Bangladesh, economy and politics in imbalance

[During the month of December I wrote several articles in Bangladeshi newspaper about the runup to the election in 30th December. I am going to post some of these here so that BP readers may get a native perspective on what’s going on.]

As Bangladesh heads to parliamentary elections to be held on 30th December, only a risk-loving gambler would bet against the governing party returning to power. In its latest country report, Economist Intelligence Unit (EIU) expressed the conventional assessment that the Sheikh Hasina’s government will retain power easily. The analysis powerhouse based this expectation mostly on the strong economic performance of Bangladesh in the last decade under the current regime. Over the last ten years, GDP growth in Bangladesh averaged well over six percent and is projected to be even higher in the next few years. Foreign exchange reserve has increased more than fourfold, and the currency has remained steadfast against hard currencies. During the last ten years the Bangladeshi currency has lost only twenty percent of its value against US Dollar while the Indian Rupee lost thirty-one percent and Pakistani Rupee forty-one percent.

Not just in economy, Bangladesh has made great strides in social development. By World Bank estimates, national poverty rate dropped from forty percent to twenty-four percent in the ten years preceding 2017. By Bangladesh government estimates, by 2015 the country has already achieved many of the Millennium Development Goals, for example in nutrition, primary education, child mortality, maternal health etc., far ahead of most of the LDCs. These growth and developments were not urban-centric either, rural household income increased by forty percent from 2010 to 2016.

However, the ongoing pre-election period may baffle an outside observer because, despite strong economic growth and widespread expectations of a win, the regime is carrying out an unprecedented campaign of repression of political opponents. Not only the ruling party is visibly controlling every facet of the administration, including the election commission, but the party is using these state organs to directly thwart, attack, arrest, harass opposing candidates countrywide. This would not surprise regular observers of Bangladesh affairs because, along with the remarkable economic growth, the last ten years were also marked by clear democratic backsliding and authoritarianism. German research group Bertelsmann have been keeping tabs on democratic development in the world since 2005. Its indexes show that status of democracy in Bangladesh has been rapidly deteriorating since the non-competitive election of 2014 and in 2018 Bangladesh was downgraded from a highly defective democracy to a moderate autocracy.

The level of repression before the election suggests that the rosy economic and development numbers may not be providing a faithful representation of the economic well-being of the general people. A recent report by International Labor Organization (ILO) said that youth unemployment in Bangladesh grew by seven percent from 2010 to 2017, one of the worst unemployment growths in developing countries. In a pre-election assessment of the economy of last ten years, CPD, the venerable Bangladeshi thinktank, put forward the calculation that one-third of the educated youth are unemployed. In the recent years, the country has been rocked by several urban youth movements demanding more access to government jobs, for many the only avenue for upward mobility.

At the same time, several estimates from Bangladeshi sources say that as many as half million foreign nationals, mostly Indians, work in Bangladesh in skilled/white collar jobs. This lack of Bangladeshi educated and skilled workers is greatly explained by the dismal state of higher education in the country. Times Higher Education produces annual world university rankings with one of the largest coverage of universities. In the latest 2017 rankings, there are more than thirty Indian universities and five Pakistani universities among the top one thousand universities of the world. Bangladesh has zero. World Bank data shows that during the last ten years, Bangladesh annually spent only about two percent of its GDP in education while Pakistan spent near about three percent and India three and half percent.

Economists studying development argue that a country’s long-term economic growth comes mainly from two sources, investing in human capital and investing in physical capital.  From previous discussion, we have seen that human capital development in Bangladesh has been significantly below par to its neighbors. In investment, the picture is not much better either. The previously mentioned CPD report showed that in the last ten years both private investment and foreign direct investment growth in Bangladesh were anemic. Rather than investments, much of the ‘miraculous’ economic growth of Bangladesh have come from exports, consumption and government spending.

Export growth, in particular, has been spectacular; more than doubling from seventeen billion USD in 2009 to thirty-seven billion in 2017. For comparison purposes, Pakistan’s total export in 2017 was less than twenty-five billion USD. However, if we look at the composition of export, a stark imbalance appears like the elephant in the room. More than eighty-five percent of the total exports of Bangladesh is just from one product category, ready-made garments (RMG) and textiles. Any development economist would say that such high level export dependence on just one product is alarming for any country and any product. RMG may be an especially bad basket to put in all the eggs.

