Dictating terms

The so-called 'leaning' syndrome on smaller states and government so that they and those who are doing the leaning can see eye to eye, has changed. The polite subterfuge has disappeared to be replaced by brash directness and disagreements go beyond the cloistered corridors of diplomatic nicety. The latest one to be 'leaned' on is obviously Bangladesh and the 'leaners' are no less than the US government and the International Monetary Fund (IMF). If what is being reported is true and the between-the-lines summation of any import, the government may well be forced in to taking some painful but major decisions. The IMF is unimpressed by the growing subsidy tab that is being picked up. They want fuel prices to go up, thereby, reducing subsidies that are being paid and electricity rates, to be hiked, much more than that has happened so far. Their concern essentially is that fuel prices lower than those in India will culminate in inevitable smuggling. The contrary view is that too high a hike makes it unaffordable to the people and, linked strongly to this, is general inflation as it adds premium to the cost of food. The cost of electricity, hiked recently, also has an impact. As it is, power is one of the priority commitments of the government and though affordability is not, it is a natural corollary. No one has so far thought of the price at which fast track electricity generation will be available. That's where the government gets caught between a rock and a hard place. The knot that has developed over a special $ 1.0 billion loan is fast becoming unretractable unless a compromise is found. The IMF and others may not be viewing the realities of the country from the same angle. Agriculture, the country's life-blood is strongly linked with electricity and especially diesel-run irrigation pumps. The government bent backwards even to the extent of telling the inhabitants of cities that they would have to put up with longer and frequent power-cuts for the sake of the next crop. That is a sensible and realistic decision in the interim even as measures to fast-track new power plants are underway. The IMF has a point of view skewed towards the inevitable slashing of the Annual Development Programme (ADP). The argument that development is being short-charged by subsidies, has merits. But while the peripheral enjoying by a few of electricity subsidies is true, let it not be missed that power is required by businesses and farmers alike. And if power becomes too expensive, the impact on cost of production cannot but result in further pressure on the end-user consumer. It's a vicious circle that has to be addressed innovatively so as to prevent political and social fallout. That by itself is an unenviable task. (The writer can be reached at mahmudrahman@gmail.com)