Dialogue on economy
Tuesday, 11 September 2007
Qazi Azad
HARDLY any Bangladeshi having focused attention on the future and a thoughtful deductive mind could restrain the self from being delighted on reading Thursday morning, September 6, national newspapers.
The newspapers of the day informed us that some of our business leaders talked brilliantly on the current economic issues with substance and logic with the government leaders, who were willing to listen. The assembly of minds from the business and those at the helm, for a dialogue on the economy, which was prudently arranged the previous day by the government, was thus significantly useful. When its business talks eloquently with irrefutable logic, that's a sure indication that the nation concerned has come or on the verge of coming of age.
One prominent business leader warned in that meeting about the creeping prospect of stagflation. Drawing attention of the government leaders to the falling rate of investment, rising interest rates and tight monetary policy, he said the economy is sliding towards a stagflation with inflation and an economic stagnation concurrently at play. He also mentioned about panic haunting business, due to sudden strident corrective drives by various official agencies, having created a serious danger of reduced import and shortfall in commodity supply in this predominantly import-dependent economy.
What he insisted on for the government leaders to take note of is that an element of suppressed fear in the business circle has been decapacitating the economy. He clearly meant to say that shock might be a curative therapy but it can also be a killer if applied disproportionately or without assessing the health status of the patient.
As the pain-threshold of a formative economy, as the one in this country, built not always on clean money, is little, the latter deduction about too much shock therapy for establishing absolute discipline in one go, which is likely to prove to be a killer, is not a wishful thinking. Hopefully, the premonition about the emergent economic problem will encourage immediate all-out actions to abort the monster in the making.
Even the former colonial powers still dread the slightest mention about the moral issue of returning their plundered wealth to the formerly exploited nations. They have floated aid and trade packages to atone for their previously committed guilt. Perhaps, the former colonial powers also dislike the prospect of accountability for their guilt with retrospective effect.
One business leader complained "businesses are being harassed by seven to eight regulatory, taxation and law-enforcement agencies at once, which is preventing the entrepreneurs from running their businesses". Another supplemented it while arguing "It is not that businesses want the anti-corruption drive to stop, but they expect it to be carried out without sending a wave of panic through the entire range of business activities in the country".
Governance, which also involves managing the economy and its unhindered fast growth, is predominantly a creative art. Visionary leaders do it pragmatically like adept masons who raise magnificent buildings with bricks, rods and cement. They retain all the broken bricks, which are accidentally fragmented and broken by choice as required for the job of construction. They use these at convenient points where broken bricks of varied shapes are necessary for raising the new building under construction.
On a review, it would appear that in the 15 years of the democratic rule, commencing from 1991, much of the money, which had been acquired in questionable ways, was ploughed in the economy. It supported enhanced economic growth. While the means adopted for the acquisition of those money was undesirable, their investment in the economy was clearly not bad, as evident from higher rate of economic growth. It's like Mogul emperor Shahjahan erecting the Taj Mahal with money extracted from his exploited subjects. Yet Rabindranath Tagore -- our Guru poet -- composed a great poem admiring the emperor for raising the monument, "You are larger than your achievement; that is your chariot of life". Perhaps, when the follies of individuals are dwarfed by their achievements, they earn forgiveness. Otherwise, what would be the justification behind the saying "To err is human"?
The government may act promptly, as outlined in the discourse on the economy, held at Dhaka last Wednesday to reinforce economic growth and save jobs. By disclosing in the dialogue the official decision to form a forum for joint consultation of the government leaders and the business community on economic issues having relevance with business -- Bangladesh Better Business Forum, Chief Adviser Dr. Fakhruddin Ahmed has wisely indicated that he is for useful governance. His decision to form a high-level committee for reforming the regulatory framework governing the private sector and for taking steps for capacity-building of the Board of Investment, Bangladesh Export Promotion Bureau and Bangladesh Export Processing Zone Authority (BEPZA) would also help the purpose of better business provided planned efforts are made in this direction to actually enhance the capacity of the organisations.
