The economics of it all

A few months ago Finance Minister A M A Muhith reminded us how during a meeting of the WTO he had been advised by his peers to redefine thrust sectors and reduce dependence on exports. Ostensibly this was to allow local industry to grow and as they would have us know, preferential exports could not be indefinite. The reality is that the developed world needs to create jobs and to pots with the concept of fairness and fair trade.

For decades the developed world has been trying to prise open the very protected and lucrative Indian and Chinese markets. To a large extent they have succeeded. The death of previously flourishing brands has been collateral damage. In return India secured their nuclear ambitions without signing up to the non-proliferation treaty. Since then and the world economic meltdown there has been a procession of world leaders trying to out do each other in wooing India for lucrative contracts -- thereby consolidating precious jobs.

China gained by not having to cave in to pressure to devalue its currency and also assisting in addressing the trade imbalance. With a market bigger than India and on the verge of becoming the largest economy in the world, China had the enviable task of cooling its heating growth. Armed individually with the largest reserve of foreign currency, China forayed into Africa and interesting treaties with Association of South East Asian Nations (ASEAN) even as the U.S. and Europe became embroiled in essentially senseless wars.

Strangely enough, with most of the Eurozone struggling in managing deficits and propping up economies, Germany, the one country that cannot participate in wars, is the only engine of growth. With its own problems emerging, the UK is on the verge of withdrawing from the common market. This is the country that, as far back as the late sixties supported 'buy British' policies. Yet all of Europe seeks opportunities of exports mainly due to dwindling markets -- one result of low or negative population growth rates.

With the new Modi government clearly insistent on a 'make in India' campaign as a manufacturing and production hub the western thought process is in a quandary. If India tags relocation or makes it conditional for contracts there will be issues involved. Of greater import for Bangladesh is the competition becomes mammoth given the superior infrastructural facilities the bigger neighbour has. Add to that Myanmar's transformation from the whipping boy to the blue eyed boy status provides new options for investors, even for India and the equation becomes further lopsided.

The repercussion is a rapid re-innovation that suits our abilities. The country's next draft five year plan will hopefully address this. Its remarkable successes in the face of adversity has been based on identifying and addressing issues though most progress has come from the exceptional entrepreneurial ideas and activities of citizens. Forward planning for the challenges of the future will require new thinking. Relocation of sunset industries has been unusually slow. The brain-drain continues unabated resulting in existing industries being forced to look for expatriates in positions that should and could be occupied by our own.

In between the standard of basic education has come under uncomfortable scrutiny. Unless addressed dispassionately the clouds in the horizon will loom darker.

(e-mail: mahmudrahman@gmail.com)