Good politics may lead to a better economy

Two vital questions confront Bangladesh in the aftermath of the January 05 national elections. Will there be another election within a short period? The other question is: what will be the impact on our economic stability and development if such an election is held or not? Reply to both the quarries depends on a large number of variables.

Even the ruling Awami League knows in the heart of its hearts that the elections to the 10th Parliament were flawed. The victorious party and their allies blame the anti-election movement by the Bangladesh Nationalist Party (BNP)-led opposition. They hold the opposition movement to boycott the elections under an interim government led by the ruling party and the accompanying violence responsible for half of the voters being deprived of their right to vote. As many as 153 candidates were elected unopposed. The elections to the 143 contested seats of parliament witnessed a very low turnout for the same reasons, says the ruling party. It also asserts that the polls were mandatory to maintain constitutional continuity. Before the elections and in the context of political turmoil of opposition's country-wide blockade, occasional hartals and continued violence, the party in power also repeatedly spoke of dialogue and settlement leading to another election to make future politics peaceful and smooth.

But after the elections were held, despite opposition's attempts to resist it, leaders of the ruling party started saying that the 10th parliament has been elected for five years. The government formed by it will, therefore, continue and dialogue with the opposition can only be on the polls for the 11th parliament, sometime after five years.

If the party in power really means what some of its leaders are saying, the nation will be presented with a different scenario. The opposition will have to re-think and redesign its political strategy. It will have to develop a more practical and non-violent movement against the government, which according to it, climbed to power through a fragile and unreliable election. It has already said that it will carry on political movement against what it calls the illegitimate government. At the same time, it has expressed its desire to engage in a dialogue with this 'illegitimate' government to thrush out the political problem.

Whatever that may be, there is no doubt about lingering political uncertainty. The polls, flawed as these were, have created a sort of lull in political turmoil. How long will it last before a storm, small or large, strikes the nation again?

The answer to the question will depend on a variety of factors. It will depend not only on the opposition's ability to mobilise popular and active support for its movement. More importantly, it will depend also on the conduct of the new government under the Prime Minister who has secured a renewal of lease in power. Will it be able to ensure good governance by purging the incompetent and corrupt partisans in both the political and administrative strata? Will it be able to have more effective diplomacy? Will its politics and administration lead to quick repair of the damaged economy and ensure its steady development? These are questions which the future alone can answer. Certainly, a lot will depend on the 'iron will' of the ruling leaders for achieving things positive.

It is well known that the World at large, along with the nation itself, has been openly critical of the way the elections were held. There is a lingering and widespread suspicion that the ruling party did not handle the issue of poll-time government with care and sincerity. There is also continuing doubt that the new government installed in power, through a faulty and virtually incomplete election, would not enjoy solid confidence either at home or abroad. As a result, the economy may yet have to wait for a while before seeing good and vibrant times.

Everybody knows that the wheels of economy are propelled by hope. Hope moves on the wings of trust. Economic health and development of a society depend entirely on trust. It is known that economic activities do not cease even during wars. In fact, it has been strongly asserted by socialists and communists that capitalism and imperialism thrive in times of war. Defence industry gets tremendous fillip. Suppliers of arms and ammunitions have a field day. Merchants of death reign and rule when war breaks out. In such a situation countless millions despair and die. There is no hope for the common man. Economic development during the time of war is, therefore, hollow. Economic progress that is meaningful relies on hope and trust.

The question, therefore, in the post-January polls period is: is there a basis of hope and trust in the government that has come to be? As already mentioned, a major portion of the voting public has only frail faith in the virtually voterless elections. Most of the friends and development partners of the country are doubtful of the credential for moral legitimacy of the parliament formed on the basis of a flawed and incomplete election. It is true that practically all governments, including the USA, UK, European Union, India, Russia and China, along with others, have accepted the government mostly on the basis of constitutional continuity and social stability. They have naturally expressed their desire to continue business with Bangladesh, both diplomatic and economic as usual. Nevertheless, almost all of these countries, excepting India, have expressed lukewarm support for the election process. Even then, powerful sections of the relatively free Indian media have carried articles and commentaries virtually denouncing the Bangladesh polls of January 2014. The Western press has been almost crudely raw and rough in its criticism of craft, cunning and force in Bangladesh politics and polls.

These all spell ill omen for the nation's economic development. As time goes, if the government freshly installed in power does not improve its political and electoral credential, the attitude of the western world may harden and hurt economic cooperation in the international sphere. Bangladesh may also find it difficult to retain or expand the special privileges it gets now in terms of GSP (Generalised System of Preferences)  and other facilities.

Nevertheless, the initial signs are not negative. For instance, newspaper reports on February 02 said that such attempts were afoot in the USA. Some 463 American companies and trade organisations had appealed in a letter to the US Congress on January 27 to immediately restart GSP programme for Bangladesh. If political quarters in the USA heed to such advice, Bangladesh may have a chance to control damage. It is important to remember that though garments form the lion share of the nation's export to the USA, it does not enjoy GSP there. However, the collateral damage of continued denial could be considerable.  

Europe's help is crucial to the improvement of the skill and scope of the garment industry. After all, it has suffered the hardest blows of the long opposition movement, including blockades and general strikes.

The opposition did not compromise in the matter of joining national elections under what it believed would be a partisan and not merely a party government. For them the decision might have been politically correct in the long run. But for the garment industry as well as other export oriented enterprises the opposition's agitation and government resistance were disastrous. The violent clashes and loss of working hours caused devastation to our economy.

There is, however, comparably good news on the European front. The European Union (EU), one of the most vehement critic of the January elections, has reassured that even under a government brought to power by faulty polls, Bangladesh will not suffer from any negative steps in matters of GSP for the garments. Besides, it has also held out hopes for further technical cooperation.

Some suspect that the damage to the economy caused by months-long opposition movement was to the extent of Tk 1,000 billion (one hundred thousand crores). Besides, investment reached a very low ebb because of political turmoil. Entrepreneurs became so shy that nearly Tk 840 billion (84 thousand crores) lay idle in banks and financial institutions.

Though all these disappointing figures do not darken the macro-economic picture, the uncertainty in the political field still remains a potent threat. We can see that our currency is becoming stronger against the US dollar. The inflation rate came down to 7.03 per cent in October 2013 compared to 8.14 in July 2012. Foreign exchange reserve increased to US $18.07 billion in December 2013 from US $12.75 in December 2012. Remittance sent by wage-earners abroad declined by over 8.0 per cent in November-December 2013 but still stood at US $14.46 billion. Even, under the difficult political circumstances, export as a whole increased by 19 per cent.

So far so good. Nevertheless, the full impact of the negative political and electorate happenings would not become clear until a fairly long time passes. What were the negative impacts of the pre-polls movements and violence may be calculated sooner rather than later. The cost of a faulty election in an avowed democracy cannot so easily be found out. Under the existing world order, a democracy that is tarnished by flawed election is likely to suffer body blows in terms of international trade and aid. We should not be afraid of the challenge, if we think unitedly and meet it in the best possible way. That probably would be to hold a fair, free and credible election as soon as possible. Good politics may lead to a better economy.

Dr. Mizanur Rahman Shelley, founder Chairman of Centre for Development Research, Bangladesh (CDRB) and Editor quarterly "Asian Affairs", was a former teacher of political science in Dhaka University and former member of the erstwhile Civil Service of Pakistan (CSP) and former non-partisan technocrat Cabinet Minister of Bangladesh. [email protected]