The legacy of promises and hopes
Friday, 26 December 2008
Syed Fattahul Alim
What kind of an economy is the caretaker government going to hand over to the political government to be elected in a few days? The person who has been in charge of the economy so far, the finance adviser of the caretaker government, said that he is leaving the economy in a very good condition. He even dispelled the fear that was created over the relatively poor performance of export, especially in the Readymade Garment (RMG) sector, during last October. Without clarifying the exact cause of the slide in the export earning in the particular month under consideration, the outgoing finance adviser, however, drew a rather encouraging picture of the overall economy.
In fact, looking at certain indicators of the economy such as the volume of export and foreign remittance, food production and its existing stock, the amount of foreign aid received, the rate of inflation, the growth in GDP and so on, there is still no reason to cry wolf. And getting unnecessarily panicked about what may or may not happen in the future is also not a sensible way to react to the ongoing developments all around.
So far so good. To all appearances, the caretaker administration is not leaving the economy in an unmanageable shape to the elected government which is going to replace it soon. And it is also too natural that a government will try to highlight the positive side of its performance during the period it has been in charge.
But is the economy all about some macro-economic indicators? The performance of the garment sector had always been very encouraging, for in every successive fiscal, its record is marked by how far it has surpassed its performance in the previous fiscal. The trends in the export of RMG products are still comfortable.
What is stranger is that the performance of this export sector was not worse even in the past years when the Chittagong port, the main window of the country's external trade, was in the grip of endless strikes and work stoppages and the overall political situation of the country was in a state of deadlock. From that perspective, one cannot say that the RMG sector achieved any miracle or extraordinary success during the last two years of relative calm in politics. There is, however, the scope of arguments to justify why there has been no such striking example to mention about the export during the last two years. If truth be told, the garment sector has been performing well in spite of the nature of the government in office. The same is the case with the volume of remittance. This fiscal, too, the trend of remittance flow is excellent and the recession in the highly industries economies is yet to affect inflow of remittance. And the government has not much credit to take from the better performance of the remittance flow either.
The extraordinary resilience of the farmers in the face of the natural disasters and their success in achieving bumper production last year and, hopefully, also this year, is a story retold many times over. On this score, the government assistance, if any, has been routine. In a word, the economy, especially in the sectors under review, is being driven by its own momentum, without having to be especially grateful to any particular government in office.
But the economy is not all about the performance of any of its particular sector or sectors. The size of the export earning or the remittance is certainly not really a great figure to be proud of. The poverty of the nation we are so fond of discussing if only in order to remove it, has its root deeply sunk into the lack of performance of the industry, agriculture and other vital sectors. And for the growth of the industry, one has again to return to the clichéd subject of investment, foreign or local. We have not still heard of anything from outgoing finance adviser on this score. What is the volume of foreign investment during the last two years? What is the state of the local industries and how did they fare during the period under review? Have they been able to expand further and create new employments? How many new industries have sprung up meanwhile adding to the overall Gross Domestic Product (GDP)? If the ongoing recession in the North America, the European Union(EU) economies, Japan and other developing economies has not left its harmful effect on our economy, why have the industry and the agriculture not made their mark on the overall growth picture?
The overall picture, on the other hand, is quite to the contrary. The agriculture, especially its driver, the peasantry, exists more or less in its feudal past. What the farmers perform every year without any substantial support from the government or other quarters is simply a miracle. Investment, whether foreign or local, is not fashionable in agriculture. To talk about growth and increased employment without any serious reference to agriculture as a prospective sector has really remained more or less a barren exercise so far. And there is also no point in thanking the farmers for a job they are being compelled to do, day in, day out, without being asked to do it. Under the present circumstances, just give them the option to otherwise and see what happens. Probably, few of them will be eager to continue in the drudgery, unless their overall condition of existence is improved.
