Deadly games: Capricious politics and endangered economies

Mizanur Rahman Shelley The World seems to have become hostage to the caprice and whims of a bunch of playful children. Politicians in different countries are stubbornly sticking to their stands on political, ideological or even personal grounds driving national economies to serious dangers. A look at the USA today is enough to convince one of the hazards of political rigidity. The 'stand-off' brought forth by the contradictory positions assumed by the Democrats and the Republicans has resulted in, what is described as the 'shut-down' of the Federal government for the first time in 17 years. The bone of contention is Democrat President Obama's 'Bill of Health Care'. According to his promise he had the law enacted for providing health insurance to the poor in the USA. It got budgetary approval of the Senate which is dominated by the Democrats. But a pre-dominantly Republican Lower House of the US Congress, the House of Representatives has refused to pass the budget without amendments of the 'Health Care Bills' which the Republicans sarcastically call 'Obama Care Bill'. As the deadline reached on Monday, 30 September, the two sides refused to give ground. No reconciliation could be agreed upon. Consequently, the Federal government did not get its budget approved and there was a partial shutdown of the government. As a result, some 700 thousands Federal employees went home, compelled to take leave without pay. Many services such as those of tourist facilitators in national Monuments and Parks and regulators of some Capital Markets had to be discontinued. Even intelligence organisations, such as the CIA, were compelled to go on without the services of its 70 per cent officials and employees. Curiously, though the poor Federal employees would be without their salaries and perks Congressmen would continue to be in office with their salaries and privileges. This miserable state of affairs will persist until one of the parties 'blinks first' and a compromise is reached. Last time, this happened was in 1995-1996 and continued for some 22 days. One expects that the same or similar time will be necessary to resolve the dispute. This unusual state of affairs in the States is causing astonishment in the world at large. To many, it may seem amusing that the mighty and immensely prosperous USA should find itself in such a curious situation. Experts say that if the shutdown goes on for a longer period, it will lead to considerable loss to the national economy. In fact, according to one calculation it may amount to a significant percentage of the US GDP (gross domestic product). In the long run it may affect other actors in the global economy. President Obama has already cancelled his tour of Indonesia, Malaysia and the Philippines, where he was scheduled to discuss and decide important issues of cooperation between US and Asia-Pacific countries. Again, as a result of the shutdown talks between the US and European Union on a Free-Trade zone on the model of NAFTA (North American Free Trade Agreement) has been put "on hold". A greater danger to the world economy is posed by a possible US default of its debts servicing if the nation's debt-ceiling is not raised by the Congress within the stipulated time because of the shutdown. The world in the grip of a global downturn that has been haunting it from 2008 can ill-afford such problems that are evidently avoidable. The US, more than any other nation, should realise that this is the least suitable time for playing with the economy for the sake of politics. The US failure to service its debts is likely to have dire consequences for the global economy. A world already suffering the lingering impact of a global recession can ill-afford to bear added burdens. One can only hope that good sense will prevail before it is too late. Democratic politics gives ample scope to the self-willed and whimsical politicians to indulge in childish stubbornness. Such childish games create havocs in the economies and condemn billions to untold miseries. GLOBAL SITUATION: The scenario is not confined to the USA alone, we find similar situations in other prosperous regions of the world and in areas that are relatively backward and impoverished. Thus, at one end, we find countries of European Union, such as Italy, often being exposed to economic owes on account of political gambling. Thus, seven months ago Italy, the third largest economy in the European Union, had great political problems and went without a cabinet. Then the centre-right and centre-left formed an unprecedented coalition government. This stimulated the ailing economy of the country. The capital market came alive and the national economy got a boost. A few days ago, attempted machinations by former Prime Minister Silvio Berlusconi threatened to bring down the coalition government resulting from the withdrawal of his party. His efforts were abortive as his close lieutenants in the party refused to do his biddings. The coalition government survived and the Italian economy got a fresh lease of healthy life. BANGLADESH SITUATION: Bangladesh is an example on the other side of the spectrum. An economically struggling nation, showing promising signs of development, it is, unfortunately, beset by seemingly irreconcilable political disputes. The ruling Awami League and the principal opposition party BNP are rigidly opposed to each other on what are claimed to be ideological differences. However, their stand on the question of the appropriate mechanism of holding national elections is the immediate bone of contention. The ruling party is determined to have the national elections, which are knocking at the door, to be held under the incumbent party government. This, it says, is the dictate of the Constitution as modified by the 15th amendment which the Awami League itself had effected. The opposition BNP steadfastly sticks to its demands for elections under a non-partisan, neutral caretaker or interim government. The political divide had been haunting the nation even before the dispute regarding caretaker government came to a head. Wide chasms separate not only the warring political forces but also the professionals, business groups and bureaucracy. The nation seems on the verge of polarisation on political bases. This, in the mid- and long-term is dangerous to the health of the national economy and detrimental to its development. Political contentions and uncertainties regarding election are putting the nation's economic progress on hold. Domestic and foreign investments have been drastically reduced. Banks, especially the state-owned commercial banks (SoBs), have been jarred by massive scams, such as the Hall-Mark, Destiny and Bismillah group scandals. Yet, they are overflowing with idle money. The present uncertainties in politico-social context have made enterprisers doubtful and shy. Nearly Tk 70 billion (seventy thousand crore) lies in the Banks, while business and industries totters weakly on their shaky paths. Bangladesh has so long done fairly well, despite the global recession. It is doubtful whether the country can continue to insulate itself against any more reverses in the global economy. Its uncertain politics may drive the nation to the edge of an economic abyss. The sooner the decision-makers and top managers of politics realise the possibility of the imminent danger of politics of stubbornness, the better it will be for the economic future of our nation. Dr. Mizanur Rahman Shelley, author, founder Chairman of Centre for Development Research, Bangladesh (CDRB) and Editor, quarterly Asian Affairs, was a teacher of Political Science at the University of Dhaka, a former member of the erstwhile Civil Service of Pakistan (CSP) and former non-partisan technocrat Cabinet Minister of Bangladesh. [email protected]