SNIPPETS (19-12-2018)

The hard choices

Emmanuel Macron and Imran Khan have one thing in common and plenty adrift in between. They have difficult decisions to take to fix economies that went south due to bad governance. Unfortunately but not surprisingly, both men have run into trouble.

Macron had to back down on fuel price rises, pay freezes and a raft of measures designed to both fix the economy and prepare for a fossil fuel-less society. It came at the cost of appeasing a yellow jacket and apparently leaderless social outburst. Macron had other ideas of his foes but acted in due humility most of which came from heady ambitions of being the leader-in-voice of Europe. That the general mass were enraptured by his rhetoric and bemused by his action is not a surprise. That's where today's politics fails because it doesn't tell the whole story. Indeed, apart from the Conservative Party in the Uk that promised hard times no election campaign really has painted anything but a rosy picture.

Khan is in a similar predicament. In spite of targeting five thousand of the richest to wean out payable tax, raising gas and fuel tax, devalue the rupee and separate tax policy and tax implementation he hasn't brought good news either. The media are really going for him as he negotiated a $ 6.7 billion Saudi loan and wooed $ 6.0 trillion from the International Monetary Fund (IMF) to help payback previous loans. And Khan was willing to steer clear of the Khashoggi incident in the middle of all the furor-something the Saudis aren't likely to overlook. These are figures the common man doesn't understand as they look for their next meal. The fact that it hurts the pocket isn't acceptable either. But these are just some of the hard choices one has to make. China was the last stop for seeking dollars to prop up the economy for the man who promised austerity but chooses to take a helicopter to work. Importantly, Chinese investment in Baluchistan is a vital cog in the One Belt, One Road policy and makes up 6.0 per cent of Pakistan's loan. The ire comes from the United States the bulk of IMFs fund origins and the US isn't taking kindly to its money being used to pay back Chinese debt.

Khan, Macron and the Italian government swept into power on platforms of reforms, anti-corruption drives and sensible spend. All are facing issues with even the Italians coming to odds with the EU on spending budgets to kick-start the economy only to hear they can't cross EU deficit rules.

Come January Bangladesh will have a new government that has a host of issues to deal with. The deficit is burgeoning, banks are in the red and infrastructure costs way out of control. Whatever the outcome, delays in action will exacerbate the issues. And we're no Argentina that can negotiate a $ 67 trillion IMF loan and host the G20 summit.

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II

Practicality should prevail

When it comes to foreign investment in the country the emerging elements from trade talks and discussions almost always range from political stability, policy continuity and infrastructure. That that is only half the story becomes predominant when one considers the predicament the UK is in. In the last three years and in spite of a 10 per cent growth year on year in tech investments it is clear that businesses are holding back to investment by 0.7 per cent due to the uncertainty of Brexit. Worse still is that impatient investors are only going to wait a certain while before choosing newer avenues. Essentially the European Union (EU) with the United Kingdom (UK) in it provides safe and seamless investment. But with the seams coming apart an estimated $ 15 billion has been pulled out in the last three months according to BBC.

Now that Theresa May has another year of confidence in her party's leadership and an emphatic 'no' from the EU on the backstop legality, she returns doubly bruised. How she can go to parliament for a vote in what she has is incomprehensible given her own vote count remains to be seen.

To be fair no one has given her suggestions of a way out and truly, that what is best in the interest of the British in honouring the 2016 referendum hasn't been forthcoming; criticism has. That's where the nascent environment in Bangladesh has lessons to learn. Our much touted foreign direct investment (FDI) is too open about repatriation of profits to be good for us, whilst foreign exchange reserves are a decent $ 31 billion. We still can't afford leaking out repatriation unless a percentage is provisorily held back. Unionism demanded in export processing zones is unnecessary if investors have a charter from their country of origin that can be followed. And tax holidays are good in so far as tax returns are solid enough. The one-stop services don't work simply because they don't work internally. Investment policy must be different from investment implementation. The concept of central and collective governance by utilities and such has to be ensured if speed of investment facilitation has to be ensured.

The top line carrot of investment, that of jobs, is headlined far too often. Clear-cut curricula of vocational skills that match with prospective investor requirement is now a must to reduce the numbers of expatriate workforce that are allowed in to do jobs that aren't rocket science. Vocational education has to be given a thorough dry-cleaning with adequate ILO (International Labour Organisation) certification and skills upgrade so that they apply for both local and foreign work destinations. Telecommunications is one sector that has clear-cut regulation on percentage of workforce that must be locally filled. In the UK 30 per cent of subsidiary companies (read outsourced) provide local jobs that are as crucial to major investors and that enjoy a fairly comfortable job security.

Having said that, it is a natural phenomenon that efficiency and automation will lead to lost jobs. With proper skill development these can be diverted to outsourcing whereby subsidiaries should be cajoled into accepting the SERE ( Survival, Evasion, Resistance and Escape) recruits.

The writer can be contacted at: [email protected]