Garments is a low-technology, labor intensive industry that mostly depends on ready-to-export, turn-key factory units. Although the industry employs a great number of factory workers, lack of learning and upgrading in jobs mean that workers have short shelf-life and are unceremoniously terminated after the end of productive years. The mature technology of RMG means there is little effort for innovation, R&D in the export industry. Thus, there is a lack of need for skilled and technology workers, which means that the industry provides little demand for development of human capital and technological capabilities in the country.

A particular feature of garments industry is that, unlike chemicals, machinery, IT services etc., it has very little input-output relations with other major export industries. This means that development of garments industry does not spill over to development of other more value-adding industries. Despite frequent boastful proclamations from regimes and entrepreneurs, industries like pharmaceuticals, electronics, IT services, chemicals etc., are prominent in the Bangladeshi export basket by their insignificance and absence.

Some economists argue that “countries become what they make”. The RMG industry, by dominating Bangladeshi economy for long time, has not only dramatically shaped the society but also the politics. This is a strikingly unequal industry with a few dominating large firms and many small firms servicing those large firms; there is a conspicuous lack of mid-sized and diverse firms. The industry creates a narrow business elite that can easily collude with the government for preferential treatment. The regime, in return from this privileged treatment of the industry, obtains assurance of steady and increasing revenue which it invests in building up the bureaucracy and infrastructure. This growing public investment not only help boost the GDP but also provide the political regime with means to buy off loyalty of bureaucracy and civic society. Regimes then use the RMG-fueled state and civic power to suppress political opposition and stage ‘managed’ elections. We have witnessed these intimately related events again and again in recent years, most notably in Cambodia, another RMG-dominated country, where the ruling regime just staged an election in 2018 where it ‘won’ hundred percent of the seats.

Many technology, economics analysts have argued recently recently that Bangladeshi garments industry is a prime candidate for severe incoming disruption from automation. Development of new automation technology, changes that are now within realistic realm, can wipe away advantages of cheap labor at a stroke and render millions of garments workers jobless worldwide. The spectacular growth of garments industry in Bangladesh explains source of the dominating power the ruling regime has over political opponents. At the same time, the uneven economic and social development from this industry and the very precariousness of the industry’s future, help us understand why there is simmering discontent among aspiring citizens. The puzzle of repression during times of plenty, is not so baffling after all.

 

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A Historic Picture (and some reminiscences about 1971 BD War)


From Dr Hamid Hussain

IMG_1589 (005)

General Sam Manekshaw speaking to two Pakistani Air Force officers in plane bringing him to Pakistan for negotiations after 1971 Indo-Pakistan war. Gentleman sitting in suit is a public relations officer of Indian Ministry of Defence and gentleman standing in white overall is a sergeant of the Indian Air Force. Photograph courtesy of Brigadier Behram Panthaki.

This picture is dated 29 November 1972, when Indian army Chief General (later Field Marshal) Sam Manekshaw flew to Pakistan for negotiations after 1971 Indo-Pakistan war. The two Pakistani Air Force (PAF) officers were prisoners of war and brought by Sam as a good will gesture. Both officers were shot down in western theatre of war. The one near Sam with handle bar moustache (matching Sam’s own impressive moustache) is then Squadron Leader Amjad Ali Khan. His F-104 was shot down on 05 December 1971 by anti-aircraft fire while attacking Amritsar Radar. He retired as Air Vice Marshal. The other officer is then Flight Lieutenant Wajid Ali Khan. His F-6 was also shot down by anti-air craft fire during a close air support mission over Marala headworks on western border. After repatriation, he left air force and settled in Canada. He became member of Canadian parliament serving from 2004 to 2009.

Indian Air Force (IAF) TU-124 VIP plane brought Sam Manekshaw to Lahore. When plane was taxing to reach the parking bay, it passed the skeleton of the burnt Indian Airlines Fokker Friendship aircraft, ‘Ganga’, that had been hijacked on January 30, 1971 on its flight from Srinagar to Jammu and brought to Lahore. On February 02, the hijackers had set the aircraft on fire. Sam was received by Pakistan Army Chief, General Tikka Khan. Tikka was wearing his famous dark glasses. Continue reading “A Historic Picture (and some reminiscences about 1971 BD War)”

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Bangladesh elections

Update: This win seems too big to be credible. But I don’t really know…. Bangladesh Prime Minister Wins 3rd Term Amid Deadly Violence on Election Day

End Update
Bangladeshis Must Choose ‘Lesser of Two Evils’ in Election:

Per capita income has increased by nearly 150 percent, while the share of the population living in extreme poverty has shrunk to about 9 percent from 19 percent, according to the World Bank.

