FUTUREBANGLA NETWORK

Seven clues to the future?

2005-06-23T16:42:00.000+06:00

What are we to make of the following events? How will they impact on the future of Bangladesh or at least its politics for the rest of the decade?

The soap opera that might have gone under the banner headline "General loses a wife...... and with it goes his party ....... "
The chinese oil company, CNOOC, is getting a $20 billion bid ready for UNOCAL. The boys at Chevron-Texaco are being trumped. Highly unlikely that the US polity will be too happy to have such a historic (and gas reserve) company go to its future strategic competitor. Shell suddenly announces that it is in the market for an oil company! But what if CNOOC does succeed? how will it view the gas in Bangladesh? Will it be even more gung-ho to sell it to India? Or will it do something completely different, given its hold over Myanmar?
US ambassador, Harry K Thomas is apparently being promoted and can get to work more closely with Dr. Rice. Do we extend our congratulations? Perhaps. One wonders however why a renowned South Asian expert, having learned Bengali, having built up personal relationships with all power brokers in Dhaka, should leave at this most critical of times. Politics in bangladesh is taking a nasty turn. Certainly it will enter a volatile period. So why go now?
A related question is: what is Nicholas Burns going to do in dhaka? We know he is coming to South Asia to push for a F-18 factory in India and more importantly play with the Group of 4 application to become permanent members of the Security Council. If he comes down hard on the iran pipeline, what will the compensation be? moreover, how does he propose to fill the void left by Harry..... where is Ms Rocca in all this?
State Minister mosharraf - of KAFCO infamy &c countless other scandals - resigns over car provided by Canadian NIKO, one of the most unsuccessful Oil companies in the world. No one has yet asked the Canadian ambassador to refrain from discussing good governance while NIKO greases its way though the gas sector. Is the issue really the use of that jeep? Then most ministers would have had to say farewell by now. Do we believe ex-minister when he says he was set up? What did he do wrong? where did he mess up? did he upset TATA? Did he not realise that talking about exporting gas is political suicide for any regime? Had he not heard of Bolivia? Or did he screw up a deal? Or was his time up? Again, why be pushed right in the middle of the two biggest deals in Bangladesh's history?
will there be an early election in December? Why are some people speculating about this? What is the logic? Scenario painted as: Ruling regime sees opposition in disarray, especially after collapse of Old Dictator party of Ershad. Opposition will try to spark a movement centred around electoral reform. This will not wash with ordinary people preoccupied with rising food prices and flood. Wrong issue, bad time. Regime announces resignation in September after temporary crisis created by reform campaign .... let's ask the people etc etc . Election pencilled in for December, during "old style' caretaker government set up to monitor the elections. Prominent figure in Caretaker government - prof Yunus....... Who gains from this scenario? Certainly not Ministers with unfinished "business". Certainly not small parties with hardly any candidates on the ground....... If the myanmar pipeline and TATA deals are not signed by September, then certainly not them either.... Only the BNP if they win at the polls...... Is that likely? If one were a betting man, one would say no. At best, too close to call. Of course, anti-India members of regime would not like to be around to pen any deals. Would much better prefer to delay. If they sign, then lose power in 12 months, they lose main issue. They become vulnerable to - thanks, but you are no longer needed brigade..... this could be all be just an unnecessary distraction, and we can forget it........
What's all this talk of an extended Caretaker government? Now what is going to happen with that little chestnut? Answers on a postcard please since we are clueless here........... We cannot possibly believe that they might hang around for a little longer than currently mandated to complete outstanding tasks such as separation of judiciary, regulatory reform and all other activities connected to "improving the environment for business"..............

Stranger things have happened so far this millenium.

If a figure of the Frederick Forsyth mould (author making it big with "Dogs of War") is looking for some material for a paperback, he should come to Dhaka. On the other hand, he has probably got all he needs from Equatorial Guinea........

SIM cards become top priority!

2005-06-20T09:57:00.000+06:00

The influential Centre for Policy and Dialogue (CPD) held a roundtable meeting of economists, Finance Minister and his colleagues and the obligatory donors.
They were there to discuss the budget.
Of all the quotes, the one by World Bank, Country Director, Christine Wallich is galling. She criticised the tax of SIM cards and how that would reduce "development" in the telecom sector.
So that lobbying by the four mobile operators in visiting her has worked. She has weighed in to represent the case of private companies.
It seems the rate at how mobiles are sold is really a "development" issue in one of the poorest countries of the world.
I was wrong. Big boys should cry. As long it is to the World Bank.
The mobile operators are not mentioning the smuggling of handsets into the country. They are therefore complicit in this as they benefit from cheaper handsets attracting buyers.
The finance Minister must think the world is going mad.
PS there may be something afoot as the big business houses all roundly criticise the budget.... Strange since they seem to have got what they wanted...... The budget may turn out to be more "political" than he realised.

Why do you need christine? or Big boys shouldn't cry

2005-06-18T13:59:00.000+06:00

The World Bank makes for an easy target. The IMF or WTO are even better. Many "activists" in co-opted NGOs earn their reputation (and money) by regularly vilifying these institutions. They do deserve their criticism, no doubt about that. But it has become a kind of industry, very similar to the Anti-Apartheid movement of the eighties.

Sometimes, the World Bank may be merely an innocent partner.
One such example is the fracas over the imposition of a $20 tax on new SIM card connections to mobile phones. The Finance Minister, 70 year old Saifur Rahman, slapped this on in his latest budget. All he has done is reduce the exact same amount of tax from mobile phone handsets and levied it on SIM cards. In other words, a new customer should see no overall difference in cost of obtaining service.
The Minister complained that 70% of handsets are smuggled and so the government never received its revenue.
The big four mobile companies are all foreign owned or have significant foreign partnership stakes. They have made a killing by ripping off customers.
Shedding crocodile tears, they have no real answer to the charge they have over-charged on call charges and unfair conditions on prepaid cards for years. It is pretty simple to compare the costs of mobile bills in neighbouring India to prove that point.
What the Finance Minister has failed to do is to provide teeth to the hopelessly out-of-their-depth telecom regulator.

The operators have been crying to the press under the guise of concern for the customer. If they were so concerned (they aren't) they would submit themselves to an audit of their pricing behaviour over the last few years. they might have to explain why prepay cards were valid for 21 days (instead of 30 days and really as now 6 months) and charges at Tk. 7 per minute or 12 cents in a country where per capita income is $450 per year! The costs of investment and network rollout is low given the low rentals, low cost of labour and the ridiculously good deal in leasing a fibre optic network from Bangladesh Rail (a government entity). The latter should renegotiate the deal and invest in making the raliway tracks safer.

It is only with the entry of the Egyptian Orascom operator that charges are at last declining. The Egyptians have done more than the rest put together in bringing down the cost of owning a mobile.
so what about the World Bank?
Well, on thursday the Operator MDs all trooped in to see Christine Wallich, country Director of the World bank to complain!
In other words, they are asking that the World Bank intervene. Let's spell it out. They would like the Bank to lean on the government of one of the poorest countries of the world to withdraw the tax!
Persuasion followed by blackmail, perhaps?
We rightfully complain that the International financial Institutions meddle too often. This is an instance of where they are being dragged into an issue that belongs in the domestic realm.
What will Christine do? I hope she thinks there are far more important matters at hand and tells the operators to fight their own battles. As the phrase goes, "big boys shouldn't cry". We shall see.

