Safeguarding national interest

Among the international institutions, The World Bank and IMF (virtually a redundant organisation with no specific job it was created for, after major currencies went floating against gold in 1972) want to offer us golden axe to cut our legs. There have been about 1,560 sick industries, if not dead by now. They suggest us to close our loss-making industries to ensure our dependence, instead of providing any encouragement for taking those industries and state-owned enterprises to profitability before disinvestment. Privatisation is not always a cure. Time should be ripe enough for private sector to build capability and maturity to handle large enterprises with responsibility. How USA bailed out her ailing companies like Chrysler and Lockheed, and U.K. salvaged Rolls Royce is well-known. It is an irony that the industrial revitalisation process that was started by Ziaur Rahman is being reversed to deindustrialisation by Begum Zia's administration. The ravaging high interest rate (at the insistence of World Bank since many years ago) and miserably devalued currency (mostly under IMF pressure) also have deterred local investments in productive sectors for a long time.

It seems IMF now has chosen to work together with the World Bank to raise directly or indirectly such non-economic issues as environment protection, labour working conditions, labour unionism, subsidy, energy pricing, sector-wise reform, administrative reform, inward foreign investment rules, intellectual property, free trade, container cargo scanning before shipment to some destinations and many other matters, not at all related to the mandate given to those institutions at their formation, for discussion at the time of loan negotiation, which need not be in agenda. They gather industrial, social and economic market intelligence for use by the industrialised countries, and sometimes want to chastise us if there are any practices not up to their wishes or advantages.

Now WTO is there and any of our serious right attempts are likely to be pre-empted. Our own lobbyists might make the government sign unnecessary papers or pacts prematurely without proper understanding of the underlying mechanism and implications of the present globalisation campaign that will weaken our position in taking development initiatives. The small amount of foreign exchange we are earning by export is practically lavished on luxury and non-essential import, of course, except for some essential commodities. We have been failing to set aside enough foreign exchange for investment. After liberation, there were restrictions on import of automobiles larger than 1200 cc. to keep the import cost low. Ziaur Rahman himself rode 1200cc cars. We used to assemble cars and other vehicles at Gandhara Industries (now Pragati Industries) long before liberation, when South Korea and Malaysia that now make several types of vehicles, did not think of assembling, not to speak of manufacturing automobiles. We may think of Singapore, if not Japan, to build our confidence as to what a nation can do if and only if it happens to be endowed with willing leadership. I think, we are moving backward too fast and creating big road blocks on the way to desired prosperity knowingly, or out of ignorance, or for lack of political will or coordination.

Bangladesh is a small country in size but it is not small in population which is about 114 million or so, accounting for one of the highest population density (of over 900 persons per esq.) in the world. The per capita GDP is less than US$400 even after more than 30 years of independence. The total outstanding foreign loan is US$16,276 million (as of 2001-2 fiscal year) as against annual(2001-2) export of US$5,986 million and import of US$8,540 million, accounting for merchandise trade deficit of US$2,554 million (2001-2002), which is met by Bangladeshi expatriate remittance of US$2,501 million and foreign loan of US$963 million, and foreign grant of US$479 million, showing a balance of US$365 million after adjusting payment for service and investment.

The cumulative disbursed grant since 1971 to June 2003 is US$18,458 million, while the borrowing in this period is US$20,694 million. Irresponsible fiscal and monetary management brought down the average exchange rate of US$1 = Tk7.3 in 1971-2 to Tk57.9 to a US Dollar, a 693.15% devaluation, which could not be imagined if Ziaur Rahman's administration could continue for a decade or more. We could convince him of adverse effect of unnecessary devaluation under pressure.

With a jugglery with figures, the economic position may be one-sidedly portrayed to be healthy. By no measure, this state of economy can have potential of supporting any real development. The export items like ready-made garment, frozen fish, leather, tea, and jute products, which amounts to US$5,389 million, accounting for 90 per cent of the export, has limited or no substantial scope of expansion even if Bangladesh concludes Free Trade Agreements at this stage of technological and industrial capability under present world scenario.

The potential of expansion of export always lies in selective industrial products that any country has special, natural or well-prepared advantage in. As to Bangladesh, we failed and are failing to build up our capability in any sector that can earn us sufficiently to invest in any such potential area. May we ask the government whether it will do the hard and learned homework required, or remain comfortable with lip service and superficiality?

Mismanagement of education institutions and exploitation of students for political purpose has been a cause of tremendous drainage of foreign exchange for studies abroad at even school and college level i.e. text book level. We can improve our educational quality to international standard, if not higher, in at least non-technical fields easily and can even reverse the flow.

The domestic and foreign undesirable TV programmes of violent and indecent natures are adding to violence in the society and causing social and cultural pollution. These can be checked for the sake of social health and order, without curbing rightful press freedom. Degradation in social value system is an irreparable loss to the society which money cannot compensate. Let us make our hard decisions and take responsibility for future wellbeing of the society.

Mustafizur Rahman, Ph.D. is Chairman, The Institute of Development Strategy, Dhaka.The views expressed here are of the author's own and not necessarily of the organisation he represents.