Yet, every year, the government including politicians, the economists and our development partners are in the habit of uttering platitudes religiously in praise of the peasantry of the country. The production of 29 million tonnes of food grain (a record in a decade) with a stock of over 1.46 million tons in the government depots is certainly an achievement of sorts when they are doing the job with their millennia-old practices and implements. But did we ever care to know what change this so-called achievement so generously attributed to them has brought to their own lifestyle? The talk of poverty alleviation sounds funny, when agriculture and its driving force, the peasantry, remain beyond the purview of all the big experiments on poverty mitigation!
But we were discussing the outgoing government's self-appreciation of the economic job it has being till date. In really, they could not do worse either. They could do even better even without having to transgress the limitation of an interim administration, if only the business could run as usual in the sphere of trade and industry. Fighting corruption could be the most contributing factor to the economy, had it been done not with hurry or creating unnecessary splash in the media, but as part of a routine job done without fear or favour. So, we have no figure to claim, if the industry and commerce have performed any better than it had been doing before, especially the interim government was sworn into office.
The challenges the economy will now be facing as identified by the outgoing finance adviser consist in increasing public investment in the face of global recession, strong monitoring of the Annual Development Programme (ADP) implementation, further increase in energy and power sector investment, continuation and enhancement of the social safety-net programmes, expanding tax and Value Added Tax (VAT) net, ensuring austerity and balance between budgetary expenditure and income, etc. The specific areas of challenge in the field of investment as suggested by the finance adviser include utilisation of the money saved from the reduced price of fuel oil in the international market, reducing regional disparities, giving attention to information technology (IT), continuing the financial sector reforms and so on.
Of all the challenges, the real one before the future government will be to avoid witch hunting for retributive justice, ensuring social stability and creating the enabling environment for the business to pursue as usual. Infrastructures like electricity, ports and communications should get the highest attention. The impact of recession, if any, would be most pronounced on the jobless and vulnerable section of society and the public sector investment of the next government must have to address the issue in particular.
The nation has had promises galore from successive governments. But living up to the promises has never been the forte of any one of them in the past. The outgoing one, too, is not immune from this blemish. All our hopes will then be reposed in the government to be voted into office soon.
What kind of an economy is the caretaker government going to hand over to the political government to be elected in a few days? The person who has been in charge of the economy so far, the finance adviser of the caretaker government, said that he is leaving the economy in a very good condition. He even dispelled the fear that was created over the relatively poor performance of export, especially in the Readymade Garment (RMG) sector, during last October. Without clarifying the exact cause of the slide in the export earning in the particular month under consideration, the outgoing finance adviser, however, drew a rather encouraging picture of the overall economy.
In fact, looking at certain indicators of the economy such as the volume of export and foreign remittance, food production and its existing stock, the amount of foreign aid received, the rate of inflation, the growth in GDP and so on, there is still no reason to cry wolf. And getting unnecessarily panicked about what may or may not happen in the future is also not a sensible way to react to the ongoing developments all around.
So far so good. To all appearances, the caretaker administration is not leaving the economy in an unmanageable shape to the elected government which is going to replace it soon. And it is also too natural that a government will try to highlight the positive side of its performance during the period it has been in charge.
But is the economy all about some macro-economic indicators? The performance of the garment sector had always been very encouraging, for in every successive fiscal, its record is marked by how far it has surpassed its performance in the previous fiscal. The trends in the export of RMG products are still comfortable.
What is stranger is that the performance of this export sector was not worse even in the past years when the Chittagong port, the main window of the country's external trade, was in the grip of endless strikes and work stoppages and the overall political situation of the country was in a state of deadlock. From that perspective, one cannot say that the RMG sector achieved any miracle or extraordinary success during the last two years of relative calm in politics. There is, however, the scope of arguments to justify why there has been no such striking example to mention about the export during the last two years. If truth be told, the garment sector has been performing well in spite of the nature of the government in office. The same is the case with the volume of remittance. This fiscal, too, the trend of remittance flow is excellent and the recession in the highly industries economies is yet to affect inflow of remittance. And the government has not much credit to take from the better performance of the remittance flow either.