Hoo-haa about the budget

2005-06-18T13:58:00.000+06:00

In one of the poorest countries of the world, where 80% go without basic necessities, the high and mighty find that the cost of mobile phone SIM cards is the subject that matters above all else. They can find no other pressing subjects to discuss. Here, we have to support the finance Minister when he retorts that the foreign mobile companies are fleecing customers with the highest call charges in South Asia. Indian operators charge a lot less. It shows how weak or non-existent our regulators are.
Everyman and his dog wants to comment on the budget. We feel disinclined to join the bandwagon. A budget is merely the financial mirror of an economic plan. If the economic strategy or plan is wrong, why get so worked up about the budget? Unless of course you belong to a business association and want to lobby for concessions.
By now, everyone will have said their piece and forgotten about this. Could they instead think about what strategic decisions need to be made. Once those priorities are decided, it is relatively straightforward to produce a budget.
Meanwhile, the general public can only see prices go up and the state of our infrastructure go down. In a land where at least one Taka in three is stolen, the budget is a tool for only three groups:
q Politicians to buy votes
q Big business to get benefits
q Contractors to overcharge on tenders
Oh, and economists to show us they really do know what is happening.

what does Vietnam mean to you?

2005-06-14T15:31:00.000+06:00

To many North American folk, especially the 2 million war veterans, the word “Vietnam” signifies civil breakdown, shootings on campuses, GI casualties, conscription, military defeat and a loss of international prestige and blow to confidence. Today, to the Chinese, Vietnam may stand for “industrial competitor”. If you are a retired colonel in an Indian think-tank, you might look on Vietnam as a strategic ally to contain China. An American businessman going to Da Nang today may know that it was a huge military base in the sixties but is now more interested in it being the hottest East Asian hub for investment. He would be aware that in peacetime, one in five export dollars comes from American consumers.
A few weeks ago, April 30 to be precise, we may have noticed that it was the 30th anniversary of the ignominious retreat from Saigon. Who hasn’t seen the footage of the last helicopter on the last day of that long-running war starting from the forties? Two million dead, a devastated countryside strewn with mines, two generations who had known nothing but war, an infrastructure not worth mentioning and the usual post-conflict mess of liberators versus collaborators to come.

What is the view from Dhaka?
1975 was also an eventful year in relatively new Bangladesh. A flawed, non-performing democracy was shot to pieces in August starting off a fifteen year period of military rule, punctuated by over a score of coup attempts, economic stagnation and utter dependence on the aid consortium to keep the country barely ticking over. Last month, a Prime Ministerial delegation visited Vietnam, bringing the subject into focus. Comparisons have been made. They are not flattering. It would be instructive if we could look how the Vietnamese are progressing and find out where we are better or worse.

The record so far
For those first ten years, Vietnam was boycotted for political reasons. Hardly any foreign investment came in. Unfortunately, hardly came this way either. One would not be too wrong to say we were suffering an economic boycott of sorts, even though we seemed to have geo-political support.
There are 83 million Vietnamese to our 147 million, both historically belonging to rice-growing societies.
Vietnam’s per capita income stands at $542, compared to ours at just over $400. Their economic growth rate was 7.7% in 2004 and they are hoping to reach 8.5% this year. We hover just over 5% on average, looking like we could get to 5.7%. So they are go pull further ahead.
While we are finding it impossible to reach anywhere near $10 billion in exports, they are on $32billion and rising.
In 2004, Vietnam attracted $4.2 billion in foreign investment and expect to reach nearly $5 billion this year. They are gunning for another $20billion over the next five years. Bangladesh has received barely $2 billion in its entire history, the bulk of that for gas exploration in 1997. However, things may be changing.
TATA is going ahead with a $2billion investment in Bangladesh. Proposals are being made by an American energy firm – supposedly $1.5 billion, and there are hints of Arab investment of similar amounts. But in concrete terms, we have less signed and sealed foreign deals and it is not clear yet whether Bangladesh will be a “destination”.

How are we competing?
In industrial terms, we have always preferred to be a one-leg economy. For twenty years, we sang about the virtues of jute, immortalised in the phrase ”Golden Fibre”. Neglecting that sector, letting it rot in corruption and starving it of investment, we “celebrated” the closure of the largest such factory in Asia. We were not too bothered because we had replaced that leg with the one centred on garments. Now that leg looks a little wobbly (at least to foreign observers). Not to us. Even the Finance Minister was proudly recounting on TV his faith about the sector post MFA while the media was exaggerating the threats from China and India. And Vietnam. The threat is real and when the restriction on China is removed in 2008, all hell will break loose. But even if it doesn’t, for the sake of argument, how can we be so complacent? Have we not heard about the concept of diversification? Spreading the risk. And positively, one could say more “legs” mean more profits, economic growth and prosperity.
The Vietnamese have been late starters in many sectors. But they are catching up or overtaking us in every field. Why? Ignoring the political exodus of the ‘boat people’ post 1975, they had comparatively few people working abroad as economic migrants till 1999. They then got on the bandwagon of “manpower exports” and now have remittances of $2.5 billion annually. Admittedly, with economic realignment, the older Diaspora is also reinvesting in the country, especially property. The Vietnamese of Chinese origin have returned to take over the reins of business (we never had that type of entrepreneurial Diaspora). We receive double that amount, but we have had this going since 1976 and they have targeted remittances to reach $4 billion by 2010.
A similar story can be told in ready-made-garments. Starting late, they have already reached $5.2 billion exports per year, very close behind us.
Their export basket also consists of $1 billion for rice, $650 million for coffee, $1.6 billion for wood, $3 billion in footwear, $1.5 billion in electronics, $610 million in rubber. They are also looking to expand their exports of fruit and vegetables, and bicycles.
In other words, if their garments industry suffers, they have other sources of foreign exchange. If the same happens to us, we will only have our probashis to rely upon, which effectively means relying upon the stability of Saudi Arabia!
They are embarking on becoming a world-class manufacturer of motorcycles too.
Vietnam does have lots of problems. Not least environmental damage from industry, factory farming of poultry, leading to avian flu and also a sharp urban-rural divide in terms of income. They are also mired in corruption and have a massive black economy. Their state-owned enterprises lose money hand over fist.
Our clueless “civil society leaders” might ponder on this. All they can advocate is that they will or “rid us of corruption” and ensure the rule of law. What nonsense. No one wants corruption but we have to stop pretending we are going to get rid of it just like that.
Vietnam shows that an undemocratic political set up allied to a corrupt business system can still produce the goods. We are supposedly at the top of the corruption league and have an undemocratic democracy.
So what is the missing ingredient?
It is an elite that has a strategic vision and strong political will, which is then used to mobilise society. That is what is driving economic growth.
We like to spout hand-me-down prescriptions from donor agencies in endless seminars. However, if the donors and the elite in Bangladesh really want business to flourish here, our leaders are going to have to do some new thinking, open their eyes to what is happening in the region and talk some sense with their donor masters.
The donors know all this surely. So why are we still in this masquerade?

What does "'Non" and "Nee" mean to Asia?

2005-06-06T14:44:00.000+06:00

There is a lot of froth around regarding the resounding the "no" votes to the EU constitution. In essense, this means a return to the original, smaller, Western europe project. A Franco-German alliance will gather a few countries such as Spain, (Italy only if Berlucsconi goes) and the Benelux countries. The Euro will eventually become stronger on the back of this powerful group.
British foreign policy has for centuries been all about preventing any single power becoming dominant on the european mainland. The EU could have been the worst of all nightmares since traditional competitors (French & Germans) were looking to act as one. Hence, the enthusiasm to widen the EU to include the Eastern countries, even contemplating Turkey. Being unwieldy, the "Anglo-Saxon" plan, with its very Atlantist orientation, would become a Free Trade Area, jettisoning the social contract and welfare state.
No more shorter working weeks and public transport & health systems.
That explained part of the voting. Despite the triumphalist overtones from the Murdoch owned media, that strategy went too far too soon and has been rejected. If the Eastern European countries are left out of a new "first class" carriage of the main Western economies (or otherwise known as a two-speed Europe), then those on the periphery will lose out. That includes the UK.
Of course, the Nice convention allows things to carry on as usualfor the time being. However, moves are no doubt being made to change the face of Continental politics by the next decade.
By then the US will have been in years of recession as it pays down its debt and the dollar no longer remains the world's reserve currency. Military over-extension, in the search for cheaper reliable energy supplies would add to the toll and produce a popular backlash to neo-con adverturism.
The UK is in similar danger of losing out by trying to have it both ways, while the debt-ridden economy starts to unravels within this new Parliament.

