-Islami, having a vote bank but no potential for gaining any more than a handful of Parliamentary seats in any future election. It is impossible for AL to stay in power if Ershad supports Khaleda Zia, however Ershad seems to have destroyed the enormous goodwill he had among the populace by the mishandling of his personal life. As such whereas he has lost the choice for power, he remains a “Queen Maker”. With Khaleda Zia trying to break JD through former Ershad stalwarts Kazi Zafar and Shah Moazzam Hussain, ostensibly by Pakistani help, at least according to Bangladesh informed opinion, Ershad has no option but to seek refuge with Hasina Wajed. This is an amazing situation! Gen Ershad, who is the most pro-Pakistan among the three is being forced to support the most anti-Pakistan among the three parties so as to survive politically. Kazi Zafar is a known mercenary politician though Shah Moazzam Hussain has certainly better credentials. Whoever in Pakistan is really supporting them, is ensuring that indirectly they are helping Hasina Wajed stay in power. Our Bangladesh policy is very much like the one we have followed in Afghanistan, people like Kazi Zafar are the Dostums and Maleks of Bangladesh, their only constituency is covert external funding. Somebody is wasting Pakistan’s time and money.

Bangladesh has been extremely successful in population control and is making an extremely heavy and sound investment in education. Unlike Pakistan, it does not have special interest groups like tribal leaders and large rural landowners whose vested interest works against education because then it would work against their concept of democracy. It has vast gas resources and a newly economically awakened and industrious population. If it can realistically contain Indian goods and produce from flooding its markets and destroying its production potential, it has a future. It can make a regional grouping, the Association of the Eastern States of South Asia (AESSA) by including the rebellious eastern states of India but these states will necessarily have to be independent and be able to overcome the shackles of the Centre which at the moment has them in such total dominance that 50 years into “independence”, the Government of India does not even permit free travel or commerce in the area? The AESSA concept is the future for Bangladesh, without that they are reduced to mere vassal status, a few notches higher than that of Bhutan or Nepal or Maldives. The only way Bangladesh can be free of Indian tutelage, irrespective of the government in power, is that it becomes (and remains) economically stable.

Bangladesh is today in transition, at an economic and political crossroads. Its leadership will have to work overtime to work itself back into the comity of developing nations as was the promise only a couple of years back. An active, politically sensitive population notwithstanding, the country badly needs mature leadership that will pragmatically engage the issues that need to be tackled to take Bangladesh into the 21st century.

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