'Recession' and 'recovery' could betray a certain contradiction in terms, but in all fairness to the unique vibes given by the prevailing economic situation, the blend of the two words does not sound all that inappropriate. The macro-economic advantages such as the gradual upswing in exports, sustained flow in remittances, an overall growth in foreign exchange reserve and a relatively good agricultural harvest 'could not give the necessary kick-start to the economy,' observed the MCCI. No evaluation of Bangladesh economy in the recent times could do without this 'glass is half-full' allusion to the enigmatic reality of the other half of the glass being empty. The development partners in their Dhaka meet for Bangladesh preambled their criticism of slow pace of reform impacting on economic management by giving a recital of the plus points as if to soft-pedal the critical references. The MCCI has more or less done the same thing, and perhaps a little more. True to the expectation, as economic practitioners, they have proved to be rather clinical in their evaluation.

The manufacturing sector is where the recession is most acute. A number of leading pharmaceutical, electronic and agro-input industries have reported dip in the sales. In other words, these enterprises are facing demand contraction. Why? Because there has been an erosion of purchasing power, particularly in the rural areas, due to 'low prices of jute and slow procurement of aus and boro crops in the wake of bumper production'. The rate of inflation, as measured by the Consumer Price Index (CPI) stood at 4.64 per cent in April 2003 as compared with 2.14 per cent in the corresponding month of the previous year. Significantly, it has been stated that 56 per cent of the inflation experienced was due to food prices compared to 35 per cent from the same sources in 2002 and 42 per cent in 2001.

The industrial slump is reflected by the decline in import of capital goods, raw materials and intermediate goods but the consumer goods registered an increase to 12.2 per cent from 7.1 per cent.

The cost of funds, lower credit flow to the private sector, the high lending rates and the cost of doing business overall, have had a paralytic effect on the manufacturing sector.

The industries that serviced the domestic demand were in a bad way but those that catered for external demand fared relatively better, exports showing a growth of 12.4 per cent in January-May 2003 as compared with the level recorded in the corresponding period of last year.

It is the non-economic factors that have principally contributed to the economic recession and slow-down. Amidst a deteriorating law and order situation ramified by extortion, abduction and murder, hardly anyone is in a mood to invest either in productive or mercantile sectors. Deterrent punishment of the criminals has been so much in short supply what with the speedy tribunal trials attending to backlogs, that confidence has been endemically lacking per se in the enforcement and legal systems. Investment, let's not forget, is basically the function of confidence. FDIs have a way of flowing into countries that have turned into havens of domestic investment. Why? Because buoyancy in local investment is an indicator of active market demand. Tighter legal protection of investment and auditing of international standards can make us FDI-worthy in ways that we do not seem to realise.

In our pursuit of reforms we are more focussed on public-private sector juxtaposition rather than on governance and public interest.

Political uncertainty is seminal to our problems, be it poor law and order situation or administrative, social and economic misgovernance. The onus ultimately lies on the ruling party to express solidarity with parliamentary politics and give the opposition a space they can only ignore at the risk of losing popularity.