Things could get worse for them though.
Imagine a Franco-German alliance with Russia and by extension, China. In the short term, if the conservative CPD wins in Germany, that may be delayed. But ideas planted today would take five years to bear fruit by which time the Right would be voted out anyway.
The German orientation is the key. Their manufacturers may have benefitted by ditching high cost German workers for Poles at a third of the price. However, this has contributed to the worst economic crisis since the thirties. Big Business may have to return and move even higher up the value chain. Or they could go even further to the East towards Moscow.
Closer links to Russia may prove attractive in becoming top dog in Eurasia. That sets the scene for a head-on confronation (economic for sure) with the US. Russia would dearly love to sell energy at high prices to Europe, lap up German technology and investment and become a modern resurgent economy, and by extention, miltary power to be reckoned with once again. History shows that whenever Russia goes up, German power diminishes. And vice versa. But if history were so linear, no one would have predicted France and Germany working together so soon after three wars (1870 to 1945). So why rule out closer German-Russian links?
If US grand strategy is mainly about controlling Eurasia, it therefore cannot accept what it would see as European meddling. The successes of placing friendly regimes in Ukraine and the Caucusus would be short-lived.

If the US overextends or comes a cropper in Iran and Iraq, it may well be in no position to oppose. A developing vaccum would be too tempting for others to fill.
Western Europe is looking to counterbalance the 60 year dominance of Washington. It also knows that the future points to Asia. The US is peppering the Black Sea and Caspian Sea regions with bases and building pipelines. But will they be able to hold on? I doubt it.
The "Project for a New American Century" recognises the imminent rise of rival powers. Hence the rush. But recognising danger does not always mean you can avoid it.

I am expecting a sea change in five years or so. The French people may have tilted the balance of power for the next decade in ways unforeseen and for far more parochial reasons.
If the European elite can have so arrogantly got it wrong and be so out of touch with their people, why do you suppose that the US has got all so right?
Garrisoning the world does not enhance security. Riding roughshod over European sentiment means that millions are waiting for the giant to stumble.
Oh and there could be another miscalculation. Some zealots may see the No vote as an opportunity to roll back the entire EU project and remove the Euro as a threat to the dollar. If they want to bring the whole house crashing down, that is exactly what they should do. Regardless of short term strength, the days of Dollar supremacy are numbered. The Emperor has no clothes.

After the drama

2005-06-06T14:41:00.000+06:00

Politics took a turn towards the bizarre and, true, to the media age, it was all captured on camera. While we remain fascinated by the drama of it all, there may be far more important fallout for the political scene. The Jatiyo Party of Mr. H.M. Ershad, military ruler during the eighties, had been looking like the kingmaker of any future regime. It does not garner many votes but its power comes from the concentration of those votes in particular northern constituencies. The local people are eternally grateful for the economic largesse bestowed on them from the coffers of central government. JP has been looking like they could make an impact in the next election, with the critical mass for the smaller parties and individuals to coalesce around.
The regime’s main fear is the possible formation of an Awami League-Jatiyo party alliance. The arithmetic of votes and seats look pretty frightening on paper.

Realignment?
Of course, this could now go the other way. JP could be persuaded to join up with the BNP. The union of two military-born parties makes electoral sense. They can unite on a nationalist platform, or perhaps thinly disguised anti-India platform. They can either ditch or keep the Islamic component of the alliance. The only reason to ditch the Jamaat would be to seek “the blessing” of some embassies. Sacrificing Jamaat would not be too difficult, as the Islamic forces have no other place to go to, electorally speaking. Whether in or out of any alliance, the small Islamic vote bank would have to support a BNP-Jatiyo combine.

Missing the real issues
All this speculation is fine for living room gossip and we can amuse ourselves with endless combinations and permutations. No doubt, there will be more drama ahead of us, though perhaps with a bit more dignity and poise.
This farce has to end. While this has played across the newspapers, millions in the capital have been going without water and electricity. The government has made no statement about the two crises and not shown us what they are doing about it.
While the leaders and sycophants are playing electoral politics, the people are being denied basic services. Food prices are going through the roof and will prove to be a major issue at the polls.
One has to question whether the leadership of the Big Two parties in Bangladesh have the finger on the pulse. I am not convinced. They are not doing anything that points to the contrary. The opposition has no clue on how they are going to turn the economy around while the government is diverted by electoral machinations.
If one real issue is the day-to-day struggle of its people, the other big issue is the position of Bangladesh on the global scene. As Singapore Telecom shows, there are quite a few multinationals having a peek at the potential of this 150 million strong economy (even if many are only interested in 15 million with the necessary spending power). Foreign companies and their donor colleagues are more than a little exasperated by the small-minded politics on display. They can spot an opportunity and cannot believe that the Big Two cannot get their act together. Their constant refrain is for the politicians to join Parliament, and make a show of a functioning democracy. Plus provide the stability through ombudsmen, a separate judiciary and enhanced property rights. Politicians would still be able to make money but without killing the golden goose.
This neat analysis has been played a thousand times through their sponsored seminars. The propaganda has worked since a few people seem to think this is all that is needed to reach 7% economic growth and be branded an economic tiger – and, um, provide 2 million new jobs a year, every year, and cope with 80 million people jamming the cities in ten years’ time! If it were only that simple.
What is the growing influence of foreign business and how will they push their agenda?

Out with the old and in with the New?
Are we witnessing the last few years of Old Politics? If there is another election, will it be decisive? Or will it lead to weak coalitions, falling apart at the onset of the first crisis? Whatever the combination or alliance, they will not get the true mandate of the people and will not get the basics right, once in office. After all, the politics of money dictates that the criminals need a payback after the election.
Too many people are getting carried away with the election cycle and are likely to be mightily disappointed with any new administration. Surely we are not expecting the same ageing political leaders to suddenly change and provide mature leadership? Their track record suggest otherwise, even if they have memorised the words to the song “Good Governance”………..
All the current talk of a national consensus seems hollow given that no “Big Idea” is being offered and the proponents are all from the old school. We do need unity and we do need direction. But where will it come from?
Something has to give.

should India do more business than politics with Bangladesh?

2005-05-23T14:44:00.000+06:00

Indian Big Business may be at odds with the traditional approach of its political leaders towards Bangladesh. Could this herald a sea change in the way the two foreign establishments interact? Or is this merely a temporary smokescreen, a phoney entente cordiale, to sign some deals before reverting to the ‘normal’ adversarial state of affairs? As it is, border clashes and the erection of a fence are raising the temperature. This ham-fisted policy may be populist but will be ineffective. It provides yet another exploitable issue. Against this background, is Big Business telling the External Affairs Ministry to “cool it” and smooth the ruffled feathers of its neighbour? Is that one reason why India is suddenly anxious to come to the SAARC summit?
The conventional view holds that relations were somehow better under the current opposition, rather than the present regime. If one ignores the posturing, it can be argued that it is actually the other way round. After all, the big industrial and energy deals are closer to fruition under the present government. There may have been more empathy with the previous government, for historical reasons, but hard business negotiations are more likely to lead to actual signatures on agreements under this administration. In other words, is it possible that, politically, relations are at an all-time low but that, in terms of business, relations are the warmest for a generation? Can this dichotomy continue? “Big Business” India operates under its own steam and may not always work in tandem with its foreign ministry.