The Board of Investment has so far proved not adequately capable of discharging its highly demanding complex functions. It is evident from its inordinate delay in the disposal of the major foreign investment proposals regarding setting up of some industrial establishments. It should have reliable internal capacity to quickly assess merits and demerits of every such proposal on its own. The anticipated capacity may also have an umbrella within its fold for meaningful consultation with local experts on such proposal in order to be able to promptly suggest proper action to the government -- either acceptance or rejection of a proposal. Much of the embarrassment with Tata's investment proposal, resulting from an unusually long delay in conveying the final position on, could be avoided if the board could quickly assess whether the known gas reserve position permitted even acceptance of the proposal for examination. It should have known that no nation can make a firm commitment to a foreign company relying on a possibility, instead of a reality.
How well thought-out the intended capacity-building measures would be and how faithfully these would be implemented will decide the quality of their impacts upon these organisations. We will have to go beyond the periphery of the talking shop, like seminars, discussion programmes and workshops, and enter firmly with a high degree of commitment into the domain of concrete actions, such as careful manpower reshuffle and proper recruitments, to create the desired capacity in those organisations. At least half of the higher-level manpower of both the board and the BEPZA should have academic backgrounds relevant to the nature of investment proposals usually received from foreign investors.
The army chief, General Moeen U Ahmed, suggested an 11-point plan of action in the dialogue, which also indicated that the government is willing to listen to, and act on, constructive suggestions. His proposal for a financial dividend scheme for all private sector businesses and self-employed persons is very realistic in so far its promise to make contributions to social stability is concerned. It may also significantly encourage financial risk-taking in new ventures, which is essential for negotiating new areas of industrial and other productive activities. His emphasis on the need for raising the skill levels of manpower, meant for foreign employment, may be followed by a plan of action. Perhaps, the army is institutionally organised better to successfully play the pivotal role in this regard.
In short, the government should take a long view of the future and dispassionately find out what kind of actions and inactions in the short run would decisively influence our future positively. Its over-all plan of action should accommodate only such measures that promise positive dividends and no serious social instability. Otherwise, we may inadvertently step into some dangerous traps of invisible quicksand.
HARDLY any Bangladeshi having focused attention on the future and a thoughtful deductive mind could restrain the self from being delighted on reading Thursday morning, September 6, national newspapers.
The newspapers of the day informed us that some of our business leaders talked brilliantly on the current economic issues with substance and logic with the government leaders, who were willing to listen. The assembly of minds from the business and those at the helm, for a dialogue on the economy, which was prudently arranged the previous day by the government, was thus significantly useful. When its business talks eloquently with irrefutable logic, that's a sure indication that the nation concerned has come or on the verge of coming of age.
One prominent business leader warned in that meeting about the creeping prospect of stagflation. Drawing attention of the government leaders to the falling rate of investment, rising interest rates and tight monetary policy, he said the economy is sliding towards a stagflation with inflation and an economic stagnation concurrently at play. He also mentioned about panic haunting business, due to sudden strident corrective drives by various official agencies, having created a serious danger of reduced import and shortfall in commodity supply in this predominantly import-dependent economy.
What he insisted on for the government leaders to take note of is that an element of suppressed fear in the business circle has been decapacitating the economy. He clearly meant to say that shock might be a curative therapy but it can also be a killer if applied disproportionately or without assessing the health status of the patient.
As the pain-threshold of a formative economy, as the one in this country, built not always on clean money, is little, the latter deduction about too much shock therapy for establishing absolute discipline in one go, which is likely to prove to be a killer, is not a wishful thinking. Hopefully, the premonition about the emergent economic problem will encourage immediate all-out actions to abort the monster in the making.
Even the former colonial powers still dread the slightest mention about the moral issue of returning their plundered wealth to the formerly exploited nations. They have floated aid and trade packages to atone for their previously committed guilt. Perhaps, the former colonial powers also dislike the prospect of accountability for their guilt with retrospective effect.
One business leader complained "businesses are being harassed by seven to eight regulatory, taxation and law-enforcement agencies at once, which is preventing the entrepreneurs from running their businesses". Another supplemented it while arguing "It is not that businesses want the anti-corruption drive to stop, but they expect it to be carried out without sending a wave of panic through the entire range of business activities in the country".