The extraordinary resilience of the farmers in the face of the natural disasters and their success in achieving bumper production last year and, hopefully, also this year, is a story retold many times over. On this score, the government assistance, if any, has been routine. In a word, the economy, especially in the sectors under review, is being driven by its own momentum, without having to be especially grateful to any particular government in office.
But the economy is not all about the performance of any of its particular sector or sectors. The size of the export earning or the remittance is certainly not really a great figure to be proud of. The poverty of the nation we are so fond of discussing if only in order to remove it, has its root deeply sunk into the lack of performance of the industry, agriculture and other vital sectors. And for the growth of the industry, one has again to return to the clichéd subject of investment, foreign or local. We have not still heard of anything from outgoing finance adviser on this score. What is the volume of foreign investment during the last two years? What is the state of the local industries and how did they fare during the period under review? Have they been able to expand further and create new employments? How many new industries have sprung up meanwhile adding to the overall Gross Domestic Product (GDP)? If the ongoing recession in the North America, the European Union(EU) economies, Japan and other developing economies has not left its harmful effect on our economy, why have the industry and the agriculture not made their mark on the overall growth picture?
The overall picture, on the other hand, is quite to the contrary. The agriculture, especially its driver, the peasantry, exists more or less in its feudal past. What the farmers perform every year without any substantial support from the government or other quarters is simply a miracle. Investment, whether foreign or local, is not fashionable in agriculture. To talk about growth and increased employment without any serious reference to agriculture as a prospective sector has really remained more or less a barren exercise so far. And there is also no point in thanking the farmers for a job they are being compelled to do, day in, day out, without being asked to do it. Under the present circumstances, just give them the option to otherwise and see what happens. Probably, few of them will be eager to continue in the drudgery, unless their overall condition of existence is improved.
Yet, every year, the government including politicians, the economists and our development partners are in the habit of uttering platitudes religiously in praise of the peasantry of the country. The production of 29 million tonnes of food grain (a record in a decade) with a stock of over 1.46 million tons in the government depots is certainly an achievement of sorts when they are doing the job with their millennia-old practices and implements. But did we ever care to know what change this so-called achievement so generously attributed to them has brought to their own lifestyle? The talk of poverty alleviation sounds funny, when agriculture and its driving force, the peasantry, remain beyond the purview of all the big experiments on poverty mitigation!
But we were discussing the outgoing government's self-appreciation of the economic job it has being till date. In really, they could not do worse either. They could do even better even without having to transgress the limitation of an interim administration, if only the business could run as usual in the sphere of trade and industry. Fighting corruption could be the most contributing factor to the economy, had it been done not with hurry or creating unnecessary splash in the media, but as part of a routine job done without fear or favour. So, we have no figure to claim, if the industry and commerce have performed any better than it had been doing before, especially the interim government was sworn into office.
The challenges the economy will now be facing as identified by the outgoing finance adviser consist in increasing public investment in the face of global recession, strong monitoring of the Annual Development Programme (ADP) implementation, further increase in energy and power sector investment, continuation and enhancement of the social safety-net programmes, expanding tax and Value Added Tax (VAT) net, ensuring austerity and balance between budgetary expenditure and income, etc. The specific areas of challenge in the field of investment as suggested by the finance adviser include utilisation of the money saved from the reduced price of fuel oil in the international market, reducing regional disparities, giving attention to information technology (IT), continuing the financial sector reforms and so on.
Of all the challenges, the real one before the future government will be to avoid witch hunting for retributive justice, ensuring social stability and creating the enabling environment for the business to pursue as usual. Infrastructures like electricity, ports and communications should get the highest attention. The impact of recession, if any, would be most pronounced on the jobless and vulnerable section of society and the public sector investment of the next government must have to address the issue in particular.
The nation has had promises galore from successive governments. But living up to the promises has never been the forte of any one of them in the past. The outgoing one, too, is not immune from this blemish. All our hopes will then be reposed in the government to be voted into office soon.