Friends again, for now?
Somewhat surprisingly, given the controversy over gas, the Bangladeshi government has been able to agree in principle with the Indian and Myanmar governments to a pipeline to transport gas from Myanmar to India, via Bangladeshi territory. The agreement has not been signed yet and border casualties and perceived sleight, on both sides, can still scupper the deal.
Moreover, TATA Steel has just completed its feasibility study on setting up a 2.4 million tonne steel plant, and power & fertiliser complex in NW Bangladesh. This 100-year-old company is taking a $2 billion gamble that it will be able to utilise Bangladesh’s gas or coal for over a decade to produce low cost steel flat slabs. TATA will not be making this decision lightly and must have made a long-term forecast. It no doubt expects stability in fuel supply and an export exit for its steel products for years to come.
Indian Big Business therefore will have two enormous stakes in seeing a stable relationship between India and Bangladesh. The resurgent economy of West Bengal will be the prime beneficiary of the gas pipeline and will not want any disruption to supply.
Thus, one could say, India’s politicians are temporarily being forced to look for a more amicable state of affairs to ensure that its economy can move forward.

One-off or more to come?
At present, no further Indian investment proposals are officially in the pipeline. TATA Steel is aiming to be a 15 million tonnes producer by 2010 and planning a 6 million tonne project in iron-ore rich Orissa. The 420,000 tonne Bangladesh project may be the biggest industrial venture of all time in Dhaka, but is dwarfed in comparison. Since steel production is an energy intensive operation, cynics may see this as merely a clever way of sidestepping the issue of gas export from Bangladesh. If the gas won’t come to us, we will come over instead. Perhaps.
So what will it take for India’s major conglomerates to take a different slant on the investment climate in Bangladesh?
Apparently, Reliance has seriously considered entering the booming Telecom market in Bangladesh. Is it inconceivable that it, or its competitors, might follow Egypt’s Orascom Telecom in buying into this sector? A clutch of private fixed line licenses has been dished out. Hardware equipment supply agreements were signed with the Chinese, during Prime Minister Wen Jinbao’s recent visit. Is it impossible that some experienced Indian Telecom Operators would be invited to transform Bangladesh’s expensive call market into the low cost mass-market Indian equivalent?
Agro-processing is another potential sector. The abundance of sugar, jute, rice and vegetables might suggest a ready supply in the minds of some entrepreneurs. Finally, there is the issue of ‘transhipment’, i.e. using Bangladesh’s road and rail infrastructure to move goods and services to the almost land-locked Northeastern states. Would India merely utilise the dilapidated infrastructure, weakening it further? Or would it be prepared to invest in the highways and rail-track needed to handle such volumes of traffic?
It will be fascinating to see whether “Political-India” or “Big-Business-India” prevails in setting the parameters.

Why economists should look back to 1964

2005-05-18T14:47:00.000+06:00

In 1964, in undivided Pakistan, the then dictator of West and East Pakistan, General Ayub Khan began a dialogue with the leading economists of the eastern wing. History tells us that East Pakistan became an independent nation seven years later. But that was all far away and unthinkable at the time. Ayub Khan had grabbed power in 1958 at the height of the Cold War. Needless to say he made Pakistan one of the most loyal allies of the USA and was in supreme confidence. A sparkling new capital, called Islamabad, was created in the middle of nowhere. The export dollars from East Pakistani jute were ploughed into industries in the Western wing. East Bengal or Pakistan was relegated to the status of a farm. A hinterland with useful cash-crop farmers and grain producers. The traditional link of East Bengal’s rural economy to the centre of India’s industry in West Bengal had been broken in 1947 with the departure of the British.
Now, the plan was for West Pakistan to become industrialised and take the place of West Bengal. The economic relationship or exploitation was shifted a thousand miles to the west. Things were stirring in Dhaka or Dacca, as it was then known. The Language movement had not died down from the massacre of 1952. The middle class Bengali saw there was a glass ceiling to advancement in the professions and business. The intellectuals had cottoned on to the economic injustice in this neo-colonialist structure. They wanted a better deal.
Bengali economists therefore were at the vanguard of this thinking by default. It was their specialisation. They were supposed to understand how this all worked. In those days, lawyers monopolised politics. They didn’t have strong links to business or finance. Development planning was in vogue all round the world, even in Western Europe. Economics was still unscarred by its failures in the 1970s. Most Third World countries still had hopes of a prosperous future.
It was against this background that Ayub Khan decided that he needed the cooperation of Bengali economists in his strategic thinking. He wanted to meet the leading economists on an individual basis, influence a handful of them and use them as spokesmen for the current economic policy. He met an unusual wall of resistance from the then ‘East Pakistani Economic Association’ who would meet as one or not at all. Divide and rule did not work. Reluctantly, Ayub Khan went ahead and met them. The economists united on one point: each wing of the country would develop its economy on the basis of the resources present within each province or wing. In other words, East Pakistan would use it resources to invest in East Pakistan. The same would go for the West.
The logic was simple. But it wasn’t too simple. The implication was devastating to the existing political set-up. No longer could resources be siphoned out from the East to feed the West. If each wing were economically autonomous, then there would be an inevitable move to political autonomy. Looser links would then weaken the overall political entity and could even lead to ‘secession’. The economists were therefore indirectly talking politics. Geo-politics.
An attempt was made to move the debate to less contentious issues but the economists refused to discuss any other matters until this vital issue was resolved.
This success in nationalist terms then turned into failure several years later. This had been a massive breakthrough in consciousness in the mid 1960s. It could have then led Bengali nationalist economists to produce a coherent economic plan and vision. Politicians would then have known what kind of society and economy was in store for them. The leadership would have been ready not just for an autonomous province but an independent country or state.
We now know that across the board the leaders of the new nation of Bangladesh were unprepared to lead 75 million people to prosperity. The debate had remained confined to the politics of identity and language. Slogans about self-reliance were not backed by concrete plans on how this would be implemented. The major sectors such as agriculture and land, water, education, health and industrialisation were untouched. The movement had not been made aware of what needed to be done. Moreover, it was preoccupied with the (then) seemingly impossible task of liberation. Economics could wait.
Of course, it couldn’t. After liberation, some economists did tell the new leaders in clear and graphic terms about radical economic changes needed but by then the politicians were not prepared to listen. More than forty years later, the number of people living below the poverty line today is equal to the entire population in 1971. Kind words from donor agencies about ‘successful indicators’ cannot mask the failure to provide the very basics in literacy, health, jobs and security to the people. The propaganda won’t wash anymore. Now there is no visible over-arching enemy to aim for. There is no single, external exploiter to justifiably blame out troubles on. The problem lies within our borders.

Is Sylhet to get its very own Farakka?

2005-05-17T14:50:00.000+06:00

Sylhet is a small district at the North Eastern tip of Bangladesh. It holds the bulk of the gas reserves of the country. It also has a large proportion of its people working abroad, sending Euro 300 million of remittances annually: vital to an import-dependent economy. Moreover, Sylhet has borne the brunt of a series of political bombings and killings over the last few years, even within the most sensitive of religious shrines. This is the one district that least needs a new controversy. But it seems it is going to get it.

