Sweeping reforms in admin a must for growth
Thursday, 14 August 2008
Unlike in the colonial past, government is no more purely a command structure bound by a system of strict regulations, which the powers that be would use to rule the subjects. The most obvious changes, however, have come in the way it looks at economic activities, particularly business. In fact, the best governments are those that govern least, especially in matters of managing the economy.
However, that the changes have not been brought in a day. Through trial and error, the advanced democracies gradually reduced the functions of their governments in running the affairs of the economy, through a set of regulatory reforms. Some newly emerging economies in the third world have also been reaping the benefits of such reforms in their respective regulatory frameworks. But in spite of such reforms, things are not progressing as fast as it should. In most cases, the executive organ of the government, the bureaucracy, is coming in the way. In Bangladesh, in particular, the bureaucracy is yet to shed its colonial trappings and embrace the changes in a whole-hearted manner. As a result, the country has not been able to fully harvest the fruits of economic liberalisation. What is most surprising on this score is that we are lagging behind even some command economies like Vietnam in attracting foreign investments in the economy, let alone the democratic India, which started its deregulation about a decade after Bangladesh.
Our experiments with democracy, especially during the 1990s and the first half of the current decade, too, have left us with few legacies to take pride in so far as the economic growth is concerned.
The other day, speakers, mostly from the business community, at a function to launch the Regulatory Reforms Core Group, again underscored the importance of a proactive bureaucracy in stimulating the private sector growth of the economy, especially in facilitating foreign direct investment (FDI). They referred to the cases of China and India. Though China is not a democracy, it has achieved an economic feat with help of its proactive bureaucracy that even the democratic India envies. The lesson is democracy, too, is not enough condition that an economy will succeed unless the executive organ of the government also extends its cooperation. The lesson is universal, whether in the East Asia, the Middle East or in any other region of the world.
It is often said that Bangladesh provides the best incentives to the overseas investors and that the regulatory framework under which the foreign investors would work here is also very liberal. But when the government leaders utter these words, they only express their good intentions. However, when one gets down to business, the entire perspective changes. On the ground, one would again find the age-old bureaucracy, which is mostly a throwback to the colonial times. The mindset of the bureaucratic juggernaut has hardly changed. The same old syndrome of red-tape and various other delay tactics and pervasive corruption have been dogging the entire bureaucratic organ of the government. In consequence, the economy is still slogging away at a snail's pace.
In spite of its protracted experience with deregulations and democracy, Bangladesh, in all likelihood, is still an anachronism in this era of globalisation. While we are still sitting, as it were, on the fence and watching, most of its neighbours have joined the economic race of outdoing one another.
To be frank, the need for the growth of our economy is not just a matter of prosperity in the lives of the people. In fact, growth, and that, too, at an accelerated rate, is a matter of life and death for us, because that is the only way to provide jobs to the millions of hands joining the ever-swelling ranks of the masses of the unemployed day in, day out. And to achieve that the reforms in the government's administrative structure have to be deeper, faster and more sweeping.
However, that the changes have not been brought in a day. Through trial and error, the advanced democracies gradually reduced the functions of their governments in running the affairs of the economy, through a set of regulatory reforms. Some newly emerging economies in the third world have also been reaping the benefits of such reforms in their respective regulatory frameworks. But in spite of such reforms, things are not progressing as fast as it should. In most cases, the executive organ of the government, the bureaucracy, is coming in the way. In Bangladesh, in particular, the bureaucracy is yet to shed its colonial trappings and embrace the changes in a whole-hearted manner. As a result, the country has not been able to fully harvest the fruits of economic liberalisation. What is most surprising on this score is that we are lagging behind even some command economies like Vietnam in attracting foreign investments in the economy, let alone the democratic India, which started its deregulation about a decade after Bangladesh.
Our experiments with democracy, especially during the 1990s and the first half of the current decade, too, have left us with few legacies to take pride in so far as the economic growth is concerned.
The other day, speakers, mostly from the business community, at a function to launch the Regulatory Reforms Core Group, again underscored the importance of a proactive bureaucracy in stimulating the private sector growth of the economy, especially in facilitating foreign direct investment (FDI). They referred to the cases of China and India. Though China is not a democracy, it has achieved an economic feat with help of its proactive bureaucracy that even the democratic India envies. The lesson is democracy, too, is not enough condition that an economy will succeed unless the executive organ of the government also extends its cooperation. The lesson is universal, whether in the East Asia, the Middle East or in any other region of the world.
It is often said that Bangladesh provides the best incentives to the overseas investors and that the regulatory framework under which the foreign investors would work here is also very liberal. But when the government leaders utter these words, they only express their good intentions. However, when one gets down to business, the entire perspective changes. On the ground, one would again find the age-old bureaucracy, which is mostly a throwback to the colonial times. The mindset of the bureaucratic juggernaut has hardly changed. The same old syndrome of red-tape and various other delay tactics and pervasive corruption have been dogging the entire bureaucratic organ of the government. In consequence, the economy is still slogging away at a snail's pace.
In spite of its protracted experience with deregulations and democracy, Bangladesh, in all likelihood, is still an anachronism in this era of globalisation. While we are still sitting, as it were, on the fence and watching, most of its neighbours have joined the economic race of outdoing one another.
To be frank, the need for the growth of our economy is not just a matter of prosperity in the lives of the people. In fact, growth, and that, too, at an accelerated rate, is a matter of life and death for us, because that is the only way to provide jobs to the millions of hands joining the ever-swelling ranks of the masses of the unemployed day in, day out. And to achieve that the reforms in the government's administrative structure have to be deeper, faster and more sweeping.