Electricity generation has also increased drastically under Mrs. Hasina’s rule, helping to boost factory production and spreading out to homes in rural areas. The rates of maternal mortality and illiteracy have also declined.

Sultana Kamal, a Bangladeshi activist who was once close to Mrs. Hasina but has become increasingly wary of her, said a win by the current government would be seen as an indifference by voters to rights concerns.

From what I know most of my family generally supports the Awami League. My parents do, and I have an uncle who is an activist in that party. As an atheist I sympathize more with parties less keen on allying with Muslims who are excited to kill atheists. But….the Awami League seems to have gotten quite a big head, and Sheikh Hasina is becoming Bangladesh’s Indira.

If it’s the choice between economic growth and human rights, I think voters would choose the former. But I suspect that many will bet that economic growth is due to endogenous forces which are not controlled by the government, and will switch parties to rebalance the political system.

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An Interview on Bangladesh Street Protests

I think this short interview about Bangladesh Street protests pretty much sums up what is going on in Bangladesh. The interview led to predictable and dire consequences for the person foolish enough to speak his mind about Bangladesh to the foreign media while living within Bangladesh! I am posting the transcript of the interview and then posting the video.

Q: These protests were sparked by two teens who were killed in a road accident but is this all about road safety or is there something larger going on?

A: Very much larger. This has been going on for a very very long time. It is an unelected government so they do not really have a mandate to rule, But they have been clinging on by brute force. The looting of banks, the gagging of the media. You mentioned just now the mobile internet is currently switched off, the extra-judicial killings, the disappearances, the need to give protection money at all levels, bribery at all levels, corruption in education. It is a never ending list. It has been huge.

So it really it is that pent up energy, emotion, anger, that has been let lose. This particular incident, sad as it is, really is the valve that has allowed things to go through. Very recently there was another very big protest about the quota because the quota system is rigged in such a way that only people close to the party in power get to get government jobs and there is a disproportionate amount of jobs going to them so ordinary people protested. And that was very brutally brought down.

Under pressure the prime minister offered reforms but them reneged on them. So that is also part of the reason. So this time when students did go on protests, again it went to a situation where they could not control it and the Prime minister has promised that she will cede to their demands, but of course people no longer believe. She has no credibility. She has made promises before, it has not been accepted, so now they don’t do it.

But I think what we need is to look at is what is happening in the streets today. The police specifically asked for help from these armed goons to combat unarmed students demanding safe roads. I mean now ridiculous is that. Today I was in the street and there are people with machetes in their hands chasing unarmed students and the police are standing by watching it happen. In some cases they are actually helping it out. I mean …. this morning, there was tear-gassing and I saw the police ganging up trying to catch these un-armed students, whereas these armed goons, are going out, wielding sticks and machetes, are walking past and they [the police] are just standing by.

Q: So where do you think these things are going to go from here? These protests appear to have spread across the country quite spontaneously and without any kind of central leadership here. This is part of the challenge the government is dealing with, in that it is so grass-roots in the way that it has spread.

A: I think the Government has miscalculated. It certainly felt that fear was enough, repression would have been enough, but I think you cannot tame an entire nation in this manner. And of course they are approaching elections, so the nearer it gets to elections, the more sensitive they are. They know that if there is a fair and free election, they will lose. But they haven’t got an exit plan as they have misruled for so long so that if they do lose, they will be torn apart. So they have to hang on by any means, so that is exactly what they are doing. They are clinging on using the entire might of the system plus the armed goons at their disposal.

 

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Killing Atheists. A Wedge Issue in Bangladesh

Yet another Bangladeshi blogger has been hacked to death. This is the third time in just the last two months that someone has been hacked to death in BD for being an “atheist blogger”.

The victims:
1. Ananta Bijoy Das

2. Avijit Roy

3. Washiqur Rahman

Two born Hindu, one Muslim, all three known to be associated with Bangladeshi rationalism and “freethought” and in particular with the freethought blog “Mukto-Mona”. 

Someone with more local knowledge can comment about them and add their tributes. I wanted to focus on a more general issue: Why kill these bloggers? As Bond noted, the first time is happenstance, the second time coincidence, but the third time, it’s enemy action. This is not just some random Muslim fanatic getting riled up and going to earn his virgins. This is a systematic campaign…and it makes a lot of sense. These killings are a near-perfect “wedge issue” for Bangladeshi Islamists. How does that work?