The Dam
Recently, Bangladesh witnessed a series of rallies and a “Long March” against the imminent construction of a 1500MW dam at Tipaimukh, in Manipur state, one of the Seven Sisters of North-eastern India. It may not have made it on the radar screens. Still, environmental politics is rising up the agenda and will produce a major foreign policy headache later this decade.
The Seven Sister states have suffered from decades of insurgencies. A prime cause has been the neglect by the Centre in faraway Delhi. So the attraction of building a dam that generates electricity for these states seems politically irresistible. Dams and rivers, however, have complex implications for lower-riparian countries. The Tipaimukh dam will devastate two rivers, the Surma and Kushiyara in Sylhet. These feed the gigantic Meghna River downstream.

Alternative thinking for the North-East
Yet one has to ask why India, on the one hand, wishes to build a dam to generate electricity for the northeast, and at the same time send gas from the same region (Tripura) hundreds of miles to the West? Would it not be more cost- effective to utilise that gas for power generating plants to produce electricity? Could that electricity not be distributed to the energy-starved states lying between Bangladesh and China?
In other words, Tripura could set up gas power plants and send electricity to the nearby states of Manipur, Mizoram and Meghalaya via a transmission network.
Moreover, why not use some of Myanmar’s gas for the same objective, if there are insufficient gas reserves in Tripura?
India will have to decide on the priorities it sets between its state of West Bengal and those of the Northeast. Or should one assume Bangladesh is meant to be the fall guy?

The limits to Protest
The long march against the Tipaimukh Dam looks like being the opening salvo of a bitter feud over the next few years. Dams are controversial in Bangladesh, ever since the establishment of the Farakka Barrage in West Bengal in 1974. The first long march by revolutionary leader, Maulana Bashani, in the seventies, saw tens of thousands join together.
Today, there is a new dimension in play. Influential quarters in India and the West have been warning about the rise of Islamic movements in Bangladesh. Some counter that this phenomenon is exaggerated. Whatever the truth of the matter, they exist. Nothing would give them a more powerful shot in the arm than the unilateral decision by India to block the flow of water. A new Farakka, a new obstacle, a new cause. Bangladesh depends on agriculture, and therefore water. Is this not the perfect issue for any political force that depends on animosity to India?
In 2002, the small Left Wing parties organised a series of long marches throughout the country against the export of gas to India. They galvanised civil society into action. These two groups had no overt political power but the issue was so emotive that a government with a two-thirds majority in parliament told the donors and energy companies to back off. Its survival was in question.
This time there is a difference. The gas fields lie within the territory of Bangladesh. The dam will be built outside the borders and divert or block water before it enters Bangladesh. In other words, there is very little leverage. The power lies on the other side of the border. The protests may therefore not be effective.
Nevertheless, the issue will not go away and will act as a lightning rod for political posturing. Both India and Bangladesh need to work on improving relations. The benefits of a sound cooperative approach are plain to all and worth countless billions. The place to start is to have genuine dialogue, show sensitivity, to reveal plans, so as to remove suspicion. Both sides will need to use more imagination than they have shown so far if they want to come out of this unscathed.

Breathing space!

2005-05-10T09:26:00.000+06:00

The results so far indicate that the AL incumbent will win the mayoral election in Chittagong. The political classes in Bangladesh have been keeping their eye on this one. Even foreign institutions such as the International REpublican Institute (IRI) were there, having a look. Thousands of people were milling around into the early hours of the morning, ostensibly to ensure that counting would be done properly. To some, it must been reminiscent of Kiev..............
Counting had stopped unexpectedly at 9.30. After pressure , it resumed an hour later. The papers are full of stories of irregularities, but they do not at this juncture look to have been significant.
This restart of counting (and acceptance of the inevitable) was indeed a wise move from the government. They must have known that any signs of widespread rigging would have been pounced upon by an opposition itching to launch a movement.
They can now try and take the winds out of the sails of the "political reform movement". If they want to play a masterstroke, the government can now set up an all-party forum to examine the issue of electoral reform, calling in civil society and interested donors. They can do this from a position of strength, showing the public that elections can be more or less free and fair, and drag this on for six months.
By agreeing to a debate, the opposition will lose its momentum. If they do not agree and take to the street, then the government can show that the opposition is actually only keen on trouble and insincere.
What this country least needs is another year of instability on the basis of electoral procedures. Ak-dofa (one-point) movements are merely diversions away from our fundamental problems.
Unity on an "agenda for change" makes more sense as far as a hard-pressed population is concerned.
If Bangladesh is really at that mythical "take-off stage", then we need to understand exactly how we are going to take advantage of that and propel this country to the next level.
Changing the guard through nicely run elections is not enough. We have had three reasonably conducted elections and haven't much to show for it.
There is a window of opportunity for the rest of the year to achieve consensus what the real agenda should be.
This window would have closed had there been trouble in Chittagong. It will now close early next year as we enter the cycle of electoral politics.

What is free is not always fair

2005-05-09T09:59:00.000+06:00

If we do not ask people what they think, why should we expect them to take a stake in our policies? After fourteen years of democratic rule, the political leaders are as far away from the people as they could be. Try though they may to “meet the people”; they are kept apart from their “constituents” by a phalanx of sycophants. They hardly ever hear the truth. If they do, it is indirectly via local party activists who relay the frustration of the electorate. Sixty million voters have little or no stake in this democratic system. Combined with a faltering, under-performing economy and precarious security situation, and one understands that the legitimacy of the democratic experiment is in question.

Infrastructure Politics:
How do people vote? Do they “think local” and “act local” too? And why should n’t they? They now mistrust all politicians. The electorate may be functionally illiterate but they are nevertheless tactically astute and also judge their local candidate by how much they can deliver. The voter wants to see tangible signs of “development”. That means a bridge, culvert, school, clinic, canal, road or electricity. They correctly judge that most existing candidates come from dubious backgrounds. They can see that the election is being bought as candidates spend Tk. 10 million for rural seats and Tk. 50 million for urban ones. Cigarettes (biris) and Tk.100 bills are literally given away. On top there are feasts to attract poor voters. Election rules are flouted. Manifestos are ignored. Ideology is dead. It seems to boil down to a question of which candidate can provide the most infrastructure.
Once these criteria are satisfied, other considerations come into play. For example, the background of the candidate is important. How much time has he spent in the area over the last few years? If he is an absentee politician, that counts against him since he is more likely to forget to secure funds for that road or bridge than one who is based in the constituency.
Voters still vote for the big two parties since they are likely to be in government. Independents rarely do well. ”New party” success at the polls is almost unheard of.
Now, we are asked every five years to stand in line and then vote for a local candidate. We get all very excited on election night to see who are our political masters will be and then get on with our normal lives. Our local candidate gets elected, and that is the end of that. Promises are forgotten, people are betrayed and the new MP gets comfortable in Dhaka, “doing politics”. We have had our one-day of power. We have sent our ‘representative’ to Parliament. Job done.
We need to see a return to legitimacy. That means citizens need to see a benefit from democracy. In terms of jobs, economic upliftment and social change. They judge the system by its output, not its input.

What’s free isn’t always fair
We used to marvel at our ‘unique’ caretaker system. Whereby the incumbent government steps aside for 90 days to allow a ‘neutral’ administration to handle the elections. Now even this is embroiled in controversy. It is a pity that this was not immediately conceded, an inquiry launched, the appropriate changes enacted and made into a non-issue. Instead, it is the latest lightning rod. Whole rafts of proposals are about to come out. The opposition party machines are ready to enlighten us, and then take to the streets.
However good the ideas, I find it hard to believe that the quality of politician will suddenly improve. Only because so many of the proponents for political reform are alumni from the old “school of corrupt politics”. They are not fresh faces. Their track record does not inspire. The barometer for change will be how many old ‘leaders’ step aside or are forced to retire. Dhaka City has had its cleanliness drive. We need to see one or two political parties cleaned up too. The impetus can only come from enlightened leadership, bold enough to try a new approach.
Until then, it appears to the layman, that a “free and fair electoral process” gives us a false choice between two almost identical groups. Political reform may eventually lead to a new generation entering politics, but that will take time. Time that this nation does not have.
So, can we make a little request? As you engage in the battle over the electoral mechanism, bear this in mind. Do not spend all your political capital telling us how you would like to get to power. Save some to tell us what you are going to do when you get into power.