Governance, which also involves managing the economy and its unhindered fast growth, is predominantly a creative art. Visionary leaders do it pragmatically like adept masons who raise magnificent buildings with bricks, rods and cement. They retain all the broken bricks, which are accidentally fragmented and broken by choice as required for the job of construction. They use these at convenient points where broken bricks of varied shapes are necessary for raising the new building under construction.
On a review, it would appear that in the 15 years of the democratic rule, commencing from 1991, much of the money, which had been acquired in questionable ways, was ploughed in the economy. It supported enhanced economic growth. While the means adopted for the acquisition of those money was undesirable, their investment in the economy was clearly not bad, as evident from higher rate of economic growth. It's like Mogul emperor Shahjahan erecting the Taj Mahal with money extracted from his exploited subjects. Yet Rabindranath Tagore -- our Guru poet -- composed a great poem admiring the emperor for raising the monument, "You are larger than your achievement; that is your chariot of life". Perhaps, when the follies of individuals are dwarfed by their achievements, they earn forgiveness. Otherwise, what would be the justification behind the saying "To err is human"?
The government may act promptly, as outlined in the discourse on the economy, held at Dhaka last Wednesday to reinforce economic growth and save jobs. By disclosing in the dialogue the official decision to form a forum for joint consultation of the government leaders and the business community on economic issues having relevance with business -- Bangladesh Better Business Forum, Chief Adviser Dr. Fakhruddin Ahmed has wisely indicated that he is for useful governance. His decision to form a high-level committee for reforming the regulatory framework governing the private sector and for taking steps for capacity-building of the Board of Investment, Bangladesh Export Promotion Bureau and Bangladesh Export Processing Zone Authority (BEPZA) would also help the purpose of better business provided planned efforts are made in this direction to actually enhance the capacity of the organisations.
The Board of Investment has so far proved not adequately capable of discharging its highly demanding complex functions. It is evident from its inordinate delay in the disposal of the major foreign investment proposals regarding setting up of some industrial establishments. It should have reliable internal capacity to quickly assess merits and demerits of every such proposal on its own. The anticipated capacity may also have an umbrella within its fold for meaningful consultation with local experts on such proposal in order to be able to promptly suggest proper action to the government -- either acceptance or rejection of a proposal. Much of the embarrassment with Tata's investment proposal, resulting from an unusually long delay in conveying the final position on, could be avoided if the board could quickly assess whether the known gas reserve position permitted even acceptance of the proposal for examination. It should have known that no nation can make a firm commitment to a foreign company relying on a possibility, instead of a reality.
How well thought-out the intended capacity-building measures would be and how faithfully these would be implemented will decide the quality of their impacts upon these organisations. We will have to go beyond the periphery of the talking shop, like seminars, discussion programmes and workshops, and enter firmly with a high degree of commitment into the domain of concrete actions, such as careful manpower reshuffle and proper recruitments, to create the desired capacity in those organisations. At least half of the higher-level manpower of both the board and the BEPZA should have academic backgrounds relevant to the nature of investment proposals usually received from foreign investors.
The army chief, General Moeen U Ahmed, suggested an 11-point plan of action in the dialogue, which also indicated that the government is willing to listen to, and act on, constructive suggestions. His proposal for a financial dividend scheme for all private sector businesses and self-employed persons is very realistic in so far its promise to make contributions to social stability is concerned. It may also significantly encourage financial risk-taking in new ventures, which is essential for negotiating new areas of industrial and other productive activities. His emphasis on the need for raising the skill levels of manpower, meant for foreign employment, may be followed by a plan of action. Perhaps, the army is institutionally organised better to successfully play the pivotal role in this regard.
In short, the government should take a long view of the future and dispassionately find out what kind of actions and inactions in the short run would decisively influence our future positively. Its over-all plan of action should accommodate only such measures that promise positive dividends and no serious social instability. Otherwise, we may inadvertently step into some dangerous traps of invisible quicksand.