1. Bangladesh is a relatively liberal Islamic country. There is a significant Hindu minority (though it shrank somewhat at partition and then again, drastically, during the anti-Hindu genocide of 1971) and thanks to strong traditions of secular Bengali nationalism and old-fashioned (i.e. not Post-Marxist Western elite and University imported) Left wing activism, there is a significant Muslim Bengali secular tradition. Another factor is the fact that when the Awami League led the Bangladesh liberation movement against West Pakistan, the West Pakistani army was supported by the main Islamist party and its cadres provided the volunteers who were their eyes and ears (and in many cases, their eager executioners).
After independence, as a “right-wing” Bangladeshi political grouping developed with military (and Pakistani, Saudi and possibly CIA) assistance, it was provided crucial support by the Islamists and in return their successive regimes provided assistance to the Islamists and protected them against prosecution for war crimes. At the height of the honeymoon between Islamists, the Pakistani intelligence agencies, Saudi Arabia and the CIA, this right-of-center alternative (first as military rule, then as the BNP) established itself firmly as one half (and for much of that time, the dominant half) of Bangladeshi politics. Since then, things have changed. Saudi Arabia is now somewhat conflicted about the Islamists and at a minimum, distinguishes between “good Islamists” (who behave themselves and support the royal family) and “bad Islamists” (who prefer to go the whole hog and aim to replace the royal family with a more authentic Islamist alternative). Pakistan and the CIA are no longer BFFs (though wary cooperation and buying and selling continues). And Western powers are not entirely happy with Islamism. As a result, the playing field in BD seems to have tilted towards the Awami League and towards relatively secular Bangladeshi nationalism. In the nature of things, the BNP or some such will still be needed to provide the other half of a stable two-party electoral system, but their Islamist allies are under some pressure. There is even the possibility that the BNP will have to carry on without hardcore Islamist cadres being sheltered under its umbrella and will have to (perhaps as an “India-skeptic” critic), go along to some extent with a new “India-friendly” regional order.
2. But there is another alternative. Is there some way the Islamists can recover and even win new heights they did not possess even under BNP regimes in the past?
3. Some of them, and perhaps some of their backers in Pakistan and Saudi Arabia (in Saudia, more in the private sector than in the government? who knows) seem to think so. And they are using these killings as a wedge issue.
4. By going after atheist bloggers (many or most of them Hindus), they have found a near perfect wedge issue. The Hasina government is not happy with these blasphemers being killed, and unlike in Pakistan, the regime seems to have made some arrests. But if they take a very public stand against these killings and aggressively protect the rights of these free-thinkers, then they stand with atheists and blasphemers and risk losing the support of “moderate Muslims” who don’t go in for machete-wielding execution, but whose core beliefs include the belief that atheism and apostasy cannot be tolerated….But if the Hasina government lets this go on, then they permit the Islamists to grab the initiative and drive away atheists, secularists and Hindus…all of whom are more or less her voters and supporters (and whose friends and supporters are also the “intellectuals” of the Awami League regime). At a minimum, it is an uncomfortable position for the regime.
5. Moderate Muslims may condemn free-lance executions, but such executions also bring to light the existence of atheists, Hindus and blasphemers in what is, after all, a Muslim majority country. For the moderate Muslim the best thing would be for this conversation to just go away. The longer it goes on, the more they have to commit to options they don’t like: should they come down in favor of Hindus, atheists and blasphemers (not necessarily in that order, but all these items are uncomfortably connected in mukto-mona)? Or, when push comes to machete-shove, do they stay silent and “understand” that the blasphemers have sorely provoked their Muslim executioners? whatever they decide, the discomfort is a net plus for the Islamists. They are betting on the fact that by making this an “Islam versus atheism/Hinduism” issue they make it hard for moderate Muslims to chose atheism and Hinduism over Islam.
6. With the penetration of bullshit-postmarxism into the Bengali elite increasing as their access to expensive Western education increases, the “high-end secularists” can be split too. “Black and White” division of the world between Islamists and anti-Islamists is anathema to postmodern-postmarxism. They too would prefer to opt out of this “complex and nuanced” issue. Their discomfort is an added bonus to the Islamist cause (of relatively little practical importance, but these people have some visibility in high-end intellectual circles, so their discomfort doesn’t hurt either).

Can Bangladeshi secularism (meaning in practice, the Awami League regime, there being no other secular alternative on the horizon) defeat this rather well-chosen point of attack? Maybe they can (in which case the Islamists will have gambled and lost and the secular cause will emerge stronger than before). But it is a big if…If they lose, Bangladesh is in play again as a possible Islamist base in Eastern India. The Islamists know what they are up to…

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