Printed Daily Star, May 9th 2005

Will the UKay be OK after the election?

2005-04-30T14:51:00.000+06:00

The UK general election now enters the final straight. Consensus forecasts expect a 80 seat majority and a return of the Blair-Brown team. Since campaigns are so regimented and risk-free, barring a Madrid 3/11 incident, no one will be surprised if on Friday May 6th they awake to a "I-feel-humble but grateful" speech from Mr. T.
Expect to hear a lot of cheering if instead there is a late swing or low turnout that reduces the majority to only 20. Unlikely? Yes but would it not be just? That famous 'bloody nose'. Despite the access to information, the electorate seems remarkably un-informed. Perhaps it takes time for them to accept new realities.
The debt and housing troubles are about to start. Hence the timing of this election. If the election had been held in 2006, then things could have been different. But it isn't next year, it's now .
So the worst "Tony" can expect is see the already written victory speech drastically re-edited on thursday night, becoming "I hear the British people loud and clear. I will therefore not see out the whole of this term...and I am truly humbled.". But he will remain PM next week, next year and the year after that.

Whatever the size of the majority, there will be a host of New Labour aspirants who will be worried about their future. Will they be the "right-man-ten-years-too-late-Michael Portillo" of the Labour Party?
Is 2005 for New Labour what 1992 was for the Tories?
Then, the grey now-forgotten Prime Minister John Major was at the helm of an economy deep in recession. In this cycle, it may be a year or so before it begins. Unlike the US system, the British Prime Minister can choose the date of the election. It is being called over a year early. Why? With a three-figure majority in Parliament and no new Big Idea, there is no urgent need to seek a fresh mandate from the people. It is a case of "cut and run".
The economic figures so far in 2005 bear out all the worst fears of the administration. Retail sales are down as consumers realise they are heavily indebted. House prices are on the wobble and also on the way down. How far, no one knows but the go-go years are definitely over.
So whoever wins and by how much, Blair (& equally responsible Brown) will be handing over a poisoned chalice to the next generation of New Labour hopefuls.
The 2005 election to date has been dull in the extreme. In fact, extreme is probably the right word to describe a Tory Party which has nowhere else to go. After all, the economic philosophy is shared by both major parties. They can only spin out a yarn that they are radically different from each other. In economic management terms, we have seen 'coalition government" for about 15 years.
But with race (it's not about immigration) the Tories have shown they are capable of crossing a bridge too far.
It will be to no avail. This time round, only the Liberal-Democrats could have benefitted. Unfortunately for them, they seem to lack the ambition and (probably) will miss the opportunity. The Tory Party should soon be searching for a new leader and will accept their status as the "blue-embittered-little-england" look alike of the UK Independence Party. Depending on their performance, perhaps they will even merge with UKIP.

What about the legacy?
The New Labour project will not be reviled because it will not even be remembered. How many people remember Y2K or the e-economy or dot-com? As they are fast fading from our collective conscienceness so will the Third Way ideal. In fact, when do you last hear about the Third Way? Ten years from now, we will still recollect that a certain Margaret Thatcher set us all off on a crusade. Hated, seldom liked, she was nevertheless respected. That was indeed a kind of revolution. Its impact is being felt in the Third World today as state entities become privatised and free markets spread globally.
New Labour stole her ideas but will always remain "the Pretender".
The next New Labour government will be in a state of permanent crisis. The inevitable housing collapse will hit the consumer-driver economy for six from 2006 onwards. The downturn will last for the rest of the decade. US Federal Reserve's Alan Greenspan cannot build another global credit bubble to get us out of this one. By 2008, expect to see another "once-a-generation-sterling-crisis". At the same times as the bubble bursts, investors will no longer perceive sterling as a petro-currency as the decline in North Sea oil production coincides with Britain becoming a net oil importer. Technically this point was reached in 2004, but the gap between production and import will widen significantly and be noticeable.
Once again (as in the early 90s), tens of thousands of supposedly wealthy Britons will be forced to sell their holiday homes in Spain and Greece. Even some of the more expensive French properties may go too.
We should keep an eye on what the big financial institutions do. After all, the London Economy is supposed to reach as far as Northern England's humberside. Will the City permanently shed 50,000 more jobs under cover of this gloomy environment? Will they see this a chance to export jobs to India in the higher value back office occupations of research? A lot of money shuffling activity in the second decade of this century may no longer occur in London, staffed by commuters from Essex or the Home Counties. In other words, though the City always culls, as its profits go down and hires new blood a few years later, will they fire but forget to hire this time?
These scenarios have been prematurely predicted before but now telecommunications, the Internet and a ready supply of educated Asian graduates has made this possible. Change may always be technically possible but it takes a decade or more for it to become normal. We have now passed most of that decade. The historic shift of manufacturing industry to Asia is now an expected fact but also seemed impossible in the seventies. Replaced by a high-value services industry (it was not all about Big-Macs!), society was cushioned and was able to enjoy another bout of prosperity. There were casualities as many manual workers were not able to adapt, but the majority did not notice.
The Finance Minister, Gordon Brown, did state recently that the big challenge is the inevitable rise of China and India. This is what would expect to hear in an intelligent election campaign. Of course, this is the last thing any one wants. This debate will only come once a crisis knocks out the collective complacency and people can think the unthinkable.
Still, London will remain a financial centre for years to come> They will have the front office but need less employees as they shift the back office abroad. There will also be inward foreign purchases of property - domestic prices will dip by 30% while sterling's drop will account for another 20%. It will be very cheap if you hold yen, yuan or Swiss Francs.
It will be a different picture for "Middle England". So dramatic, that it could change the face of British Politics.

Is the future black?
In the election of 2010, the result should be a minority government. With the implosion of New Labour, will come a series of unstable party coalitions. There will be no overriding project, not even a european vision, that will be able to take centre stage. Old Labour will never return since it was based on manufacturing labour - the original working class. That "description" ceased to exist years ago. New fads such as Respect will go by the wayside and never enter the mainstream. The Right will always be there but remain a minority magnet for Little England and never reclaim the "natural government" of the Conservative Party. Possibly, regionalism will be the likely beneficiary of this vacuum.
Most of this week, we will have our eyes on the election of 2005. In the minds of the ambitious, the next campaign starts on Friday, May 6th. A British Prime Minister once said "a week is a long time in politics". How right he was.

Border troubles

2005-04-28T16:55:00.000+06:00

Can a fence stop migration that easily? One doubts it. Desperate people want out and will look for greener pastures. They need to survive. The border security forces are jumpy. Innocent people are getting killed. The siuation is still in relative control, as this is not new. Nevertheless, it calls for cool heads and a look at the big future. It is exploitable for cheap political gestures.
Solution lies not in short term populist gestures to placate an "anxious" electorate but in getting the economy of Bangladesh, especially of the rural areas, to grow and provide jobs. That should be the medium term aim for both governments and the basis for cooperation.

Clean for only 15 days!

2005-04-24T12:20:00.000+06:00

The Dhaka City Corporation is in the middle of a 15-day cleanliness drive. On top of the 7,000 regular cleaners, they have hired another 5,000 to work in the morning for three hours. When asked, residents have stated the obvious that they want a clean city for 365 days, not a couple of weeks. The authorities say they are trying to educate the public to use dustbins etc. However, the idea of civic sense will disappear within a month.
How much would it cost to keep this extra workforce employed for the whole year? A half a day’s labour costs around 1 euro ($1.3). That translates to E30 a month or about E350 a year. So 5,000 extra part-time workers would need a budget of E1.7 million or US$2.3Million per year. After all that wastage of money on “beautification”, do we really believe that the City cannot manage to find just over $2million to keep the capital clean? If there are any donors reading, think about this one. From cleanliness, we can move to mosquito control (very similar work) and restore civic pride and produce a decent environment to live and work.

The small investor screams as prices go down!

2005-04-20T10:52:00.000+06:00

A group of vociferous small investors protested at the decline in the Dhaka Stock Exchange. They have seen a drop of about 15% in the value of their portfolio. Part of the reason is that lots of shares were purchased before companies declared dividends. Now that they have collected their dividends, those same "investors" have sold off the shares.
The DSE stock market casino is reputedly rigged by a select group of traders, manipulating prices and creating artificial booms. It has very little to do with good solid companies raising finance for capital investment to expand capacity and create jobs. Ignorance and greed prevail. We have not reached the mania of 1996 when the index reached 4,000. We are now at 1,750, having jumped from 1100 in less than twelve months.
Nevertheless, a significant number of savers in old Dhaka are going to be mightily disappointed. They will have to grin and bear it. Similar protests have occured in the Karachi Stock exchange, where there has been a much bigger boom and drop.
As they say, "only for the brave. Not for widows and orphans".

IMF are back to their old tricks again

2005-04-20T10:43:00.000+06:00

Interest rates are on their way up. The banks are being squeezed by the central bank, Bangladesh Bank, on the "advice" of the IMF. Big business is up in arms, showing remarkable unity. They have criticised the IMF for deficient analysis and misunderstanding the nature of inflation in this country. In their view, extortion, supply shocks, rise in administered prices of fuel and electricity, depreciation of the Taka cause inflation.
Unfortunately, the IMF is merely relaying the global message from the world's financial markets that interest rates have to go up to curb the enormous asset bubble in the US and Europe.
Things have got out of hand as real estate prices are at ludicrously high levels.
We fully understand that compulsion. But that has very little to with Bangladesh where interest rates are at 12 to 15%, not 3%!
It is the case of the old IMF philosophy once again: One size fits all.
On top of all the political problems, do we need economic destabilisation too? 2006 does not look too good.

risking other people's lives

2005-04-16T09:39:00.000+06:00

A nine storey building collapsed in the suburbs of Dhaka. The death toll continues to rise and will be in triple figures. The building housed a garments factory where a few hundred workers were engaged in completing a shipment. The rescue mission is desperately trying to find survivors with sniffer dogs but after nearly a week, it is going to be about extricating bodies.
Like many buildings, the owners constructed a ramshackle entity on soft ground. It is common for developers to fill water bodies with soil and sand and build up. Land prices are shooting up and lethal buildings are sprouting up in all directions. In a few years' time, there will be an earthquake. The death toll will run in the hundreds of thousands, partly because of such criminal negligence.
The business association, BGMEA, has an opportunity to take action, leading from the front. They must insist on a safe working environment for employees and management. In a post quota world, it is unlikely to happen. The garments industry is likely to lose out big time from 2007 onwards as buyers establish supply chains elsewhere. In the meanwhile, profiteers will put people in risk, knowing that there will always be takers for $1 a day or even 50 cents a day jobs.....

Searching for a Model?

2005-04-06T15:44:00.000+06:00

Those of an independent bent like to parade the example of Mahathir and malaysia. I used to, and I still admit an admiration for their marvellous progress (except on the environmental front).
Recently, I have has to conclude however that they may be out of reach for at least a decade or two. In other words, we can make Bangladesh a success but even if we started today to bridge the gap from $1900 PPP per capita income to $9,000 of Malaysia would take years.
Instead, why have we stopped looking to the West?
Only 30 minutes flight away is a territory which some used to laugh at, but which is going to be THE next investment destination. West Bengal.
While you are trying to contain your laughter, let me ask you to dump the "City-of-Joy-and-Communist-Union-strikes-mother-Teresa-blackouts" picture, that is still the brand image of Kolkata and the State of W. Bengal.
True, they have severe problems, including malnutrition. At least they admit it. But there is a sense of purpose that seems to be lacking here.
They are trying to copy the Chinese model and building their economy, taking into account the present global environment. Don't be surprised when they compete head-to-head with Bangalore in IT and regain their industrial pre-eminence of the sixties.
Within ten years, they will be streets ahead of us. In industries, infrastructure, education, IT, health and security.
We need to learn about their mistakes and successes, and understand the similarities with us in terms of agriculture, weather, culture, location etc and develop our independent plan. Their experience is a lot more relevant than South-east Asia.
We still have a lot of advantages over them - I will leave that for another day.
But first we should do a bit of research, shouldn't we?
The real problem is that the middle classes in dhanmondi cannot bear one thing and that is a resurgent West Bengal...... Well, they had better accept the fact. It is happening and we need to pull our socks up. And quick.

what will you do when you get into power?

2005-04-06T15:29:00.000+06:00

This is the question we should be asking. There is a media frenzy about the issue of how the next election will be conducted. In Bangladesh, we have a unique process where a "caretaker" government comes in for 90 days and ensures a "free and fair" election. You see, no one trusts the other, so only a retired judge or some such elderly non-partisan figure can preside over the charade.
While everyone gets excited about this latest wheeze, can someone tell me what the plan is for those lucky to get into power?
Or "what will you do when you get into power?"
What is your programme? By programme, i do not mean a 6 point demand or a 21 point demand etc etc.
I mean a PROGRAMME that is realistic i.e will not be torpedoed by the Bank yet has some semblance of national sovereignty to it.
After all, the PRSP is meant to (at least officially) be prepared by us. We know it isn't. Still, we could actually work on one, couldn't we? One that isn't produced by some co-opted economist but a range of political and social forces.
Could any new government to be let us know how they are going to take us into a 7% economic growth trajectory and the same time slow the migration from villages to cities as the rural economy implodes?
You know what will happen. The politicians will wave their X-point demands and promise to eradicate corruption, but really concentrate on how to win the election (on their terms) ....... if there is to be an election...... Now that's a thought......

Getting it right with China

2005-03-24T12:42:00.000+06:00

As we go into press, the visit of the Chinese Prime Minister Wen is still on. Makes a change from SAARC! He is on a wide-ranging tour, including India.
Let us close that irresponsible chapter of opening a Taiwanese consulate in 2004 – what else would you call an outlet handing out visas? The Chinese consider Taiwan as part of their territory and liken the new invasion facility to the US President Lincoln’s actions over a secessionist South. That is their internal matter and we would be foolish to stick our noses in there. The Chinese like funding infrastructure projects. Long may we see more “Friendship Bridges” in the future! They are also mentioning the two stalled power projects, because we think they were too expensive.
Beyond that, we need to understand our position vis a vis the blossoming Sino-Indian relationship. Trade is up to Euro 10 billion (1 Euro is worth 1.3 dollars). It is growing fast and has major implications as it binds the two nations together. We are now going to be able to fly direct to Kunming (south West China).
How do we grow that into the famed Eastern Quadrangle of Eastern India, Bangladesh, Myanmar and SW China? Just as we look back 34 years to March 1971, our children will look forward 34 years to 2039. That world could be unrecognisable. Visionary leadership could see a booming region or the New World Frontier. On present trends, however, they will have said that this generation failed to see the possibilities and the region sank further into violence, flood and chaos.

Kolkata 4 Dhaka 2

2005-03-14T16:43:00.000+06:00

In this high scoring football match, we are deep into the second half. Dacca had taken the lead early on in 1971, becoming a capital city of an independent nation. 0-1.
Calcutta didn’t show much creativity in the seventies and made no attempts on our goal. They however came back into the match when Dhaka (as it changed its name) scored an own goal in the eighties, discarding English, failing to make Dhaka an attractive place for investment and becoming a foreign aid junkie. 1-1.
Kolkata also liked to ‘partake’ but Dhaka didn’t know when to say NO.
Early in the second half (otherwise known as the nineties), Kolkata went ahead as it solved its electricity problem. 2-1.
No longer would it be infamous for hours of load shedding. Dhaka took to blackouts with relish.
Kolkata then went further ahead as it invested in its transport infrastructure. An Underground metro. Flyovers. 3-1.
Dhaka’s manager delighted in the increasing traffic jams and told his players the tailbacks signified progress, like in Bangkok!
Without any help from the manager, Dhaka got a goal back, with the rise of the ready-made-garments industry, making it 3-2.
Here was something new and different. More than a million women were beavering away in Dhaka’s factories. Dhaka was earning dollars, not just getting them from the donor ‘fix’.
Kolkata however spoilt the mood with their late surge in the IT sector and the re-establishment of a wide range of heavyweight industries in and around Kolkata. 4-2.
With the score now at 4-2, the Dhaka crowd is getting anxious. Can they get two goals back to level the match? Victory seems a long way away as our defence could quite easily score some more own goals. One wonders if they have been bribed.
Nothing is impossible and there have been some great comebacks. After the war, South Korea was in tatters. All the industry was in North Korea. However, within a generation, South Korea won the match by a mile. Ireland also came from nowhere and now has a greater GDP per person than its rival, UKay. Germany did the same to the UKay too in the seventies.

Is Kolkata really ahead of Dhaka?
In many ways, yes. They have an underground metro. We don’t. They have over a more than 15 flyovers. We have one, soon to be only two. They have a vast industrial sector that dwarfs ours. They have a Special Economic Zone. We are at the stage of learning what that is. They are better educated. Kolkata has a vibrant IT sector. IBM and other multinationals have set up shop in Kolkata. English is widely spoken. There, not here. Business Process Outsourcing (BPO) or the transfer of white-collar jobs from the West to lower cost India is happening in Kolkata, not just Bangalore. IT design, call centres and the rest. We are merely talking about it in seminars. They are doing it. They hardly ever suffer power-cuts and export electricity to other states. We have load shedding all through the year. Our cost of living is soaring across the board.
We are decimating our jute and sugar industries. As we close down a factory, they open one in the same sector on their side of the border.
It looks like the old nightmare economic relationship of an Industrial West Bengal and a rural East Bengal is reappearing. After all that sacrifice and all those high hopes.
However, there are one or two bright spots. We have converted more vehicles to CNG, so reducing our pollution levels. We have a ready-made-garments industry, employing a million people in the Dhaka region. They will, however, convert to CNG very soon and we have now lost our garments quota advantage.

Before
In the eighties, Calcutta was at its nadir. It was famous for Mother Teresa, the City of Joy and Geoffrey Moorhouse’s unflattering book on the city. Business houses left in droves, frustrated by the power cuts, unionism and strikes. The Left came into power in 1967 and went to work in the villages, neglecting ‘bourgeois’ Kolkata. India was still mired in the licence raj system. Calcutta and West Bengal had one time accounted for 25% of entire India’s industrial output. That steadily declined as industrialists closed and relocated to Mumbai.
Dhaka meanwhile was in its second decade as the capital of an independent state. Though regarded as a backwater and unstable after a series of political upheavals and military coups in the 70s, it at least had a chance. Pollution was unknown. Law and order was ‘normal’. One could move from one end of the city to another with relative ease. The ready-made-garments industry had just been established, ahead of many other later competitors. Vietnam and the rest hadn’t got off the blocks yet.
With Calcutta on the slide, and Rangoon, Thimpu, & Kathmandu still asleep, Dhaka looked the most attractive in this region. Or at least had the potential to do so. No one had heard of Kunming. China was only getting started. The eighties were our lost decade, where we could have stolen a march on the rest.

A hole-in-the-middle?
Given our dependence on donors, we cannot forget to mention them. By chance, I happened to be speaking to a senior aid official recently. He described donor policies towards Dhaka as ‘the-hole-in-the-middle’ approach. I.e. donors were so geared to poverty reduction in the villages, they forgot that Dhaka was on the way to becoming the fourth largest city in the world. They are all neglecting the capital city, which is thus growing like a hydra in all directions, without any planning. The industrial, financial, property and service sector machine operates, or rather sputters in the capital region. Focusing some attention on Dhaka may bring quick returns and save the city from a disaster in ten years’ time. Investing in Dhaka would bring national economic benefits.

Can we get back in the match?
We set ourselves very low targets, lacking ambition. Making such a fuss over one tiny flyover in Mohakhali says it all.

To score three goals, we must:
· Create an affordable mass public transport system, for people and not just the private car. That allows poor people to commute from distance and not have to live in slums
· Set up local gas-based power generation plants to solve the load-shedding problem, thus boost our industrial growth and attractiveness for investment.
· Reduce the cost of living, especially of essential items by bringing order to the out-of-control racket of a handful of big players, taking a cut on every turn.

To score the winner, we must persuade the aid agencies to actively support the re-invigoration of Dhaka. They will have to do a lot more on financing basic housing, improving slum conditions, water quality, flood control, health clinics, waste management, and energy efficiency. Beautifying the city by focusing on basic needs will bring much more dividends than chrome-coloured dividers.

Will we win the match? The heart says we just might. The brain says we haven’t a hope in hell.
Unless, that is, we find new managers. Unless, we replace the fading, older stars with the best from our youth team.

freedom fighters start again

2005-03-12T11:20:00.000+06:00

Last Friday, on the 11th of March, a section of freedom fighters had a convention to announce a new move. The highlight was the speech by Bhasha Matin, the famous language movement veteran.
Will this be one last hurrah? And what will they do in the volatile political environment of 2006?

South Asia Disunion

2005-02-14T10:29:00.000+06:00

Most of the world hasn't heard of SAARC. India refused to attend the latest summit of south Asian leaders, citing the latest coup in Nepal and the security situation in Bangladesh.
If this had been ASEAN or Davos, they would have come, coup or no coup.
SAARC gets revived every now and then but isn't going anywhere. Until Pakistan and India patch up like France and Germany, you can forget it.
Much better to bet on BICM - Bangladesh India China Myanmar. Will take a while for this grouping but it will take shape towards the end of the decade.
Thailand wants a share of the lucrative Indian market and is pushing for BIMSTEC (BICM, minus china plus thailand and Sri Lanka).
But you cannot leave out China.
So perhaps there will be a BICMT (the T for Thailand).
For more, have a look at the 7th February 2005 issue of Asia Times Online on "SAARC close to use-by date".

watch the price of rice in bangladesh

2005-02-14T10:26:00.000+06:00

Hartals are back in fashion. For a few weeks, we saw some innovative campaigning - human chains from one end of the country to another. That's all been forgotten after the latest political killings.Rice prices are at record levels, blamed on the devastating flood in 2004. Farmers aren't selling to the government as they can get better prices from the market than the government procurement level.The politicians are underestimating the impact of unaffordable food prices. The price of grain is probably the most vulnerable indicator for any government. They had better solve it if they want to return to (or remain in) power.